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Easier Tax Preparation with Automation

Column: From the Trenches

From the July 2009 Issue

Most firms reported a very smooth and profitable tax season this year. I hope
your firm had this type of experience. We believe that current tax preparation
software is sophisticated, does most of the job correctly, and accommodates
many oddities of state and local tax. Not everything is perfect, but the products
are very stable and comprehensive from the high end down to the low end.

Other automation tools, like the 1040 Workpaper organization products that
can scan, organize and enter the data have improved notably during this year.
Again, not all is perfect, but it is clear that the products have made notable
progress over the last few years. Finally, I believe it is important that you
keep your tax practitioners working, no matter what, from a technology perspective.
As you have done your debriefing or post mortem sessions on how the tax season
went, I’m sure you will look for improvements in the off-season. This
month, we will highlight how tax technology has improved and where to look for
more productivity gains.

CCH, a Wolters Kluwer business (
— CCH has a leading tax preparation product, 1040 workpaper automation,
tax research, as well as engagement and document management. CCH works hard
to achieve a “best of class” rating in each category of product.
ProSystem fx Tax handles most complex tax situations, has innovated
with schedule import via Excel and tried to accelerate entry through the worksheet
view. CCH has a hosted version of ProSystem fx Tax called Global fx.
We know of situations this tax year where a firm was running ProSystem fx
Tax in-house, had a disaster, and then converted to hosted Global fx.

The big new news from CCH this year is their tax research, IntelliConnect.
It is much easier to use, should take minimal retraining, and should be deployed
sooner rather than later. This product should minimize training for someone
new. The top five features include the ability to search your entire CCH subscription,
filters to narrow results, navigation with multiple tabs, support for a tri-screen
view, and the fact that it is very easy to use and learn.

ProSystem fx Scan received an overhaul this tax season to do more recognition
and to begin data entry into ProSystem fx Tax. “AutoFlow Technology”
extracts data from common 1040 source documents. The product facilitates verification
of this extracted information and allows for real-time import of verified 1040
information directly into ProSystem fx Tax.

On the front end, you can use CCH’s ProSystem fx Engagement
to import QuickBooks and other accounting information, process business trial
balances, and export the tax information into ProSystem fx Tax. On
the back end, you can keep the organized 1040 Workpaper, final tax return and
other supporting files in ProSystem fx Document. You can publish this
information to your clients with the CCH Document Portal.

Thomson Reuters (
— Thomson Reuters provided upgrades across all of its tax and portal products,
as well, including the ability to handle 1040 workpapers at either the high
end with GoSystem Tax RS or in the smaller practice with UltraTax CS. UltraTax
CS remains one of the easier to use products, with more and more features added
to the product that allow you to handle ever increasing complexity in tax returns.
GoSystem Tax RS is a completely hosted tax application that can handle sophisticated
tax returns, all delivered through a web browser. A key feature of this product
is allowing multiple people to work on the same return at the same time. Thomson
Reuters has made 1040 workpaper sorting available for both UltraTax CS and GoSystem
Tax RS with UltraTax CS Source Data Entry and ScanFlow and TaxSort respectively.

Thomson Reuters has been a source of tax information with its RIA division
for many years. The vendor’s publication divisions provide integrated
advisement for tax, audit and other client-facing services.

On the front end, the Engagement CS product has a very seamless interface
to read QuickBooks files and to build trial balances for business returns. Engagement
CS has superb import capability for UltraTax CS. On the back end, Thomson Reuters
has both FileCabinet CS and GoFileRoom to serve as the repository for all of
the processed documents. Both products offer very seamlessly connected portals
so you can choose to give clients access to their information. The NetClient
CS portal received a number of upgrades this year, which is certainly worthy
of your review.

SurePrep, LLC (
— SurePrep has provided 1040 workpaper automation for a number of years
through multiple products. 1040Scan is its fully automated product, but the
vendor also has offerings from outsourcing to light workpaper organization.
Outsource lite, Outsource, SurePrep Express, SurePrep Express lite as well as
other products round out the vendor’s product offerings.

This product has the most complete automated 1040 workpaper scan, collate,
organize and entry capability today. It interfaces with GoSystem Tax RS, CCH
ProSystem fx Tax and Lacerte. The recognition of brokerage statements and other
supporting documents is another key attribute of this product.

Copanion GruntWorx (
— Any size firm can afford 1040 workpaper automation with the pricing
model from Copanion. At $5 per return, and the ability to try 5 returns
for free, this Software as a Service (SaaS) product provides scanning and organization
to workpapers. The Pro version of the product interfaces the data into GoSystem
Tax RS. If you are considering 1040 workpaper automation, this product is a
low-cost option.

A key caution if you choose to use 1040 workpaper automation: You need to review
your procedures and make sure that you use trained clerical people to make the
initial pass at the tax documents. You do not want to unnecessarily use a tax
preparer’s or practitioner’s time. Optical Character Recognition
(OCR) is not perfect, and not every form will get classified accurately. Names
are not always reported or entered the same, for example with abbreviations,
and a person still needs to make some of the decisions for organization.

XCM Workflow (
— One of the great last frontiers for productivity is workflow
automation. There are three products for tax and accounting firms, and XCM can
be used with products from any of the major publishers. The product can control
workflow for tax, audit and bookkeeping. Requests for client documentation,
review points and many other time-consuming issues are handled with this product.

There are a few other products that are important to tax automation that I
mentioned last month: Such products include ShareFile (
for secure transfer of files and a portal capability. It is so critical to keep
your data backed up! Abacus Backups (
is a good hosted backup, and NetRescue (
is an in-house appliance-based backup that can copy any or all data in an organization
every 15 minutes and then back that data up off-site. If a major failure occurs
on a server, that server can be restarted on the appliance. And for those large-scale
failures, remember that Agility Recovery Solutions (
covers the four key recovery elements within 48 hours of any interruption: power,
technology (computers and phones), space and connectivity.

We still recommend two to three monitors for tax practitioners on desktop
PCs. There are many technologies to help your tax practice and to make those
constrained people resources more productive. Make sure you pick one this year
and implement it well!


See inside July 2009 issue

The Team Player

A Productivity in Practice Feature


New Ideas for Successful Buying

Column: Real Clients, Real Stories