TAX SOFTWARE REPORT · ü Benchmarking ü Merger or acquisition ü Software application’s ability to support the firm’s workload ü Software application’s suitability to grow

Randolph P. Johnston & Leslie Garrett, PhD

TAX SOFTWARE REPORTComparative Intelligence for Data-Driven Decision-Making

ATX (Small Firm Services)

CCH ProSystem fx Tax

Drake

Lacerte (Intuit)

Proseries Professional Tax (Intuit)

UltraTax CS (Thomson Reuters)

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Copyright 2016 Randolph P. Johnston and Leslie Garrett, PhD. All rights reserved by the authors. No part of this publication may be reproduced or transmitted in any form or by any means, electronically or mechanically, including photocopying, recording or use of any information storage or retrieval system for any purpose without the express written permission of the authors or the authors designated agents. Disclaimer: Neither the authors nor publisher, nor their sales or distribution agents, make any representations or warranties with respect to the accuracy or completeness of the contents and specifically disclaim any implied warranties or merchantability or fitness for a particular purpose. As appropriate, competent professionals should be consulted. Published by CPA Trendlines, an imprint of Bay Street Group LLC, PO Box 5139, East Hampton, NY 11937 USA. | cpatrendlines.com | store.cpatrendlines.com | baystreetgroup.com | Phone (818) 835-2374

Library Data: Accounting Firm Operations and Technology Survey – Tax Software Report Randolph P. Johnston and Leslie Garrett, PhD CPA Trendlines, Bay Street Group LLC ISBN-13: 978-0989819183 (CPA Trendlines) ISBN-10: 0989819183 BISAC: Business & Economic / Accounting / General 1. Accounting firms - Technology. 2. Accounting firms - Management. 3. Accounting firms - United States. Cover Design by Lori A. McKee Design LLC Printed in the USA


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INTRODUCTIONDearStakeholder,

Thankyouforpurchasingthe2016TaxSoftwareReport.Thisresourcelendsinsightintothetopsixtaxsoftwareproductsrespondentsfromthe1st,2ndand3rdAnnualAccountingFirmOperationsandTechnology(AFOT)Surveyidentifiedasthesoftwaretheirfirmuses.

OurconfidenceinthedatapresentedinthistaxsoftwarereportisattributedtothevaliditymeasurestakentoacquirerespondentsforourAFOTSurvey.

Thisreportwillprovidecomparativeintelligencefordata-drivendecision-making.Gaininsightandbebetter-informedwhenworkingthroughthefollowinginitiatives:

ü Benchmarkingü Mergeroracquisitionü Softwareapplication’sabilitytosupportthefirm’sworkloadü Softwareapplication’ssuitabilitytogrowasthefirmgrowsü Best-fitsoftwareoptionswhenaddingserviceareasü Partnerretreatsorplanninginitiatives

Wearepleasedtopresentyouwiththisresource.

Respectfully,

RandolphP.Johnston LeslieGarrett,Ph.D.ChairmanandCEO FounderandCEONetworkManagementGroup,Inc. [email protected] [email protected]


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RESEARCHMETHODOLOGYSincethisinceptionofAFOTSurvey,itsfoundersgoalhasremainedsteadfast;providevalid,unbiasedandactionabledatacenteredonaccountingfirmoperationsandtechnology,collectedfromrespondentsnationwidewhoworkinfirmsofallsizes.

JohnstonandDr.Garrett,theAFOTSurveyco-founders,enlistandinvitesupportintheformofassistancewithpublishingthesurveylink,frommultipleentitiesintheaccountingchannel.Surveypromotionpartnersincludemediaoutlets,statesocieties,affiliationsandassociations,thought-leaders,bloggersandchannelconsultants.ThissupportnetworkpromotestheAFOTsurveylinktotheirfollowers,givingaccountants,bookkeepersandtaxprofessionalsnationwidetheopportunitytoparticipateinthesurvey.Thisresearchmethodologyensuresvalidityofthedata.

ABOUTTHEAUTHORSRandyJohnstonisCEOofNetworkManagementGroup,Inc.(NMGI),acompanyhehelpedtocreatein1983.JohnstonisrenownedthroughoutNorthAmericaforconsultationheprovidesonoperationsandtechnology,whilealsoservinghundredsofCPAfirmsbyproactivelymanagingtheirtechnology.Johnstonprovidesinsightandguidanceforfirmsofallsizesinterestedingrowth,profitability,mergersandacquisition.In2013Johnstonco-foundedtheAccountingFirmOperationsandTechnologySurvey.

Dr.LeslieGarrettistheCEOandFounderofInsightResearchGroup(IRG).IRGisaresearchfirmfoundedontheprincipleofprovidingvalid,unbiasedandactionabledata.ResearchconductedbyIRGentailscarefullyselectedsurveymethodologytobolsterconfidenceandensurevalidresultsforthepopulationbeingmeasured.Dr.GarretthasservedasamarketingandPRexecutiveintheprofessionalaccountingchannelsince2005.In2013Dr.Garrettco-foundedtheAccountingFirmOperationsandTechnologySurvey.


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CCHPROSYSTEMFXTAX

Thissoftwareismostprevalentinfirmswith11ormoreFTE.

Firmsbillingmorethan$1millioninannualrevenuepreferthistaxsoftware.


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KEYFINDINGS

ATX(CCHSmallFirmServices)Thissoftwareismostcommonlyusedbysolopractitionersandfirmswithfewerthan4FTE.Ifafirmplanstogrownbeyond$100,000inannualrevenue,changingtaxsoftwaremaybewarranted.Projectedgrowthbeyond$200,000maywarrantgraduationtotaxsoftwaremorecommonlyusedbymediumfirms.

2016AFOTSurveyrespondentsusingATXsoftwarebelievethetwobiggestissueswithmanagingtheirpracticeasitrelatestotechnologychallengesincludesSecurityandWorkflowandefficiency.Furthermore,67percentidentifyChange,keepingupwithnewsoftwareandCosttopurchase(44%)astheirbiggesttechnologyissuesorannoyances.

CCHPROSYSTEMFXTAXThissoftwareismostprevalentinfirmswith11ormoreFTE.Firmsearningmorethan$1millioninannualrevenuepreferthistaxsoftware.Ifyouaspiretogrowannualrevenuebeyond$5million,AFOTSurveyrespondentsindicatethissoftwarewillremainviable;52percentofmediumand72percentoflargefirmsuseit.

2016AFOTSurveyrespondentsusingCCHProSystemfxTaxsoftwareidentifythebiggestissuewithmanagingtheirpracticeasitrelatestotechnologychallengesincludesWorkflowandefficiency,followedbySecurity.Forty-twopercentofthesefirmsidentifytheirbiggesttechnologyissueorannoyanceasSecurityandriskmanagement,followedbyChange,user’sadaptionandacceptanceofchange(37%)andChange,keepingupwithnewsoftware(30%).


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ADDITIONALAFOTSURVEYREPORTSThisreportisjustoneofagrowinglineofAccountingFirmOperationsandTechnologySurveyReports.

Relatedreportsinclude:

• AccountingFirmOperationsandTechnologySurvey–forMediumandLargeFirms• AccountingFirmOperationsandTechnologySurvey–forFirmsofAllSizes• AccountingFirmOperationsandTechnologySurvey:SoloandSmallFirmsEdition

Availableforpurchaseathttp://store.cpatrendlines.com.


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APPENDIX:INDIVIDUALFIRMPROFILES

2016AccountingFirmOperations&TechnologySurvey

IndividualReportsfrom163Firms


Validated Individual Responses

Accounting Firm Operations and Technology Survey: Tax Software

RespondentID

HowmanyFULLTIMEEMPLOYEES(excludingpartners)areinyourfirm?

Whatisthebiggesttechnologychallengeyoufacemanagingyourpracticeinthenext1-3years?HowisITsupporthandledinyourfirm?

Howoftentoyoucycle/replaceyourdesktopcomputers?

Howoftendoyoucycle/replaceyournotebook/laptopcomputers?

Pleaseidentifyyourfirm’sDOCUMENTMANAGEMENTsystem(DMS)

Pleaseidentifyyourfirm'sWORKFLOWsoftware

Pleaseidentifyyourfirm’sTAXsoftware

Pleaseidentifyyourfirm’sENGAGEMENTMANGAGEMENT/AUDITsoftware

Pleaseidentifyyourfirm’sWRITEUP/BOOKKEEPINGsoftware

Pleaseidentifyyourfirm’sPAYROLLsoftware

Whatarethebiggesttechnologyissuesorannoyanceswithyourfirm?Pleaseselectthree



4387388666

SoloPractitioner

Reducingcosts

Ihandleit

N/A

Asneeded/varies

FileCabinetCS

Other

UltraTaxCS

EngagementCS

QuickBooksPro

N/A,NoneorUnsure

Coststopurchase

Coststomaintain

Securityandriskmanagement




RespondentID














4347184298

1to4

Creatingandimplementinganeffectivetechnologystrategy

IhireexternalITforprojectsorwhenneeded

Every4years

Every3years

Drake

None,wearenotconsidering

Drake

N/A,NoneorUnsure

QuickBooksPro

Other

Change,keepingupwithnewsoftware

Invoicing

workinginternet




RespondentID














4399959018

5to10

Gettingyourclientsonboardworkingwiththefirminamoredigitalway

IhireexternalITforprojectsorwhenneeded

Every3years

Every3years

Drake


Drake

Custom-builtorin-housesolution

QuickBooksPro

QuickBooks

Change,user'sadaptionandacceptanceofchange

Coststopurchase

Softwarelicensing




RespondentID














4290465693

11to20

Gettingyourclientsonboardworkingwiththefirminamoredigitalway

Iuseoutsourcedmanagedservices

Every4years

Every4years

FileCabinetCS

ThomsonReutersPracticeCS

UltraTaxCS

EngagementCS

CreativeSolutionsAccounting

N/A,NoneorUnsure

Coststopurchase

Coststohostclientdata

StaffingissueswithIT




RespondentID














4311322579

21to50

Creatingandimplementinganeffectivetechnologystrategy

Iemployoneormorefull-timeITpeopleorhaveanITdepartment

Every3years

Asneeded/varies

DoItYourself-ourownsystem


UltraTaxCS

N/A,NoneorUnsure

CreativeSolutionsAccounting

ADP

Softwarelicensing

Mobiledevicemaintenance(e.g.smartphones,iPad,etc.)

StaffingissueswithIT




RespondentID














4355057144

51to100

Creatingapaperlessfirm


Every3years

Every3years

CCHDocument

XCM

CCHProSystemfxTax

CCHProSystemfxEngagement

QuickBooksPro

Other



Viruses




RespondentID














4321819086

51to100

Workflowandefficiency


Every4years

Every4years

FileCabinetCS

None,weareconsidering

UltraTaxCS

CaseWare

AccountingCS

AccountingCSPayroll


Securityandriskmanagement

Workloadandworkflow




RespondentID














4270873365

101ormore

Workflowandefficiency

Ihandleit

Every3years

Every3years

CCHEngagement

XCM

CCHProSystemfxTax

CCHProSystemfxEngagement

QuickBooksPro

Sage(anyversion)


Training

Workloadandworkflow


Documents

TAX SOFTWARE REPORT · ü Benchmarking ü Merger or acquisition ü Software application’s ability to support the firm’s workload ü Software application’s suitability to grow