James Bourke

Supporting Applications and Selection of Deliverables

Use this pretax IT checklist to ensure your technology is ready for busy season!

February 28, 2011
by James Bourke, CPA.CITP


In evaluating your tax season technology needs, break your analysis into the following areas:

  • Supporting Infrastructure
  • Tax Preparation Applications
  • Supporting Applications
  • Selection of Deliverable

Supporting infrastructure and tax preparation applications were topics covered in last month's article. This column covers supporting applications and selection of deliverable.

Supporting Applications

Our profession has witnessed a surge in applications that support the professional in moving tax returns from point of entry to delivery. For purposes of this article, we'll focus on scan and populate technology and digital workflow.

Scan and Populate is not new to our profession, but is now starting to catch significant momentum, with the big tax preparation vendors and Big Four firms realizing this as a technology that can increase an already very profitable area of practice.

Simply put, scan and populate allows a firm to scan source documents (i.e. W-2s, 1099s, K-1s, 1098s and more) and have that data be automatically populated into the tax-return application with little or no human intervention.

First introduced a few years back, this technology was originally developed to facilitate the model that allowed for the outsourcing of the preparation function for individual income tax returns. Fast forward to present, with outsourcing having fallen out of favor, the vendors in this space took their technology to the next level, providing for a function that would allow firms to potentially streamline the tax preparation process by allowing at least a portion of the preparation to be done seamlessly.

Although this technology is not a replacement for an entry-level tax preparer, this technology is yet another tool that can assist the professional in the tax preparation process.

When selecting a scan and populate vendor, go with one that has a good relationship with your tax application vendor, as clean and accurate integration is a key to success with this technology.

Digital Workflow is an example of another supporting application that can make getting through tax season just a little bit easier.

Digital workflow allows the professional to know exactly where in the pipeline a specific job may be located. In addition, this technology will be the tool that will allow tax preparers and tax reviewers to collaborate on jobs and deal with issues and problems.

The days of using spreadsheets and manual methods for this purpose are over. A number of vendors in this space offer solutions that can track a job from the time it comes in until the time it is delivered to the client. When selecting a vendor, don't just focus on a technology that does a good job with the tracking of a tax return through the firm, instead choose a vendor that understands your workflow and work product and select a solution that works for every type of work product that your firm may have from attest function engagements to litigation support engagements to tax preparation.

Selection of Deliverable

If your firm is like most, although you provided your individual and entity clients with a paper copy of their returns, they call you when they refinance, secure new debt, enter into large financial relationships, complete college loan applications, etc. They inevitably request the return in digital format to facilitate the submission process. So why not give them that digital image at time of completion? Using most tax applications today, printing to a PDF document is just as easy, if not easier, than printing a paper copy.

For purposes of digital delivery, the recommend approach would be either portal or CD. Never utilize e-mail to deliver a tax return to your client. The reason is obvious: It's just not secure!

Delivery via a Portal

A good client portal will generally have the following characteristics:

  • Web-based
  • Accessible 24/7
  • Secure and protected
  • Easy to access
  • Fully integrated into the CPA firm’s existing electronic storage facility

The portal approach places a greater burden on the client to “come and get the return” versus the firm incurring an additional cost to furnish the digital return on some type of media, such as a CD.

Another advantage with the portal approach is the portal’s ability to act as the client’s file or storage room. Many firms migrated the final work product as well as the client-source documents, client tax organizers and made these items available to the client. Some firms have even turned this concept into a revenue-generating option, charging a monthly fee for such storage and/or access.

Delivery via a CD

Many firms prefer this approach to portal for the following reasons:

  • The cd is physically delivered to the client, thus resulting in something tangible being sent to the client.
  • The cd approach places the burden on the client to store their CD for future reference as opposed to the burden on the CPA firm to provide access to the information.
  • The cd and/or data files can easily be password protected.
  • The CD can be labeled and enclosed in the CPA firm’s branded materials.
  • The cost of shipping a CD vs. the cost of shipping paper is substantially less, especially with large, multi-state entity returns.

Always password protect data when the CD-delivery method is chosen and communicate that password under separate cover and not include it with the same package that accompanies the CD when delivered to the client.

Do You Need to Get Your Client to Buy in or Do You?

Firms that have made a successful transition from paper to digital have done so by default. Many firms send pretax season correspondence to their clients that include correspondence such as:

This year our firm will be delivering your taxpayer copies of your tax documents in electronic (PDF) format. We believe such delivery helps to insure that your confidential information remains secure and private. If you have any questions on this delivery method, please give us a call.

The above approach definitely works. Firms that give clients the “option” of receiving their copies in electronic format, with paper delivery as the default delivery method, will generally find that their client’s nonresponse does not necessarily mean they prefer paper.


Keep in mind that many of the technologies mentioned cross over into other areas of the firm. Firms engaged in providing financial planning services, family office support, etc. are also ideal candidates for many of these technologies that are designed to streamline workflow and help to protect confidential and private personal information!

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James C. Bourke, CPA.CITP.CFF, is a partner at WithumSmith+Brown where he is director of Firm Technology. He is a past president of the New Jersey Society of CPA’s and currently serves on AICPA Council and the Chair of the AICPA CITP Credential Committee. He has been continually named by Accounting Today as one of the Top 100 Most Influential People in the Profession.