CPA Firm Technology Blog

H&R Block and the Credit Crunch

Interesting post on Footnoted.org, (one of the better financial blogs out there) about H&R Block's contingent liabilities related to the sale of its Option One sub-prime mortgage unit. 

http://www.footnoted.org/buried-treasure/still-singing-the-subprime-blues-at-hr-block/

Interesting times....

The Future’s So Bright, We Have to Wear Shades

There’s a very interesting article by Andy Kessler on the editorial page in the Wall Street Journal this morning which discusses the coming war in technology; the link is here.  While Microsoft and Google are the armies currently fighting the skirmishes around the future of technology, this is really simply a proxy war about how we will use technology in the future.  Just as there are different methods of transporting goods around the country (think: rail vs. truck vs. airplane), there are also different models of computing
(browser vs. local vs. mobile).  Processing power (thanks to Moore’s Law), bandwidth, and wireless technology have changed the level of real time information sharing.  HP has even come out with a laptop (HP Compaq 6720t) which is designed to be used as a thin client into corporate systems and which doesn’t even have a hard drive!.

Many accountants are rightly concerned with the security and information control implications of using online services for their
mission-critical applications.  While these are legitimate concerns, the reality of our digital infrastructure has generally made these concerns less of a problem now than in the past.  High speed internet is getting faster.  Last week, I received a flyer from my local telephone company offering a fiber internet connection which would have 25Mbps down/10Mbps up connectivity to my home. 

While I’m still mulling over whether or not I really need that fast a connection at home since my current connection is 10Mbps down/1Mbps up through my cable provider, it’s really interesting that this level of service is now available in Knoxville, Tennessee, which, although a nice-sized city, is admittedly not one of the first cities you think of when you imagine fast internet speeds.  My current internet connections (cable and Sprint wireless) continue to impress me with the speeds which are possible; my cable connection averages 8 Mbps down, 970K up whenever I test the speed, and my wireless connection (backup) has been running over 1.1 Mbps down/300K up on the road lately with EVDO Rev A. 

Anecdotal evidence suggests that telecommunications and other utilities are also more reliable than we have had in the past.  Where I used to reboot my router and modem every morning, I now go for months without rebooting these devices, and they seem to just work now.  My collaboration with others within K2 suggests that their experiences are similar:  I have noted only two critical outages among the team during the first four months of the year.  When I started my career 15 years ago, we would have two or three power outages during the busy season which would shut us down and cause us to lose work.  While utilities aren’t sexy, they certainly seem to have made significant improvements in the last generation.

If you haven’t tried some of the latest evolutions in Web-based applications, here are some for your consideration:

• Gliffy – Flowcharts on the Web
• QuickBooks Online
• Microsoft Office Live Small Business and OfficeLive Workspace
• Bill.com – Electronic workflow and AP/AR processing
• Copanion GruntWorx – An online application for scanning and organizing tax returns
• XCM – Workflow automation for CPA Firms
• Google Apps – An office suite which allows Web-based collaboration and processing of spreadsheets and word processing documents.  These documents can be taken offline with an app called Google Gears.
• Thomson and CCH offer hosted versions of their CPA firm applications.  Thomson’s offering is called Virtual Office CS, and CCH’s offering is called Global fx.  (Both have simplified life for many firms who want to quit applying updates and administering servers in their offices.)
• Capital Confirmation makes audit confirmations paperless and electronic (and really fast as well).
• Jungledisk – An application installed on your PC which creates an encrypted storage drive using Amazon’s Simple Storage Service (S3) .

While the future direction of computing hasn’t been finalized, there are really interesting things happening in technology, and some things (like those pages or CD’s for reference materials) are on the way out. The future appears to offer more choices for how tools are delivered to users, which will make it much easier to work from anywhere – even a condo in the middle of the Pacific Ocean.

Brian Tankersley is a CPA and CITP based in Knoxville, Tennessee.  You can learn more about him at www.bftcpa.com.

Tags: WebApplications cloud versus local accounting CPA space

Question on Information Return Software

As many of you know, I also work with a site on CPA Firm Technology (www.cpafirmtech.com) through my teaching with K2 Enterprises.  Today's mail included the following message (name and location changed to protect the innocent).

Dear Brian:

I can't find information return preparation software listed in your website software listing.  We are a  CPA firm preparing information returns for our clients.

Can you direct me to a spot on your website?

W-2less in Washington

______________

Dear W-2less in Washington:

Most of the major write-up packages offer this functionality from within their product (e.g. Thomson Tax & Accounting’s Write Up CS, ProSystem fx Client Write Up, Intuit’s EZAcct), and all of the entry level solutions (QuickBooks, Office Accounting,Peachtree)offer 1099-MISC preparation and W-2 prep.  If you’re looking for after-the-fact payroll (and all that it entails, including 941 prep), look at the following products:

·         Quickbooks Enhanced Payroll Plus for Accountants

·         Intuit’s EZAcct

·         Thomson’s Write Up CS and Payroll CS

·         CCH’s ProSystem fx Write Up

·         Accountant’s World.com / Accountant’s Relief

The best solution for forms I’ve run across is the Information Return System which comes with Intuit’s EZAcct product line, but I’m not sure if it’s still offered as a separate solution.  Click on (http://accountant.intuit.com/member_programs/easyacct/index.aspx?page=features)  for information about EZAcct. 

If all you’re looking to do with this application is print some forms, the above applications may be more than you really need. 

1.       Paycycle does a good job of preparing small business payroll , and has a separate service to prepare 1099’s  if you’re just doing a few here and a few there (max per company is 50), but they only offer the service during the January-February time frame.  You can learn more about them from www.paycycle.com.  PayCycle also is offering a year of free payroll for your firm (up to 25 employees) and 90 days of free payroll for your clients.  (For more information, please visit www.paycycleseminar2007.com. )                                                                                       

2.       There are some online services which will prepare these returns in a web browser window.  One I’ve used (and been very pleased with) is www.FileTaxes.com.  FileTaxes will even mail the printed forms to the recipients for you from their site as part of the charge for their service.  Other K2 team members have also used this application for either their own businesses or for the small business client who needs a few 1099’s prepared.  FileTaxes charges on a per-form basis, and is very reasonably priced.

3.       I’ve been using the software that I purchase with the 1099’s from Staples every year, but seem to have deleted it from my PC.  The application I’ve been using is published by Adams Business Forms, and is included when you buy a pack of 1099’s or W-2’s from your office supply store.  I do this very infrequently, so all I have is the printed reports and a data file from this year’s software, but next year, I’ll be able to import the data into their new software, enter the amounts for 2007, and print the reports easily. 

4.       The IRS has a list of software providers in this space on their site at http://www.irs.gov/efile/lists/0,,id=100422,00.html

If I can be of further service, please drop me a line.  I hope to see you at a future K2 seminar.

Best regards, Brian

Backup Horror Stories for CPAs....

So there I was- listening to this week's Security Now podcast on the plane- and about 12 minutes in, Steve (the host) starts talking about his hard drive testing and data recovery tool. (This tool is typically used after a drive has started giving trouble). Here's the thumbnail-

CPA has old server.  In the middle of tax season, their server stops working due to drive failure.  Tech runs Spin Rite on the disks, recovers most of the data (which is of course not backed up), and then installs a new server after tax season.

I'll probably play this in the CPA Firm Tech session in Des Moines - it's a pretty scary scenario.  The other thing CPAs seem to harbor is an acute sense of denial about the need for backups.

Links are as follows:
http://tinyurl.com/29q9hj
-or-
http://www.grc.com/sn/SN-095.htm

When your browser completes loading the page, just search for CPA, and you can read the transcript directly.
Enjoy- BFT

March 15th....

Here's a quote for those in the throes of the March 15th corporate deadline

• If you are going through Hell, keep going. - Sir Winston Churchill

IRS Announces 2007 Mileage Rates

(from IRS Website)

Beginning Jan. 1, 2007, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

• 48.5 cents per mile for business miles driven;
• 20 cents per mile driven for medical or moving purposes; and
• 14 cents per mile driven in service to a charitable organization.

The new rate for business miles compares to a rate of 44.5 cents per mile for 2006.  The new rate for medical and moving purposes compares to 18 cents in 2006. The primary reasons for the higher rates were higher prices for vehicles and fuel during the year ending in October.

Another Tax Season in the Rear View Mirror

Well, we made it.  Today is Tuesday, April 18, 2006, and it's the first day after tax season.  I hope you all enjoyed a nice beer (or iced tea, or glass of wine, or whatever beverage you enjoy), and reflected on the end of the season.   I celebrated by treating the family (and extended family) to takeout Japanese, and by spending the evening reading books to my four year old.  (I'm trying to enjoy time with my son while he still thinks I'm cool).

A few things I learned this year which I'm going to try to implement over the next year:

Workflow management and document management are the keys to following up on where you are on projects, and focusing on getting things done.  I visited some accounting solution vendors recently, and one of the things which stuck out in my mind during the visit was the need to manage both your pipeline of tasks to complete and the documents needed to complete them.  I'm probably not the only one who has tried (in vain) to use shared tasks to manage my workflow in Outlook, and have come up short.  I'm not sure if it's my frustration with the to do list in Outlook or my own stubbornness, but it hasn't worked for me. As a Lacerte tax software user, I have been impressed with the UI behold both the Proseries line and Lacerte lines of tax software (note: similar functionality exists in most major tax software), which allows projects to be aged, status codes to be assigned (info pending, on extension, review pending, final, etc.).  This works fine if you look at  your tax software all day, but I wanted something which I could use for ALL of my projects - my tech implementations, the consulting projects for clients, and all of the other things I do besides tax returns.  And I wanted more than just one screen of data on the stuff in my pipeline - I wanted notifications on status changes on things I've staffed, and want to know when something's ready for review.  In short, I want the reporting and management structure of a top 100 firm without the IT department.

XCM Solutions offers an interesting app for this issue.  XCM is affiliated with outsourced return prep vendor Xpitax, and is the method used by Xpitax to manage the workflow of items being processed offshore (think: the subcontinent).  This tracking app seems to have lots of potential, so I'm testing it to see how well it works with my work style and my needs.  More here to report later.  (for an intro to what the heck I'm talking about, see XCM's flash demo here)

Good tax software makes your life easier.  I ended up doing some states which I had never done before, and the combination of the Allstates Quickfinder and my REP (remote entry processing, or pay per return) version of Lacerte tax software went pretty well.  I really love the little things in the tax software - the client tracker home page, the diagnostics which keep you from doing something really stupid in the caffeine-laced, sleep-deprived state that most CPA's are in during the winter.  It's also nice when you can set up your documents to print in a certain manner, and make those customizations for how you want your returns to look, it prints EXACTLY the way you like things to look.  I worked on a pro-bono (some would say por bonehead) project this year for an international student.  I delved into the world of tax treaties, weird states, and the 1040-NR for free.  After I was 3 hours into researching the exact rules relating to this country (let's call it Narnia), I finally broke down and spend the $28 to do the return in Lacerte.  The nice thing about it was that the interview questions lined up perfectly with the Narnian treaty, and even though I'm not the world's expert in preparing Form 1040NR, it made the whole process easy, and ended up saving me a lot of time.  At the end of the preparation process (which after I understood the law took about an hour, mostly due to telephone calls), I printed two copies of the return, packaged it in the presentation folders I use, and delivered it to the client.  The client was impressed with the presentation, and I think he will be back when it's time for him to be a paying customer.  Either way, the consistency of the styles and print ordering made it so organized that I could package this return in less than 5 minutes, including paper-clipping the postage-paid envelopes to the extensions, stamping the copies of the return "Copy", and printing the insert sheets for the presentation folder.  Nice stuff.

What did you learn this tax season, and how did it help you make more money in less time?

Climbing the Value Chain

Ahhhh.... It's that most wonderful time of the year - March - when a young accountant's mind turns to... MUSH.

Yes, busy season is here, and like all of us, I'm frantically trying to get stuff done for clients.  The good news is that I have a spare PC with a TV card in it, so I can at least run Formula One in the background while I work 24x7.  With my trips to Seattle and Detroit next week, I'm not sure my wife and son will even know that I'm out of town (even though I usually work out of my home office).

As a sole practitioner, my clients ask me to deal with many different issues for them - Quickbooks, Peachtree, taxes, compliance, IT support, dealing with vendors, etc.  As such, there are some things that, although I am professionally capable of dealing with them, it's a lot easier to find someone to take care of the details, as the value of the service to the client is not what I would like to make on an hourly basis.  That having been said, I want to take care of my client - but I don't want to be in the business of stuffing envelopes, nor do my clients want to pay my rate for that service.  Accordingly, I'm trying to identify specialists who deal with these details for a reasonable fee. 

One service which has been recommended to me is FileTaxes.com.  This is a service which will prepare 1099's, W-2's, 941's, and the like for you, and keep you from going nuts trying to find that one copy of a "red" W-3 or 1096 on February 28th.  PayCycle (mentioned below) also offers a service for up to 50 1099's which gives you e-filing capabilities, and prints the recipient copies on your PC for $10 wholesale(e.g. CPA Firms) or $40 retail (e.g. end users).

Another service which I've seen a demo of is Paycycle's payroll service - an outsourced payroll solution which lets accountants rebrand their web-based payroll solution, mark it up, and sell it to their clients.  (It appears to be similar to some of the services provided by AccountantsWorld, which is another company helping small firms rebrand automated services).  It costs $14.99/client/month, and their webinar was pretty impressive.  I've got a couple of small companies who are using ADP and some other services who I'm thinking of switching over to see how well it works.  The website speaks of imports into Quickbooks, Peachtree, and other formats, alt.  Bad news here - there's a limit of 50 active employees, so my client with 75 actives who needs a solution is out.

How are you helping yourself and your clients provide more value in less time?  If you're not thinking about how to constantly do more with less, you're sitting still - and in today's dog-eat-dog world, that's a great way to end up as the prey instead of the predator we all aspire to be.

P.S. If you have a few minutes and haven't laughed enough lately, there's some hilarious new music on iTunes from a fake band called "Van Heffer".  The whole tragic saga of Van Heffer has been played out in Wichita Rutherford's podcast, "Five Minutes with Wichita" - but here's a thumbnail sketch:  Sissy Elvis impersonator sings Black Sabbath and Ozzy Osbourne songs backed by a  Bluegrass band.  Now this is no cheap imitation - Randy Rhoades guitar solos are repeated note-for-note on a mandolin.  My favorite track:  The Bluegrass version of Iron Man.  Check it out - the whole album is $9.90, and as Wichita would say, "It's just precious."

All My Package X's Live in Texas....

The handy, dandy, Package X, the SearsCatalog of tax publications has finally gone to be with Elvis this year.  After 2004, the IRS will no longer print copies of Package X.  The simple reason here is the changes in technology which have rendered it a 21st century buggy whip.  Your options follow:

1. Download each individual form you need from the IRS website or the related state websites
2. Subscribe to a forms service through someone like BNA or Superforms.
3. Get the forms through your tax software, and figure something out for those forms which you can't figure out how to use, or for those items when you need just one form, and for which you don't want to pay the "per return" charge for that client.

Another option is a hybrid of this, and IMHO, is the optimal solution for many sole practitioners like me:
1. Federal: Use Publication 1796, a little known CD available from the IRS for about $25.  As the IRS describes it,

Publication 1796, IRS Tax Products (a CD-ROM equivalent to PKG X), is sold by both the Superintendent of Documents under the Government Printing Office (GPO) and the National Technical Information System (NTIS) under the US Department of Commerce.

2. States: Use the State Tax Links site provided by the Federation of Tax Administrators. 

Blogs, Wikis, and Portals. Oh My!

Many tech consultants have observed that CPA's are "technology challenged" as a group.  This statement is generally followed by an apology to "*-challenged" people for lumping them in with a group such as us.  (As an aside, I tend to believe that the technology aptitude of CPAs follows a bell-curve just like the tech ability of any profession - there are leaders and there are followers in every group, and I choose to think of myself as a leader rather than a member of an impaired group).

With this in mind, two electronic publishing technologies have recently swept the web.  The first, blogs/newsfeeds, has been written about extensively in the press.  Most of you who don't know me personally from either my practice or seminars are probably here because of Eva Lang's article on blogs from the June 2005 Journal of Accountancy.  The second, wikis, has not been discussed as much, but represents a way for charitably minded professionals (or maybe just those of us with egos out of control) to share their knowledge with others. 

A Wiki is like a user-maintained encyclopedia, with the readers contributing articles as they look for information on a topic.  The granddaddy of all wiki websites is wikipedia.org.  This site is typical of most wiki sites I've interacted with.  It has a great deal of useful information, but it also has a great deal of garbage in its ranks.  One example - we're all very sick of the Gwen Stefani song, "Hollaback Girl" (actually I heard entirely too much of it, to the point that it was ingrained in my brain).  I looked "Hollaback Girl" and "bananas" up at Wikipedia (HG)(B) and at at urbandictionary.com (HG)(B).  Note the difference in the two sets of definitions - Wikipedia has well edited and thought-out definitions, with discuss the commonly used definitions of the words, while UrbanDictionary has about six definitions for each word, some of which don't even make sense.  Moral: Some wiki good, others bad.  Choose carefully, and check before you link.

(At this point, many of the parents of teenagers are telling their kids that they are grounded for various issues related to "Hollaback Girl" and racy music videos, and the rest of you are wondering what in thunder Gwen Stefani has to do with accounting and technology.... Well, here it is-

The POINT

We all remember the promise of CPA2Biz, and how it necessarily had to fall short of the huge expectations of all websites after the "dot com" crash of 2001.  This week I received links to two interesting sites (Intuit's TaxAlmanac and First Horizon's CPA First Resource) seeking to join AccountantsWorld, CPA2Biz, AccountingWeb, AICPA, and your State CPA Society as your daily portal of choice..  Both Tax Almanac and CPAFirst Resource appear to be vendor-controlled resource listings, and strike me as hybrids between a blog and a wiki.  Intuit's venture, TaxAlmanac, appears to be more of a Wiki than a blog (the main page includes:

TaxAlmanac is a free tax research resource brought to you by Intuit (http://www.intuit.com). It is a revolutionary leap forward in how accountants research tax laws, create and share knowledge....

TaxAlmanac is written by tax professionals from across the country and takes advantage of the knowledge of academia as well as practioners - in short, the real tax experts. The site includes key information that tax professionals find useful when conducting research - including the Internal Revenue Code, Treasury Regulations, Tax Court Cases, and a variety of Articles.

First Horizon's CPAFirstResource takes the form of an aggregation of weblogs instead of a wiki.  Its historical market data is actually a link to CBS Marketwatch, and its market news feed is a subscription based feed from financial data provider FinWin.  It is an interesting and useful site, and although it seems to sell First Horizon well, it appears to be in the early stages of its existence.

Blogs and wikis have funny names, and allow you to do some amazing things on your website on the cheap (for example, see www.bftcpa.com) and how I keep my website current with this blog.  CPA's should be careful with what they take on the internet on faith.  I like what I've seen of both these websites, and I think they will help practitioners be more productive and successful, but I also think they must be taken with a grain of salt (e.g. I don't think you'll see ads for Bank of America, Wells Fargo, Amsouth, Creative Solutions, or CCH on these sites), and the advice is probably only worth what you pay for it.  Although some good samaritans will do good work in these forums, some others may give bad advice, and only time will tell how well these sites will be edited for factual accuracy.

The other point to this rambling post is to call your attention to the democratization of the web.  Just four years ago, CPA2Biz was going to revolutionize how we all did business with our clients, and it did - by showing our profession that the democratization of information on the web makes it possible for any of us (even me) to have a website that looks as good as those of the big boys - we just have to decide what we want to accomplish and compile the data feeds which address those information needs.  The sooner you see the web and your intranet/Sharepoint site as a toolbox and not as a temple for super freaky geeks, the more opportunities you will see to optimize your communications to your target markets, and increase your team's productivity through targeted information sharing.  And that's what it is all about, isn't it?

Disclosure: I use Intuit's Quickbooks and Lacerte products, and am a fellow member of the Tennessee Society of CPA's, as well as a member of its professional development committee and the TSCPA Council,  TSCPA is First Horizon's partner in CPAFirstResource.com.  I am also a MS Registered Member, and teach courses for AICPA and Becker CPA review.  The thoughts here are mine alone and do not necessarily reflect any of the above organizations in any way, shape or form.  Just like the fuel economy sticker says on the window of a new car, your mileage may vary.