But while smaller technology vendors like these performed well in a few categories,
the larger ones generally ruled the day, with Intuit’s domination of write-up
and client-side SMB accounting systems, and CCH, Thomson Reuters and BNA’s
control over areas such as practice management and tax research coming as no
surprise. Emerging areas continued to show promise, especially document management,
tax document automation and workflow optimization.
Federal/State Income Tax Compliance
As noted in the introduction, Drake Software’s users are ardent supporters
of the program and turned up at our online polling booth in record numbers.
With an actual market share of about 10 percent, the company is one of
the last independent tax preparation system developers. Also of note in
this category, however, is that the leading three programs (Drake, the
ATX system from CCH Small Firm Services, and Intuit’s ProSeries) combine
for more than 62 percent of the total votes. This pointedly demonstrates
the prevalence of the small practice in our awards voting, which is reflective
of the profession, where approximately 90 percent of tax and accounting
practices have fewer than 10 professionals. Among other noteworthy results,
Intuit’s Lacerte, CCH’s TaxWise, CCH’s ProSystem fx Tax and UltraTax
CS from Thomson Reuters combined received 32 percent of the vote.
|Specialty Systems & Tax Prep Tools
There are many products on the market that seek to supplement tax preparation
systems, either by providing external analysis and review, or by focusing
on specific niche taxation issues often omitted by other programs or that
would require a small practice to use a much more comprehensive system than
they need. Since they provide different solutions, these programs can’t
really be compared directly, but the voting shows a continued need for specialty
|Tax Planning Systems
More than 36 percent of voters reported using a dedicated tax planning system,
and the battle for the market continues to rage on. Voting in this category
showed a tie between CCH’s ProSystem fx Planning system and Intuit’s
Lacerte Tax Planner, with BNA’s Income Tax Planner very close to these and
the Planner CS program from Thomson Reuters not far back. Of significance
here is that of the top four, all but one (BNA) are from vendors who also
produce income tax preparation programs. The exception for BNA is noteworthy
because its users either forgo the tax planner offered by their tax prep
vendor or use a tax system without a dedicated tax planner option.
|Tax & Accounting Research Systems
Once again, voting in the awards reflects the dominance of small practices
in the profession, with the largest group of professionals selecting the
more affordable ATX Total Kleinrock Office from CCH Small Firm Services
as their preferred tax research system. Among systems geared for larger
practices, the Checkpoint research platform from Thomson Reuters received
nearly half more votes than CCH’s Tax Research NetWork (TRN). Many
professionals have access to more than one research product, especially
considering the availability of a few free services like Intuit’s
TaxAlmanac.org, so readers were able to vote for more than one system.
|Estate Planning Systems
While only about a tenth of our voters reported using an estate planning
program, the specialized service has grown in popularity with practices
seeking additional revenue channels that they perform throughout the year.
In this year’s voting, estate planning systems from CCH and BNA clearly
led the field, combining for more than 60 percent.
In another case of a small vendor finding a very successful niche area underserviced
by the big guys, AMS’ 1099-Etc is clearly the most popular among our
voters. Providing an inexpensive and easy-to-use application that provides
accountants with 1099 and W-2 prep, after-the-fact reporting for small clients
is greatly simplified. CCH and CFS also performed well in this category.
| Sales & Use Tax
Managing sales and use taxes for small entities used to be easy, but as
technologies have eroded geographical barriers to sales (especially e-commerce),
small entities are facing increasingly difficult compliance issues. For
large organizations, several systems are available, providing wholly comprehensive
compliance across all 8,000+ U.S. jurisdictions. But they generally aren’t
a viable option to small concerns. This is why tech vendors serving only
a few key states or regions tend to fare well in our annual survey. Add
to this the many state-run online reporting systems, and you get a large
number of voters who chose “other.”
Professionals may occasionally still vocally criticize the vendor, but when
they vote with their pocketbooks long gone are the days when they shunned
Intuit’s QuickBooks. Our reader survey greatly mirrors the market
trend, showing the professional accountant version of the program ahead
of its primary competitor Thomson by nearly an order of magnitude when it
comes to write-up. While this may not fully reflect market share, the results
are in no small part due to the overwhelming use of the client-side versions
of QuickBooks by small businesses, since by using the pro version professionals
greatly reduce data transfer and other integration issues. It is noteworthy
that PCSAI’s Client Write-Up System continues to have a loyal following,
although its actual market share is less than these vote results.
| Trial Balance
With more than a quarter of voters selecting a preference for a trial balance
system, the results clearly show that their decision is almost invariably
tied to the professional suite they use for tax and accounting applications.
One indicator of this is that the two runaway leaders in the trial balance
category are also the two largest providers of full suites for tax and accounting
practices, CCH and Thomson Reuters.
Engagement management systems are increasingly focusing on optimizing workpaper
management and workflow functions, and it’s become a battle between
best-of-breed solutions. The leader here remains CCH, which was one of the
first to market with its acquisition and renaming of ePace a few years ago.
Thomson is runner up, while CaseWare, with its prevalence in very large
practices, comes in at third.
Many practices are starting to implement specialized tools that streamline
audit and engagement processes. The Smart e-Practice Aids product from Thomson
Reuters, which won a 2008 Innovation Award, is the overwhelming favorite
in this arena. CaseWare comes in a distant second, and competition is going
to increase with the entry of newcomers Capital Confirmation and CPA Service
Group, which combined already account for nearly 15 percent of votes.
With nearly 30 different products in this category, AMS was again a standout,
likely as a reflection of the need for after-the-fact payroll systems
for supporting very small clients. Among the live payroll solutions “duking”
it out are Intuit and PayCycle. For next year’s awards, we’ll
split these into categories for in-house, web-based and ATF, and see how
the numbers pan out that way.
This is another category generally dominated by best-of-breed programs that
were first to market and continue to hold the major share, as well as receiving
the most votes. SageWorks’ ProfitCents is clearly the leader, with
CCH’s ProfitDriver, Sage’s Active Planner and Financial Analysis
CS from Thomson Reuters each coming in with less than half of SageWorks’
With nearly 10 percent of voters selecting a business valuation system,
the small market continues to be led by a core group of technology vendors,
including Thomson Reuters, ValuSource, NACVA and MoneySoft.
Practice Management/Time & Billing Systems
A rather remarkable stat here is that more than half of our readers claim
not to use a practice management or time and billing system, leaving us
to wonder how they know if they’re optimizing their profitability.
Leading the vote tally among the time and billing programs is Sage’s
Timeslips. The practice management side is led by suite vendors CCH and
Thomson Reuters, with CCH’s system holding a two-to-one margin over
|Document Management & Document Storage
This was the largest category, with nearly 40 products included. Although
Drake’s product far outpaced others in the voting, this is because
the system is included free as a part of its suite. The rest of the field
more closely resembles likely market share and is dominated again by best-of-breed
solutions that have controlled this relatively new market since inception.
Although, with the hoards of new competition coming in, the category has
the potential for dramatic change over the coming years.
|Tax Document Automation
Last year, we introduced this new category (and new technology) as “Scan
& Fill/Organize,” and it was strongly dominated by an application from Intuit.
The vendor then proceeded to remove that product from the market (a new
system is to be available this tax season), and in its absence virtually
all of the other major tax preparation vendors have developed their own
systems. Among these tax vendors, CCH’s ProSystem fx Scan leads
the way followed by Thomson. But among non-tax preparation vendors, SurePrep
and first-year newcomer Copanion are battling, with the latter already jumping
to an 8% share of reader votes. Also noteworthy is the number of “other”
votes in the results.
Although perhaps a vaguely termed category that can include facets of practice
management, time and billing, and document management, Workflow systems
help unite many of these processes to provide optimization across firm processes.
Doc.It won out with voters, followed by Office Tools Pro, while relative
newcomer XCM (which won a 2008 Innovation Award) is gaining traction.
|Website Builders for Accounting Firms
If you bundle in something for free, it’ll often be popular, especially
when users get the chance to vote. Such is the case with Drake’s offering
in this field, although it is quite basic and limited in content. CCH’s
Small Firm Services also offers its TaxWise users free websites, while the
add-on versions from suite makers CCH (for its ProSystem fx line)
and Thomson Reuters (for the CS line) offer a bit more features. Among non-tax
preparation vendors, AccountantsWorld, CPASiteSolutions and E.Mochila had
the best vote returns.
CLIENT-SIDE ACCOUNTING SYSTEMS
Insight: Intuit continues to dominate
the client-side accounting market for small and mid-sized businesses and
nonprofits, both in terms of market share and in our awards voting. This
is largely due to the decision makers at these entities embracing the
marketing and media love of QuickBooks, which has led to the program (in
its various industry-specific versions) being the most widely used business
But remember, the votes in our Readers’ Choice Awards come from
practicing tax and accounting professionals, who have apparently embraced
QuickBooks for their clients, as well. And for this, there are a few key
reasons. First, since it has such a large market share, there is a wealth
of training resources available to help clients learn and improve their
QuickBooks usage (like The Sleeter Group’s network of advisors).
It is also fairly simple to learn basic proficiency. The first two factors
also lead to a large base of experienced workers in the market who are
adept at using the system, which makes replacing client-side bookkeeping
staff less daunting when the need arises.
But also of key consideration is that, since the bulk of their clients
already use QuickBooks and most firms consequently started using the professional
version of QuickBooks for write-up and other services, it is in the firms’
best interest to further promote use of the system by its smaller-entity
clients, especially considering the inherently total integration features
that streamline and simplify data exchange between client and firm. Also
noteworthy here is that Sage continues to maintain a healthy relationship
with professionals and, as such, is the preferred system for larger entity
clients and leads all other contenders in each of the categories won by
Intuit. Meanwhile, Microsoft has managed to gain little foothold, if any,
for its small business accounting system (at least in the minds of our
|Small Business Accounting
The paperless office movement is finally reaching downstream into small
businesses, with a recently emerged genre for systems that integrate with
QuickBooks to provide a paperless document management solution to these
entities. Several systems have appeared on the market, but newcomer SmartVault,
which debuted in 2008, has already claimed the title of most popular in
|Fixed Asset Management
While the ProSeries Fixed Asset Manager from Intuit is the leader here,
there is a pretty strong battle between Thomson Reuters and Sage. Many fixed
asset management systems are used in-house by clients, so direct integration
with a professional’s tax package appears to be of less significance
than in other areas.
|Outsourced Technology Services
While the term outsourcing may still have a less-than-savory taste, accounting
practices are joining the general business trend of increasingly turning
to third parties (mostly U.S.-based) to perform many of the administrative
functions they used to manage themselves. These include web-based fax services,
hosted solutions, server maintenance, integrated voice-data systems, VPNs,
and messaging and desktop security. The only two vendors in this category
that are currently widely used in the profession, according to our voters,
are Xcentric and eFax. (Readers were able to vote for more than one product.)
GENERAL BUSINESS TECHNOLOGIES
Laptop & Desktop Computers
most professionals, the key driving factor in computer preference seems
to be brand loyalty, with Dell and HP far outpacing others in this field.
Of note is that the two are essentially tied in the overall U.S. computer
sales market, but in our Readers’ Choice Awards, voting tax and
accounting professionals prefer Dell by more than two to one. This may
be a result of the vendor’s heightened outreach to our particular
market over the past several years.
smart phone has finally nailed the coffin shut on the PDA, and a select
few companies own the market: BlackBerry, Treo/Palm, Apple and Motorola.
It’s amazing to watch the iPhone’s progress in the general market
and the accounting profession, with the slightly more than one year-old
gadget now the best-selling mobile phone in the United States and attaining
20 percent in the accounting profession represented by our voters. The overall
U.S. market for smart phones (Internet-enabled with full e-mail capabilities)
is still led by BlackBerry, which doubled the nearest products in our voting.
Printers & Scanners
all-in-one devices are popular, many firms still maintain separate print-ers
and scanners, so we’ve allowed voters to select more than one choice
in this category. HP far outpaces the rest of the field, although Brother
does make it into double digits.
|Office Supply Store
it’s probably a good thing we didn’t list Circuit City here,
since they’ve recently filed for bankruptcy, but in the age of Wal-Mart,
the specialty office supply and technology stores are still the preferred
location for tax and accounting firms.
Favorite Form of Physical Exercise
If you’re trying to keep up with your peers, you’d better
put on your run-ning shoes. Among those who get off their you-know-what’s
to exercise, running leads the pack, although there is a surprising number
of aerobics participants and weightlifting buffs out there, as well.
The Economy & Your Vacation?
This year, we decided to gather some insight on our readers’ vacation
plans for post tax season, a time when many in the tax and accounting
profession use to reconnect with family (and regain a bit of sanity) after
an often hectic few months.
Then the financial crisis/recession (pick your term) intervened a short
while before we launched the online voting site for the Readers’
Choice Awards. We stuck with our intended questions about travel, but
also added a particularly topical one regarding the influence that the
recession might have on the vacation plans of these professionals.
The results were surprisingly upbeat. Perhaps it’s that these
professionals have a ground-up view of the business economy in the United
States, or maybe it’s just an optimistic hope that we can “think
ourselves out of the financial crisis,” but nearly 80 percent of
this year’s 4,000+ voters said they had vacation plans, and more
than 60 percent said the economy hadn’t affected those plans. Most
plan on air or car-based travel within the United States, but more than
25 percent planned to vacation abroad.
The year certainly brought some surprising change, along with continuing innovation
in the technologies available to tax and accounting professionals. Thanks to
the thousands of professionals who, by voting in the Readers’ Choice Awards,
give us all better insight into the technologies that help the profession be
more productive, efficient and profitable. Voting for next year’s Awards
will start in the late fall. If you know of products or questions that should
be included next year, please let us know.