A great migration for CPA firm software is beginning again. It’s reminiscent of the first major migration when stand-alone tax software took over the desktop in 1991 revolutionizing professional tax preparation. By 1999 QuickBooks was described as a modern business miracle ushering in the operating system migration to Windows with or without our favorite tax software. A number of vendors decided not to make the technology investment and sold out.
The latest migration has the attention of CPA technologists who have been forecasting the coming of the cloud for the last five years. The cloud is not the only migration; a transition is also occurring which dramatically reduces the cost of tax software. The combination of stronger capability and lower price has created a great migration to affordable tax software. Small firm owners who have used several tax software packages over the years are now considering the cloud for tax prep. After several tax seasons they found their tax software solution acquired by a larger competitor. This provided a more robust tax prep feature set in most cases and, over time, a more robust price tag.
I talked with two CPA firm owners at the 2015 California Accounting & Business Show and Conference in Los Angeles who confirmed they had made the switch to tax software which cost them $1,100 a year versus the $16,000 they were paying annually. Both CPAs confirmed their prior vendor offered substantial discounts to retain them as customers but it was not enough to keep them from making the switch. Both said the support during tax season was a major improvement with the new software. Research revealed 10 more practitioners making the switch.
Concerns about making the change focused on the learning curve. After several staff members grow accustomed to the way the legacy tax prep software package works, they may be loath to making a change. “For 12 complicated returns, I still use my prior package on a per return basis,” one Woodland Hills CPA said.
The rhetoric to move to the cloud is no longer just a paperless promise. Most CPAs absorb that software as a service (SaaS) is another way of saying, “you can never own this software; you can only rent it.” Nevertheless the cloud model is catching on. It would be hard to find a CPA who doesn’t utilize cloud-based payroll. The cool thing about payroll is the evolution of price and services. Heffy Provost, the new vice president of product operations at CCH, recommended attendees of his presentation at the California Accounting Show visit the ZenPayroll exhibit. Provost suggested ZenPayroll commoditized payroll and believes tax prep could also be commoditized. To save you time, ZenPayroll offers very easy to use payroll at half the cost. I was intrigued by ZenPayroll’s price, but not enough to switch to it after seeing the job posting and HR functions in ADP.
While all accounting functions may not move to the cloud because of security, there are advantages of gaining functionality that was once unavailable. AppRiver permits Office 365 Plus use on a per month basis. Gravity Software provides the use of Microsoft Dynamics on a per month cloud delivery method. Early cloud pioneers seem to come from San Diego, take Cloud9 Real Time, and Abacus Data Systems for example. The original incentive was a way to cloud-host the desktop version of QuickBooks before Intuit crafted a desirable cloud-based QuickBooks system of their own. Companies like Gravity and Abacus Data offer robust accounting packages. Abacus Data Systems has battle tested their cloud based accounting and time and billing in law office practice management.
Potential migrations were also predicted at the California Accounting Show by technology futurist Rick Richardson, CPA during his keynote presentation. Richardson said, “by 2020 there will be no more checkbooks or CDs and 25% of payments will be made with ApplePay.”
Richardson spoke about Tableau Software and said it is better than Excel. Any tool better than Excel should be music to an accountant’s ears. Tableau is a tool for Excel which displays data more graphically.
When contemplating migrating to the cloud consider the independent www.technologythisweek.net by Richardson and www.asaresearch.com by J. Carlton Collins, CPA. When it comes to migrating tax prep software and saving $14,900 a year consider the words of the Woodland Hills CPA who said, “What are you waiting for?”
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