THE TAX OFFICE OF TOMORROW A Supplement to Accounting Today

SR20
b
21st century tax
Bivins & Bunyak CPAs, which has offces in Denver and
Avon, Colo., is a frm that is not afraid of technology. In
fact, one could say that it is a tax offce of the future.
When I started my practice in 2006, I had recruited
a couple hundred clients, and [my family] made the choice
to move up to the mountains and I had to fgure out,
What is the best way to serve these [clients] without me
being there every day? So that was the catalyst for us
pursuing these things, said J. Elbert Bivins, who started
his business as a sole proprietor in July 2006, prior to
being a partner at Bivins & Bunyak.
Today, Bivins & Bunyak leverages technology, largely
the Thomson Reuters suite of solutions, to serve clients
remotely and drive effciencies within the 30-person frm.
The frms path to greater technology began several years
ago, when it implemented portals to better serve clients
remotely and facilitate document exchange. Around the
same time, the frm began electronically storing audit fles
and began using its audit engagement software to manage
its documents for tax work.
What makes that so good for us is that we have
really good scanning capabilities So, anytime that
people bring things in we scan them in immediately and
try to return it to them, if possible, right there, said Bivins.
It eliminates the awful paper shuffe.
Keeping up the momentum, the frm tossed its
old spreadsheets aside and migrated to a workfow
management module associated with its practice
management software, and can now easily assign and re-
assign based on workloads.
Then, in October of last year, the frm went
completely into the cloud using Thomson Reuters Virtual
Offce SaaS. It is so night and day from when I started
in public accounting in 2002. I remember stacks of these
legal-sized folders and they had all the years and prior-year
copies of workpapers, and peoples W-2s and K-1s are
stuffed in these things, said Bivins.
Today, those stacks of folders and the shuffing of
papers are gone, for Bivins & Bunyak and many other
frms that are ringing in a new era of tax and accounting.
MAJOR SHIFT
Industry sources agree that there are several factors driving
the change. It is a combination of factors expectations
of clients, anticipated cost savings, staffng challenges,
regulatory changes, data security concerns and fraud
prevention, said James Stork, vice president of education
for Drake Software.
When asked what is spurring the shift, Jordan
Kleinsmith, enterprise product manager for Thomson
Reuters, said that it is important for industry professionals
to understand that technology, especially do-it-yourself tax
prep software, is closing the tax knowledge gap between
professionals and the average consumer. For example,
the IRS stated that for the 2013 fling season there were
nearly 123 million e-fling receipts, of which more than
45 million were self-prepared. Looking to 2014, the IRS
announced that, for the week ending April 11, there were
more than 101 million e-fling receipts, of which nearly
40 million were self-prepared, compared with about
37.6 million in the year-ago period an increase of
4.5 percent.
With the commoditization of tax prep and more
taxpayers turning to DIY solutions, professionals
especially those wanting higher margins and a better
work/life balance are wise to not underestimate the
value of advisory services and the role that technology can
play in tomorrows tax offce.
Accountants need to fnd ways to pull data quicker
and provide more meaningful information, said Michael
Rasmussen, president of Conway, Ark.-based Rasmussen
Tax Group, a Thomson Reuters user that specializes
in serving restaurant clients. To provide a value-added
service to its clients, Rasmussen Tax Group has developed
a system called Eyenalyze, which pulls food cost data
directly from food suppliers, as well as labor and overhead
costs, then presents a report showing a restaurants
proftability on a daily, weekly and monthly basis. Clients
access the report through www.eyenalyze.com.
Eyenalyze is currently tailored for the restaurant
industry, but the frm is looking to add additional verticals
in the future. It is also planning to market the solution to
other accounting professionals looking to better serve
their clients.
TECH AND THE FIRM OF THE FUTURE
The successful tax offce of tomorrow will be focused
more on customer service, client retention and acquisition.
Similar to the advent of e-fling replacing the laborious
paper fling process data collection, input and
organization technologies will replace manual tedium
and free up time to focus on tax expertise, service and
customer satisfaction. Also, where the tax professional
actually performs the work will no longer be as important
as how the client is served, said Drake Softwares Stork.
David Wyle, CEO of SurePrep, a provider of tax
productivity solutions to public accounting frms whose
solutions include 1040Scan and SPBinder, agreed, You
dont need to be a genius to see that everything is moving
New tools and technologies are completely
reshaping the modern tax practice
By Antoinette Alexander
1. What will be the most
important changes for tax ofces
in the next few years?
Tax ofces must brace themselves for
a few changes. First, a shorter spring ling
season seems to be the new norm, as does a busier fall
season. Secondly, client
expectations will continue
to evolve as they look to
tax professionals to help
them navigate increasingly
complex regulations.
Additionally, nding
and retaining top talent
will become a bigger
issue, as the cycle of
churn resurfaces with the
recovering job market.
And, nally, in the face of
all these changes, rms
must embrace technological
change to effectively
assimilate information from
various sources, to deliver
higher-value service, and
to meet the expectations of
younger staff.
2. How are you
helping tax
practitioners prepare for those changes?
XCM is the foundation for an efcient, digital tax ofce
empowering rms to have greater control over and more
efciently manage their tax processes. Were expanding
integration with document management systems to help users
better manage information from any source at any point in the
process. Were also continuing to enhance our newly released
scheduling module, which includes both calendar and automated
tax scheduling to help rms better match work to available staff.
Finally, were building out benchmarking and dashboards to
help rm leadership have a better pulse on their practice areas,
thereby empowering them to deliver higher-value client service.
Founded in 2004 by CPAs, XCM Solutions provides
accounting rms with cloud-based workow automation
solutions that increase efciency, productivity and protability.
The companys management team has drawn on its extensive
experience in public accounting and clear understanding of the
paper-driven workow issues facing the profession to develop
technology that addresses those challenges.
With more than 25,000 users, the award-winning XCM
workow and information automation software is at the center
of todays digital rm. In 2010, CPA.com, a subsidiary of the
AICPA, and XCM Solutions formed a strategic alliance to bring
XCM into CPA.coms Trusted Business Advisor Solutions cloud
computing platform.
Spotlighton
XCM
Solutions
Cathy Foley, CPA, MST
Director of client
development, XCM Solutions
See 21ST CENTURY on 22
020_ACTJun14 1 5/16/2014 10:42:48 AM
THE TAX OFFICE OF TOMORROW A Supplement to Accounting Today
SR22
to the cloud.
What is especially important is the growing ability
to select cloud-based solutions that communicate and
integrate with each other. It is not just about the cloud
but also allowing integration with third-party vendors,
Wyle said. SurePrep, for example, states that its 1040Scan
Organize and 1040Scan Trades will work with any tax
software, and 1040Scan Pro and 1040ScanVerify integrate
with GoSystem RS, ProSystem fx Tax, Global fx, Lacerte
and UltraTax.
SurePrep user Jeff Whittler, who is an accountant at
Michigan City, Ind.-based Craighead, Lange and Hough,
agreed: In my opinion, the tax offce of tomorrow is
paperless, with documents being stored either on servers
or on the cloud. ... Many frms may downsize their
physical offce space to
allow staff to work from
remote locations, since
programs and documents
can be accessed outside of
the main building. Client
meetings may look very
different from how they
look now, maybe being
conducted via video chat,
instead of in a conference
room. I think over time
there will be less personal,
face-to-face interaction with
clients and perhaps even
staff members.
Whittler said that
the frm took its frst step
toward a less paper
offce in 2009 and, over the
last few years, it has tried
out various programs to
make data entry and auto-
fowing data more effcient.
This year, the frm began
using SurePrep 1040Scan
to further boost its paperless productivity. To take the
necessary steps to become more paperless, Whittler said
the frm has invested in high-speed scanners, and each tax
professional is now using three monitors to be able to view
numerous documents simultaneously.
Kleinsmith of Thomson Reuters believes that the tax
offce of tomorrow will not simply be paperless, but will
possibly cease to be a physical location in favor of a virtual
location. He noted that, as margins shrink on compliance
work, frms will need to take a closer look at the overhead
of a physical offce and evaluate the need for costly space.
Those frms that adopt advisory services now likely
wont feel the crunch of having the overhead of a physical
offce, said Kleinsmith. However, he cautioned that even
those frms that are offering advisory services and want
to reduce overhead costs should start leveraging such
technology as secure portals and document management.
Kleinsmith also said that not having a physical
location can present an opportunity to specialize. The
reasoning? Being a virtual frm removes geographic
borders, making it easier for frms that specialize in a
specifc niche or market to serve those clients throughout
the country or the world.
NECESSARY TOOLS
When looking at the core technologies that are a must for
the tax offce of tomorrow, theres no doubt that portals
rank high on the list.
Not only is this essential for security reasons,
but the world is moving away from paper, and clients
are going to all but demand this more effcient,
environmentally friendly way to send and receive
documents, said Stork, who noted that Drakes
SecureFilePro.com portal solution provides tax
professionals a secure
way to share sensitive
documents with their
clients.
Meanwhile, CCH
Small Firm Services, a
part of Wolters Kluwer,
and eFileCabinet inked
a partnership last year to
offer integrated portal/fle
sharing services to tax and
accounting professionals.
The frst product of the
new partnership was
PortalSafe, a Web-based
portal product enabling
the secure transmission
and storage of tax and
accounting documents
between tax and
accounting professionals
and their clients.
A key feature of
PortalSafe, according to
Jairam Padmanabhan,
vice president and general
manager of collaborative solutions at CCH Small
Firm Services, is the integration with its tax software.
PortalSafe utilizes technology developed by eFileCabinet
and enhances that technology by providing seamless
integration with TaxWise and ATX, the fagship tax
products of CCH SFS, which focuses on the needs of small
tax and accounting frms businesses that generally have
fve or fewer employees.
Whittler explained that his frm uses a client portal
to send and receive information to and from clients,
which has allowed the frm to provide clients with real-
time access to documents that it prepares for them, and,
reciprocally, has allowed its clients to send documents that
are needed straightaway.
Im getting this feeling that the technology is over
1. What will be the most
important changes for tax ofces in
the next few years?
The successful tax ofce of tomorrow will be focused more on
customer service, client
retention and acquisition.
Similar to the advent
of e-ling replacing the
laborious paper ling
process envelope
addressing and stufng,
postage meters, copying
returns, etc, data
collection, input and
organization technologies
will replace manual
tedium and free up time
to focus on tax expertise,
service and customer
satisfaction. Also, where
the tax professional actually
performs the work will no
longer be as important as
how the client is served.
2. How are you
helping tax
practitioners prepare for those changes?
Technologies such as GruntWorx will become the rst line of
efciency in this transition. GruntWorxs organize feature
takes scanned documents, and sends back a bookmarked and
organized PDF of client information that is suitable not only for
ling, but which may also be given to the client as a value-
added feature.
GruntWorx can also do the heavy lifting when it comes to
data entry, utilizing not only data retrieval technology, but a
human review process to ensure accuracy in automating data
entry.
Utilizing GruntWorx technology allows you to spend less time
on menial tasks and more time on building stronger relationships
with clients.
GruntWorx LLC is a Drake Enterprise company and leader in
cloud-based paperless tax workow systems. The GruntWorx
family of products has been in use for 8 tax seasons by
thousands of accounting professionals, from sole practitioners
to those working in large regional rms. GruntWorx is the
product of choice for tax professionals, with more than 25 million
processed tax forms.
Spotlighton
GruntWorx
Julie Pierce
Vice president and
general manager
GruntWorx
See 21ST CENTURY on 24
21st century
FROM PAGE 20
The world is
moving away
from paper.
022_ACTJun14 2 5/16/2014 10:43:18 AM
THE TAX OFFICE OF TOMORROW A Supplement to Accounting Today
SR24
the hump and is more acceptable, said Mark Ryburn,
product manager for accounting, audit and workfow at
Wolters Kluwer CCH. Accountants, by nature, tend to be
conservative, and I think they are catching up with
this technology, and when going paperless they do things in
stages.
In fact, Ryburn said that this year was a breakthrough
year for the companys AutoFlow technology, which
was released in 2009 and enables information to fow
automatically from scanned 1040 source documents to the
clients tax return.
Referring to Drakes GruntWorx, a cloud-based
paperless tax workfow system, Stork said, The time-
consuming process of organizing paper for the fle will no
longer be an issue. GruntWorxs organize feature takes
documents scanned in a haphazard fashion, and sends back
to the tax offce a bookmarked and organized PDF of client
information, suitable not only for the fle, but may be given
to the client as a value-add feature. GruntWorx can also
do the heavy lifting when it comes to data entry, utilizing
not only data retrieval technology, but also a human review
process to ensure accuracy in automating data entry. This
is not only true for simple source documents, such as W-2s,
but complex trade statements from brokers.
When discussing must-have technology, Mike
Giardina, chief executive offcer of Offce Tools Professional,
was quick to list portals and scan-and-fll, as well as
automated workfow. He noted that workfow should
include all communication, such as e-mail and phone calls.
The workfow should encompass everything in the offce,
said Giardina.
For the frm of the tomorrow, Giardina said that theres
new technology set to launch in late June. This includes
a client check-in system for the front end, which would
enable the client to check in upon arrival and update their
information. The tax professional would be notifed that the
client has arrived and would receive the updated information.
And, of course, when speaking of new technology one
would be remiss to overlook mobile.
Karen Stroup, vice president of product management at
Intuit, believes that mobility is enabling collaboration with
clients. For example, the Intuit Tax Online Mobile app allows
accountants to flter their client list and e-mail PDF versions
of tax returns to their clients.
More recently, Intuit launched the TaxLink app, a
client-facing app that works with Intuit Tax Online Mobile.
Clients can send and receive secure messages back and forth
with their accountant, and accountants can also share a PDF
of a clients return for review within the TaxLink app. Clients
can also take pictures of source documents, like W-2s and
1099s, and upload them directly to TaxLink.
Going forward, expect to see more client-facing mobile
apps, said Jerry Connor, product line manager for CCH
Axcess, that enable clients to see the status of their returns
and receive notifcations. That is the next wave well see in
mobile devices.
Recognizing the importance of mobile devices, CCH
continues to build upon the technology. In 2013 it unveiled
enhanced features such as the ability to share content via
e-mail and social media, to print content on the spot via
AirPlay printers, mobile availability of notes and annotations,
and easier state tax research access.
At Rasmussen Tax Group, mobile is the next step.
How do we get the information to make quick decisions?
It is buying time back through mobile, said Rasmussen.
[Identifying the] data we can pull through mobile devices is
the focus now.
WAIT THERES MORE!
Additional key technologies for the tax frm of the future
include multiple monitors (at least three), high-speed
scanners, webcams for video chat, and cloud-based
document storage.
While portals, scan-and-fll, cloud-based software
and automated workfow solutions are among those that
topped the list for the frm of the future, theres no denying
that the technology that most excites professionals today is
the digital signature.
In March, the Internal Revenue Service announced
that it now accepts electronic signatures on Forms 8878
and 8879, which allows for electronic signatures and
authorizes electronic fling of tax returns a move hailed
by industry professionals.
One of the things that Im excited about is the
clarifcation of what the IRS is willing to accept for digital
e-fle signatures, said Bivins of Bivins & Bunyak CPAs.
I think that anyone who has a portal and electronic
delivery in place when that happens is really going to reap
the benefts.
Echoing the sentiment, Stork of Drake Software
said, The IRS allows for digital signing of tax documents,
and weve added the Drake eSign product to give Drake
customers a seamless way to capture digital signatures. When
you combine GruntWorx, Secure File Pro and Drake eSign,
the idea of paperless truly becomes reality.
Following the IRSs announcement in March, CCH
revealed that its ProSystem fx Tax solution was ready for the
change with new CCH eSign functionality integrated with
Form 8879.
CCHs Connor said that the move to electronic
signatures is a major cost saver. A pilot conducted by
CCH last year found that the average cost per return for a
handwritten signature was about $18 when you factor in
such things as time, mailing, etc.
WHERE TO BEGIN?
Many accounting frms may be looking to become a
cutting-edge frm of the future, but may be left wondering
just where exactly to begin. Understand the pain points
of your customers. If a frm knows the pain points, they
can talk with providers to help implement the appropriate
solutions into the customers workfow, suggested
Padmanabhan of CCH SFS.
Bivins suggested that frms frst be honest about
their commitment. If youre not going to get 100 percent
staff adoption and 80 percent or higher client adoption,
then you and your people are going to be forever trying
to fgure out what a client prefers and what method of
communication, he said.
Stork recommended that frms select reliable vendors
who will provide training and help with the transition, and
he urged frms to make decisions early, as timing can be
critical. Anytime you adopt new technology, youll face a
learning curve. Allow enough time for your staff to get up to
speed. ... Discuss plans with your forward-thinking peers and
fnd out as much as you can about their experiences. It will
save you time and money, said Stork.
Paul Miller, president of Edina, Minn.-based
Business By Design, which specializes in designing tax-
effcient plans for small-business owners and entrepreneurs,
said that the future is driven by what the customer wants.
Accounting frms of the future need to realize
that people choose not to read. So, how do you deliver
information that is visual in format? So, the question
is, Who is the client of the future and what do they ask
of accountants? and the technology has to mirror that,
Miller noted.
In addition, frms looking to select and implement
the right innovative solutions shouldnt underestimate the
value of peer groups. Connect with peers, whether it be at
conferences or through an association.
I think professionals under-utilize those resources.
That is a good place to start. They can see a success story
and how to create a model, said Kleinsmith of Thomson
Reuters. If they arent seeing that [success story], then they
might want to join a more progressive group.
Giardina of Offce Tools Professional recommended
that frms frst make sure someone on the team assists in the
education process dont tackle it alone. The next thing to
do, he said, is attend technology conferences to connect with
others who may have the same questions, meet vendors who
can offer solutions and talk with industry experts who can
share advice.
If you dont get out and connect, you isolate yourself,
he warned. AT
21st century
FROM PAGE 22
Understand the
pain points of
your customers.
024_ACTJun14 3 5/16/2014 10:44:04 AM