Evaluating Tax Preparation Software

Evaluating Tax Preparation Software

Efficiency and accuracy are critical to accounting businesses of all sizes. As you position your practice for growth, choosing the right tax preparation software is an important step towards making your business scalable.

With dozens of software packages available on the market, making a decision can be a daunting process. The program you select will become the backbone of your practice, and will represent a significant investment in terms of dollars and time invested in learning the ropes and training the staff.

In order to make the right choice, consider these questions as you evaluate your options.

What features of the software are mission-critical for your practice?

Every firm is different, and the software package offerings vary to reflect that. What elements of the solution are most important to you? For some firms, remote access is key; for others, integration with specific software packages make or break the decision. Start with your needs, and let that list inform the next steps.

What kinds of clients do you serve, and what is the typical complexity of the returns you prepare? TaxAct Professional software may be the best fit for a small tax-focused firm or a sole preparer. Intuit - Lacerte Tax is great for accounting firms with business and individual clients, complex and inter-related returns, and those who wish to integrate the tax preparation solution with QuickBooks. These are just two platforms out of dozens available.

Know your practice, and remain focused on mission-critical solution components – so that you do not drown in technical details that may or may not ultimately matter.

Can the tool be integrated with your other software?

Manual data entry is slow and prone to errors. How will the tax preparation software integrate with other programs that you use?

On the same note, particularly if you are transitioning from one tax preparation software to another, how easy will it be to migrate the data?

Do you like workflow organization and transparency?

Your team will rely on the program’s workflow to ensure that no returns fall through the cracks. Assess the convenience and transparency of the dashboard. How intuitive is the interface and the workflow? Will it help your staff work together efficiently and accurately, or will it be a source of confusion?

Look at the reporting functionality of the system, as well. Actionable dashboards and reports can help you prioritize and take concrete steps.

What is the cost?

Cost can be an important consideration. Many programs come with bundle pricing options, and some offer budget-priced options and per-return price structures for lower-volume preparers. Consider how the overall cost will fit into your budget, and how quickly the software will pay for itself.

How intuitive is the interface?

There is a learning curve associated with every system. However, some interfaces are more intuitively laid out than others. A live system interface demonstration, available through most providers’ websites, will give you a good sense for ease of use and convenience of layouts.

Is tax research integrated into the tool?

Integrated research functions can significantly streamline your processes, as well as save you and your staff valuable time. In addition to the overall index, does the software offer line-by-line form instructions, as well as additional research capabilities (either built into the database, or conveniently organized and accessible via links)? Is there an online community forum for users?

How good is customer service?

Be clear on the modes of customer service available to you as part of the package (most software comes with live chat and phone support service).

Do some research to get a sense for customer service responsiveness. Various surveys of tax preparation software packages are available online, and quality of customer service is often one of the metrics. In addition to reading online reviews and comparisons, consider reaching out to your network for real-life feedback. After all, customer service will be your lifeline if something goes wrong with the program during your busiest time.