The Best Technology for Your CPA Firm
Would you like to maximize your firm’s technology investment, rise above your competitors, and keep your clients’ information safe and secure? Figuring out the best software for your firm can be a challenge, but with some expert guidance you can make the right choices for your firm and your clients.
Here are some key considerations to help you choose wisely and get the greatest benefit from your technology investments.
What are the best software options?
Let’s start with some of the best overall software solutions for your firm. Your software choice depends in part on the size of your firm. Here are some recommended software products based on firm size:
- Small firm (Less than 15): TPS, ProSeries/Lacerte< Thomson CS Suite, Drake
- Medium Firm (15-75): Thomson CS Suite, CCH Suite, TPS/Lacerte
- Large Firm (75+): CCH Suite, modules from Thomson and others
If you need software that performs a specific function, firms of any size can utilize the following:
- Document Management Suite – Doc.It, iChannel, CCH Document, etc.
- Practice Management – TPS, Practice CS, CCH Practice
- 1040 Workpapers – SurePrep, CCH Scan, Copanion Gruntworx
- Tax – CCH ProSystem/Axcess Tax, UltraTax CS, Lacerte
- Audit – CCH Engagement, CaseWare, AICPA DAS/OnPoint PCR, AdvanceFlow
- CAS – QuickBooks, Accounting Power, Sage Intacct
How much should your firm spend on technology?
Your firm should spend about 5-7% of your top line revenue on IT. This will maximize the amount of profit to the partners. In actual money spent, 5-7% typically works out to be $4-$7K per professional each year. Of course, you can spend less money on IT, but it will likely result in less profit.
What are the basic tech expectations for today’s firms?
- MFA: Multi-Factor Authentication with software like Duo or Okta.
- Encryption on your local computer drives and for any setting in which you send confidential email.
- eSignature. Pricing strategy for eSig has changed, making it much more common.
- SSO: Single Sign-On is expected to be common in the very near future.
What are some reputable software companies that focus solely on the CPA profession?
- Doc.It
- ProStaff
- TPS
- XCM
With any of these software companies, you can serve your clients using an on-premise or cloud-based system, or a hybrid of both:
Premise
- Doc.It Suite
- TPS On-Premise
- Lacerte/ProSystem Tax
- Microsoft Office 2016/2019
Cloud
- Doc.It Cloud
- TPS Axis Cloud
- Right Networks Lacerte or ProSeries
- Microsoft Office 365 Business Premium
Over the next five years, most firms will probably operate in a hybrid premise-cloud system. You should choose what works best for your firm. What’s most important is to remember is that your team members should have remote access whenever and wherever they need it.
What should firms know about the big software publishers and their products?
Here are some product updates from the biggest software publishers that will help you determine which software is best for your firm.
Wolters Kluwer
- Axcess Suite is being used increasingly, including Axcess Tax and Workstream
- CCH Axcess Client Collaboration is a new style portal.
- CCH Axcess Data Insights provides metrics by niche in the areas of firm health, partner performance, staff metrics, AR and profitability, project status and resourcing, and marketing.
Thomson
- Thomson is making progress on its ONVIO suite.
- UltraTax, Thomson’s mainstream tax product, continues to do well.
- Thomson’s Engagement CS will come to an end in November 2020, and as a result they are trying to move the Engagement CS clients to an advanced flow audit product.
Intuit
- Intuit has been updating Lacerte and ProSeries since 2018 and they have continued to make updates throughout 2019. These programs have increased their capability a good deal.
- Intuit’s eSig is the least expensive on the market at $3 per signature.
- They are strategically focused on moving QuickBooks Online clients to QuickBooks Online Advanced by limiting licenses. Prices on QuickBooks Online and QuickBooks Desktop are also increasing.
- ProConnect™ Tax Online is usable, but it isn’t efficient to complete a large volume of returns.
Microsoft Office 365
Microsoft Office 365 offers a variety of plans. Make sure you do not license the plans for individuals (home, personal, or home & student). Use only the plans that are licensed for business or charities.
If you have 300 or less employees, you can register your firm under the Business Premium Plan. This plan includes the typical Microsoft services plus cloud options including email and innovative options like Teams and SharePoint. Larger firms should utilize Office 365 E3 or 365 E5.
Heads-up, the cost for these programs is increasing. Fees are being charged monthly per-user. Firms should budget accordingly.
A note about Excel
Be aware that there are multiple versions of Excel. If your firm uses Excel to perform a high number of complex audits, you will need the advanced version of Excel, which is available only in the ProPlus, E3 and E5 versions of Office.
What’s the next big thing in tech?
- Process refinement and automation have been expected to be the most impactful changes in the accounting tech world for several years. However, many firms still have not adopted an automated workflow. On a related note, when you do adopt an automated workflow, a straight adoption of Six Sigma is not necessarily your best option. Get advice on how to move forward with automation.
- Client Accounting Services is a popular topic, but CAS has been around and in use for many years.
- More current innovative offerings include:
- Turnkey Sales Tax/VAT
- Business and personal structures to minimize tax
- Fraud prevention and detection
- Internal controls for maximizing profit
- Emerging Technology
- Machine learning (Though machine learning is an emerging technology, it is working and can be used effectively.)
- Robotic process automation (Also being used effectively.)
- Artificial Intelligence. AI still has some challenges. It may be a year or more before AI tools can be fully implemented.
- Be aware that vendors may try to pressure you to adopt these advances earlier than you are comfortable with or is best for your firm.
- When you do adopt a new major technology and change in process, make sure you start with a testing environment to determine if these tools are right for your firm and will truly help you as vendors claim they will.
Why take the lead with technology?
One of the best things you can do regarding technology is to be an early adopter. There is significant risk in being an “innovator” and adopting technology as soon as it is available. However, staying abreast of tech trends and adopting technology as soon as it is wise to do so helps you gain new clients and increases your perceived value to the market. Don’t wait too long to adopt technologies that will help you serve your clients with up-to-date excellence.
Randy Johnston is the CEO and founder of Network Management Group, Inc., and the executive vice-president of K2 Enterprises. Randy has been a top rated speaker in the technology industry for over 40 years. He was inducted into the Accounting Hall of Fame in 2011, and he was selected as a Top 25 Thought Leader in Accounting from 2011-2018.
Earn CPE when you attend Randy’s upcoming 50-minute webinar: Advising Clients on How the CPA Firm Will Serve its Clients - Technology Needs in the Next 5 to 7 Years