2018 CPAFMA Technology Survey Findings – Part 3

CPA Tax and Audit Applications and Technology

The CPA Firm Management Association recently conducted its second comprehensive technology survey tailored specifically to member firms with the goal of identifying the applications, products and processes utilized by peers.  Where possible, the survey attempted to identify which applications firms are moving to in the cloud compared to traditionally on-premise managed solutions.  The survey was conducted in December 2017 to determine what information technology firms would be utilizing in 2018 and compared to the results from 2016 where appropriate.  This survey further highlighted the unique nature of CPAFMA member firms which tend to be medium and larger sized firms.  174 CPAFMA members participated, 88% of which had 10 or more personnel and 40% (70 firms) were multi-office.  The survey is broken into three sections: CPA Technology, CPA Practice Management, and CPA Tax and Audit Applications and Technology.  Below you will find the results from the third part of the survey on CPA Tax and Audit Applications and Technology:

Tax Applications: This survey was combined with the previous SaaS/Cloud survey with the intent of identifying which applications are moving to the cloud as there have long been tax, document management portal and research tools available.  Below we summarize the tax application trends within CPAFMA peer firms.

  • Individual/1040 Production: CCH continued to be the dominant 1040 application used by respondents with 74 firms selecting it (including 32 in the cloud). This was followed by 36 firms Thomson’s UltraTax (of which 23 were in the cloud).  Nine member firms utilized Lacerte, with four being cloud-hosted
  • Business/Other Returns: Not surprisingly CCH was again dominant in business tax applications with 75 responses (33 Hosted Cloud/Axcess) followed by Thomson Reuters UltraTax with 37 firms (of which 23 were in the cloud). Also, seven members selected Lacerte, of which four were in the cloud, pointing to the transition towards more cloud/hosted applications over the 2016 findings.
  • Tax Bookmarking: With the preponderance of firms using CCH for tax processing, it remained no surprise that CCH FxScan was the most dominant bookmarking tool with 50 firms, followed by SurePrep having 12 responses, and five firm each selecting Gruntworx and Thomson Reuters’ Source Document Scanning. According to the 2017 CPAFMA Paperless Benchmark survey, 67% of peer firms were utilizing automated tax bookmarking tools.
  • Tax Scanning to OCR: CCH FxScan was also selected by the majority of firms (46 of 62 respondents) that were utilizing Optical Character Recognition to import data into their tax programs. CCH was followed by SurePrep with seven responses and three using Thomson’s Source Document Scanning.  The 2017 CPAFMA Paperless Benchmark survey found that 49% of peer firms were utilizing Scan to OCR applications.
  • Client Data Accumulation: A new question this year meant to explore the adoption of client data accumulation applications in lieu of using organizers, found that 18 firms planned on piloting CCH’s My1040 Data application in 2018, followed by two firms planning to use Thomson Reuters FileCabinet and Workpapers CS. Lacerte Link and TaxCaddy were also selected by one firm each for this upcoming busy season which will overall be a new product category to watch.
  • Dedicated Workflow: While we see many firms traditionally utilizing Practice Management Projects to track tax workflow, the trend towards dedicated tools continued from 2016. The top three products that peer firms have transitioned to were XCM (19 firms), Thomson FirmFlow (16) and CCH Workstream (10), followed by two firms each Doc-It and OfficeTools.  This is an area we see a continued trend towards firms adopting in the next few years as the efficiency gains within firms are touted by each of the vendors.
  • Tax Research/Forms: Thomson’s RIA Checkpoint continued to be the dominant Tax Research tool utilized by 68 responding firms, followed by 51 firms using CCH Intelliconnect, and 38 using BNA. With only 112 firms responding to this question, the numbers point to many firms having duplicate products, which should be evaluated to eliminate redundancy in licensing and training.  For accessing tax forms, 50 respondents stated they used CCH, while 43 utilized Thomson RIA Checkpoint, and 12 had BNA’s SuperForms product.
  • Tax Projections: A new question in this year’s survey asked what firm were utilizing for tax projections. CCH’s Planner product was the top product selected by 40 peer firms, followed by 36 firms utilizing BNA Income Tax Planner and 19 using Thomson’s UltraTax Planner.
  • Tax Portals: The survey split out the Portal/Secure Email question from the 2016 question, with the most utilized portal product in this year’s survey being CCH’s Portal with 55 firms. This was followed by 21 firms utilizing Thomson products, and 14 standardizing on Citrix’s ShareFile portal.
  • Tax Secure Email: The leading secure, encrypted email solution for delivery of tax returns was once again Citrix ShareFile with 52 of 89 firm respondents selecting it. This was followed by 13 cPaperless SafeSend respondents which was a noticeable increase from the 2016 survey. The survey also identified five firms utilizing Mimecast and four firms using CCH’s Share Safe product which allows for secure delivery without having to setup a separate portal.
  • Digital Signatures: Another added question within the 2018 IT survey found 23 respondents utilizing Right Signature as the electronic signature application.  This was followed by 13 using CCH’s product, and 12 each using cPaperless SafeSign and Thomson eSignature. With these products maturing and firms doing more digitally, we anticipate a noticeable jump in this category in the future.


Audit and Accounting Applications: The survey also asked questions specifically in regards to assurance services to identify adoption of the following applications and utilities:

  • Audit Binder: The dominant engagement binder application utilized by firms was CCH Engagement with 68 firms. Within these CCH respondents 25 firms stated they hosted their binder in the cloud, which would point to firms hosting their networks with Citrix or Windows Terminal Server as this is not anticipated to be part of the CCH Axcess suite for another year or two.  22 firms utilized either Thomson Engagement CS or their web-based AdvanceFlow product, followed by 9 member firms utilizing Caseware.
  • Audit Analytics: Only 28 firms provided a valid answer regarding Audit Analytics tools which was a new question asked in this year’s survey. ProfitCents was the most often selected application with 23 firms utilizing it, followed by RMA with five firms responding they use it. We anticipate the upcoming rollout of artificial intelligence (AI) and big data analytics tools being integrated into accounting products will increase adoption of this type of application.
  • Data Extraction: While being touted by digital audit pundits for more than a decade, the majority of this year’s respondents (36 of 62) continued to utilize Excel manually for data extraction. Of the dedicated data extraction tools, Active Data (an Excel add-on) had ten users, followed by seven IDEA and four ACL firms. Within “other”, three new products emerged including three firms utilizing TeamMate Analytics, and one each using MindBridge and Validis, which have been touted as the next generation of data extraction and AI tools.
  • Client Accounting: It comes as no surprise that QuickBooks is the dominant tool for client accounting with 80 of 97 (82%) responding firms utilizing it, and an increasing number being operated in the cloud. Thomson was next on the list with 29 firms using a combination of their Accounting CS and CSA as well as 21 firms utilizing Sage/Peachtree products, with some firms utilizing more than one application.
  • Client Payroll: QuickBooks was once again the dominant application firms utilized for producing client payrolls with 61 of 86 (71%) respondents selecting the application. Thomson Reuters took the second spot with 18 firms, 12 utilized ADP, and four Paychex, with all vendors having more cloud usage than on-premise.
  • Depreciation: This question was added this year with Thomson Reuters Fixed Asset CS being the most selected product (51 of 100 firms) followed by CCH Fixed Assets (44 firms). The other products listed by peers were AssetKeeper and BNA FAS with seven firms using each application.
  • Working Remotely: Citrix was utilized by 55 firms (55% of respondents to this question) followed by 30 firms (30%) utilizing Microsoft Windows Terminal Server/RDS for remote access, which flip-flopped from the 2016 survey. The remainder of firms either did not have a remote access tool or utilized VPN or another of the remote support tools which was split into a separate question in 2018.  Interestingly, six firms had at least half their personnel work remotely one day per week or more, 19 firms estimated between 20%-49% of their staff worked remotely one day per week or more.  17 firms estimated that between 10%- and 19% of staff worked out of the office at least one day per week and 33 firms estimated it was between 1% and 9% of their staff that did this.
  • Remote Access Support: For providing remote support to clients, 25 respondents (30% of respondents) selected LogMeIn, 15 firms (18%) utilized TeamViewer, nine firms (11%) selected GoToMyPC and eight firms (10%) selected GoToAssist/GoToMeeting. The survey also found six firms utilizing Join.me and five using ScreenConnect, which had not appeared on the previous survey.

Cloud Future: The survey’s final question asked when the respondent believed that the majority of CPA firms will run entirely in the cloud with no local servers.  A surprising 40% estimated it would happen between 3 and five years, another 40% thought it would be between five and ten years and 8% believed it would take 10 years or longer.  14% estimated that it would be less than three years, which we would agree with by quoting Bill Gates when he was Microsoft’s CEO:

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.  Don’t let yourself be lulled into inaction! “


 About the Author

Roman H. Kepczyk, CPA.CITP is the Director of Consulting for Xcentric, LLC and works exclusively with accounting firms to implement today’s leading best practices and technologies incorporating Lean Six Sigma methodologies to optimize firm production workflows. Roman is also the author of “Quantum of Paperless: A Partner’s Guide to Accounting Firm Optimization” which includes the results of the 2018 CPAFMA IT Benchmark Survey.