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Barry MacQuarrie
Tax Season Is Only a Few Months Away

How SaaS solutions can make your tax season more profitable.

September 3, 2009
by Barry MacQuarrie, CPA.CITP

Well, here we are again! It’s September and CPA firms across the country are coming to the realization that another tax season is just around the corner. It seems like the 2009 tax season just ended! Do you remember sitting around the office in May saying, “Next tax season, we’re not going to …” or “Before next tax season, we better …” Many of these post-tax season resolutions relate to a firm’s investment in or use of technology.

Have you made any progress on your post-tax season resolutions? September is often the month when we crank up the stress as we realize there are only four months until tax season. So, how are you going to invest your money and time during the next four months?

Let’s take a look at the hot topics in the world of CPA firm technology.

Process Review and Improvement

Do you know how your firm processes tax returns? Do you know the steps involved in recording time and preparing bills in your firm? This may seem like a silly question but most CPA firms waste a lot of time and effort performing unnecessary tasks as part of their business processes. These are often the result of that’s how we did it last year or that’s just the way they like it done.

It may prove valuable to have someone document your existing business process and identify tasks that can be eliminated. You can use a product like Microsoft Visio or SmartDraw to create flowcharts that are a visual representation of your business process. This allows the firm to prepare “As Is” and “Should Be” models of their process. The “Should Be” version will show how a more streamline process can be developed to save time and money.

Yes, what I am suggesting is “change.” I know that change is often a difficult thing to accomplish in a CPA firm but it can have profound effects. Imagine how much money your firm could save if you switched to front-end scanning and eliminated the need to walk documents around your office. Imagine how much easier life would be if everyone prepared their bills onscreen thus eliminating the need to print work-in-progress reports and pay others to type your bills.

There’s plenty of time between now and January to document your current business processes and determine what improvements can be made before tax season.

Data Protection

Many states have enacted legislations that require businesses to protect personal data that is entrusted to us by our clients. The Massachusetts regulations (201 CRM 17) are among the toughest in the country and have CPA firms scrambling to find solutions. As you read the various regulations, you get the sense that they require behavior that just makes “good sense” for your business. During the next four months, you should consider the following data protection measures:

  • Determine what state laws or regulations apply to your organization;
  • All laptops and desktop hard drives should be encrypted using full disk encryption (see related story in this issue);
  • Encrypt all external hard drives, personal digital assistant (PDAs), backup tapes and Universal Serial Bus (USB) drives;
  • Use a client portal and/or encrypted e-mail to securely exchange data with your clients;
  • Do not allow anyone to send sensitive data in an unencrypted e-mail message;
  • Impose strong network passwords and require that they be changed on a regular basis; and
  • Encrypt all wireless access to your network.

These changes will take time and money to implement properly. With only four months until tax season, you need to get started as soon as possible. Whether required by law or not, protecting the data that has been entrusted to your firm just makes good business sense.

Software-as-a-Service (SaaS)

Software-as-a-Service — popularly known as SaaS — is a very hot topic in the CPA industry and several vendors are now offering their software in a SaaS model. Simply put, the Software as a Service model allows firms to rent rather than purchase software. The software company, rather than the customer, is responsible for maintaining the network infrastructure and making it available to the customer via a web browser.

There are a lot people writing about and debating if SaaS is the right model for a CPA firm. The topic has gained a lot of momentum as vendors release new SaaS versions of their software and CPA firms benefit from widely-available Internet connectivity.

I’m not sure that there is much to debate — the SaaS model works. There are several CPA industry vendors that have been successfully offering the model for several years. In my May article, titled Cloud Computing, I showcased vendors, such as XCM Solutions, Reqwired and Virtual Office CS, that offer SaaS solutions that work.

There is enough time during the next few months to research and evaluate the products that are available. The use of SaaS solutions may not only make your tax season more efficient, but also profitable. Who wouldn’t like that?

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Barry MacQuarrie, CPA.CITP, is the Director of Technology at KAF Financial Group. MacQuarrie has extensive experience working with CPA firm technologies and expertise in workflow, process improvement, disaster recovery planning, security and paperless office technologies.