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Tax Software Marking Time for Web Adoption

Scott Fleszar, Thomson ReutersThere is a bit of a sense that vendors are marking time on the way to wide acceptance of Internet-based tax software. While there is no mass migration from desktop applications, there is the since that the move is inevitable. That includes Thomson Reuters which is confident that the SaaS version of UltraTax will eventually gain wide acceptance.

"The adoption of it within the profession is still slow," says Scott Fleszar, VP of strategic marketing for the company's Tax and Accounting business. "Nine out of ten customers that move to our SaaS environment have trepidation going in. Three or four months down the road they are kicking themselves as to why they did not do it sooner." About 25 percent of UltraTax customers are using the product on the Internet, whether as a SaaS or hosted product.

Fleszar notes the biggest barrier to SaaS adoption continues to be worries about security. "That is completely unfounded," he says. "It is far less secure to be trying to manage your own servers."

Likewise, CCH's efforts on the web are not having a mainstream impact because despite publicity about its ProSystem fx Tax SaaS, the product is still in limited release. But that's likely to end by January after some additional releases this year.

"Based on customer input, it's now going to be what I call market ready," says Mike Sabbatis, president of CCH. The product is being used by firms who have been selected by CCH.Mike Sabbatis, CCH . And Sabbatis says flatly that there "is nothing major for on-premise" in terms of new features for 2012, although CCH continues to enhance the calculation engine.

Similarly, the changes to Intuit's Lacerte and ProSeries lines are not radical. There are additional forms and features, but changes in bundling products is more significant as is a download only feature for some parts of both product lines.

And while the company is not promoting numerous changes to Intuit Tax Online, the company says that the web product is gaining momentum."We saw our business grow three times year over year. We saw big improvements in the product experience. We are seeing improvements in renewal rates," says Luis Sanchez, the online application's product manager.


The Desktop Arena

On the desktop, Thomson is adding a client lock option to UltraTax. That means once a returned has been signed and finalized, there is an option to make the form read only so that it cannot be changed.

Fleszar says UltraTax can also now link to external documents, meaning that preparers do not have to exit the tax application in order to access these items. For example, "if a firm has a preparer checklist, they will be able to link to it from the [UltraTax] home page," he says. Users will also be able to embed outside processes into the documents.

Also new is the ability to add diagnostics. These would include "things the firm wants to make sure are completed before the return is finalized," Fleszar continues. These can be added so that they are used automatically.

One of Intuit's changes is aimed at saving customers money by avoiding sales tax issues. It is provided a download-only option for both Lacerte and ProSeries, according to Lacerte product manager Mary Kroenung. That will produce a savings on sale tax in 14 states.

Intuit is also offering 25 free uses of its Tax Import for some pricing packages for ProSeries and Lacerte. Tax Import is a scan-and-populate tool that enables preparers to scan source documents and send them to input, which pulls the data for import into the tax preparation software.

Intuit continues to expand the number of efile forms available for Lacerte. Among those on tap for 2012 are Additional New York business forms for 1065, 1120 and 1120S; New York City 1040 returns; and Illinois and Wisconsin consolidated business returns. ProSeries is also getting more forms for efiling. These include federal 1041 Extensions; New York 1065, 1120, 1120S Extensions; and Pennsylvania 1065, 1120 and 1120S Extensions.

There is also a simplified approach to buying state efiling packages. They are now included in Lacerte Unlimited and REP products for Individual and Business forms instead of being purchased separately.

Looking for Partners
A major initiative is CCH's decision to open up its code base for development. Sabbatis says the company has "exposed a number of different data points for people who want to develop on top our platform. That includes one with workflow software maker XCM Solutions.

But the company also believes there is a demand from firms for customization on top of ProSystem. Rothstein Kass has integrated the firm's status system with the ProSystem efiling system. And Sabbatis outlines ways that others could take advantage of these capabilities. He says, "It could be things like workflow input techniques data gathering tools, if you want to If you want to present data to a client in a different way." The common client database in the CCH Suite means that customizations can be integrated across the line.

For companies like CCH Small Firm Services, which markets the TaxWise and ATX lines, the issues of preparer registration are probably more important than many of the changes to the product line.

SFS has allied with ExamMatrix to build a preparation course to simulate the test environment. There is a 10-hour bundle for continuing education credit for the registered tax return preparer exam.

"The RTRP competency exam and required CE credits are big issues for the SFS customer base," says Shannon Bond, product line manager of the company's commercial segment. Bond says research shows that nearly 40 percent of SFS's Small Professional Segment and 60 percent of its Commercial Segment are affected by the testing environment.

These customers are also being offered the chance to attend the first CCH Small Firm Services FastForward User Conference in Atlanta in October, which features up to 17 hours of CPE. SFS is also developing a marketing resource kit to provide training in marketing and advertising.

The company is enhancing data integration between its Fixed Asset Manager and ATX and TaxWise. A plug in will automatically updates data changed in FAM or the in the tax software, to keep that asset information consistent tin both systems.


Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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