By: PJ Wallin, CFP®, CPA
Best-in-Class Tax Season Software
All,
I've been doing extensive research on best-in-class tax season software set-up. My goal as a firm is to be in full marketing mode during tax season. I've found many firms are inwardly focused rather than outwardly focused during such an important time.
Last season alone we added a tremendous amount of new business during tax season and the last thing I want to do is turn away work, or work 60 hours per week – so here's what we we’re using (pros/cons), our updated set up for this season, and the reason for the change.
2014/2015/2016 Tax Years Set Up - GruntWorx with UltraTax Desktop with BNA Income Tax Planner bridge
I've used GruntWorx for about seven years (three years at my firm, and at my prior firm, too). I think their scan-to-populate tool is the most economical and effective out there. They integrate with about four of the larger tax software providers and are now owned by Drake, so the assumption is their integration is strong.
The premise is that you scan all your original tax documents using an approved scanner (we have the ScanSnap ix500 which is only about $400 or so). If you are scanning 300 dpi black and white, the tool pulls all recognizable tax forms (W-2, 1099, 1098, etc.) and automatically pulls them into the tax return inputs. This provides you with an organized PDF for each two-screen review.
Pros:
- Huge time saver
- A PDF is nicely laid out
- Cloud-based, so you upload a PDF and an email notifies you when it's ready
- Humans are involved in the process to double-check the scan for any big errors
Cons:
There were a few hiccups in the integration with UltraTax last year, which was more an UltraTax issue than a GruntWorx issue. The two didn't play nicely in the sandbox together (rightfully so, as UltraTax really wants you to use their scan-to-populate tool, but it's not best in class yet).
The only reason we are leaving GruntWorx is my firm has too much for the use of its product and we now need a cloud-based tax software for three people to use simultaneously. I refuse to have an internal server at any point, as it’s more economical and secure to have it based in the Cloud. GruntWorx has a few extra-inconvenient upload and download steps that I want to avoid when using UltraTax's Virtual Office or SaaS versions.
2017 Upcoming Season Setup - SurePrep Tax Caddy with 1040 ScanVerify and SPbinder, plus CCH Axcess Tax (Preparation) with a BNA Income Tax Planner Bridge
Reason for the change: We need a cloud-based setup without any kinks.
SurePrep offers a best-in-class suite of front-end products that works well with CCH's cloud-based tax software called Axcess™ Tax (from what we've heard from other CPAs using the product). SurePrep offers several front-end services. We are going with a package that includes 75 returns for the use of TaxCaddy, 1040SCANverify, and SPbinder.
TaxCaddy:
This is not why we chose SurePrep, but looks like an interesting add-on that we'll be trying with our younger, technology-forward clients. SurePrep is an app for your phone or computer that allows clients to easily upload PDFs and pictures of tax documents (all doctors and millennials seem to be sending pictures these days). It has a checklist of pro-form tax documents from the prior year. It has a mobile customizable questionnaire (so we can digitize the tax organizer each year). It also allows people to link their held-away brokerage accounts, and bank accounts (so we'll automatically receive tax statement downloads when available). It also facilitates e-signature and some other features on the back end (like a repository for their final tax returns if they need them throughout the year for mortgage refinancing).
This seems like the tool of the future, but not sure about adoption (it was a free add-on in our package).
1040SCANverify:
This appears to act very similar to GruntWorx. You upload your docs to the Cloud and they are organized and populate the return (and a human verifies the input to the correct spot on the tax return). They appear to have a better OCR than GruntWorx. I'm not sure it's a huge game changer, but we'll see.
SPBinder:
This is a workpaper tool that appears to be a very clean and organized way to pull together all the 1040 workpapers each year. The PDF from ScanVerify populates into SPbinder with a lot of PDF tools embedded so you can add notes to the PDF, link numbers to different workpapers for easy reviewer reference, adding a 10-key tape within the PDF (no paper involved). As stated before, this was not the reason we went with SurePrep, but sounds like a nice way to systematize tax season. At the end of the return, you print the SPbinder to PDF and it creates an active PDF for your records (and allows you to save in SPbinder permanent work papers or notes for the following tax season, etc.).
These three tools from SurePrep are the front end of the return, and it is automatically populated within the CCH Axcess™ cloud-based tax preparation software.
CCH Axcess™ Tax:
Based on discussions with K2 Enterprises (a CPA technology consulting firm), CCH® has the most forward-thinking Cloud setup for the future. They, along with SurePrep, have won the K2 technology awards in their respective areas in the past couple of years. This tax software is fully cloud-based (not running on Citrix either). It integrates smoothly with SurePrep without any extra upload/download steps we would have encountered had we stayed with GruntWorx.
I interviewed a CPA who came from ProSystems Fx® Tax (he's a breakaway CPA firm) and he really enjoys CCH® Axcess™ Tax. He's a best-in-breed kind of guy, like myself, and he invests heavily in the best-in-class to make life easier when we're at our busiest.
Pros:
- All listed above
- Cloud-based
- Best-in-class
- Extra features
- Huge time savings (hopefully)
- More efficient use of our time as financial planners, and not wasting time with as much data entry (less resources to hire as you grow)
Cons:
Not yet tested, so this will be our first season, but I've heard CCH Axcess™ Tax has a good conversion team and the CPAs I've talked with have said the transition won't be hard since I've used GoSystem Tax RS, UltraTax CS, Insuit Lacerte, CCH® ProSystem Fx® in the past ten years at my various places of employment.
Cost - The only hesitancy I had was the investment this year. The total cost for year one and approximately 80 returns is around $13,000 (not including BNA Income Tax Planner, but includes a bridge from tax software to BNA). At first glance this seems like a lot, but as a forward-thinking tax planning financial planner, it is imperative that we have best-in-class software that provides the best client experience and most efficiencies for us as a firm.
The goal is to save time so that two new retainer clients can come on board and easily replace the cost of the software. There are some first-year implementation fees for both, so it's likely closer to $10K in year two (if I had the same amount of returns). We were paying around $4K to $5K anyhow. So, this is ultimately a small investment in the long run.
PJ