James Bourke

Pre-tax Season Technology Checklist

Evaluate your firm technology and do some last-minute tweaks now to ensure your busy season is a success.

January 31, 2011
by James Bourke, CPA.CITP


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

  1. Supporting Infrastructure
  2. Tax Preparation Applications
  3. Supporting Applications
  4. Selection of Deliverable

Supporting Infrastructure and Tax Preparation Applications will be covered in this month's column, while Supporting Applications and Selection of Deliverable will be covered next month.

Supporting Infrastructure

Supporting infrastructure includes bandwidth, redundancy, switches and other network management devices, as well as all end-user equipment from laptops and desktops to personal scanners.

If it has been over a year since you examined your bandwidth needs, now is the time to pay a visit to your vendors in this space. Although vendor pricing plans have not moved significantly over the past year, I will guarantee you that you can get more bandwidth for less! If your current vendor is not supporting you in this effort, there continues to be a significant amount of competition that will work to your advantage. I recommend shopping around, getting your best price and then bringing your best deal back to your original vendor. If you are currently locked into a contract with your existing vendor, worry not, most are willing to renegotiate, so long as you are interested in increasing your bandwidth needs. (If you are contemplating lowering your bandwidth needs then you will have to wait until your existing contract terminates).

Many vendors will run bandwidth tests at different points in time, and/or examine usage logs to determine peak volume and needs when discussing your bandwidth needs. Be very, very careful with the vendor drawing conclusions from the results of this analysis. Often vendors don't understand the workload compression associated with our profession. If determining a need based upon November usage, a firm could easily find its pipeline significantly bottlenecked come March! Do your best to educate your vendor about your specific business, including the needs brought on by tax season.

When examining primary bandwidth needs, don't forget about redundancy. Don't settle for one pipeline or pathway to the Internet. If you are utilizing cloud-based tax preparation applications and/or supporting applications that utilize the cloud model for computing, every minute of downtime equates to lost potential revenues for the practice. Since most firms earn a significant amount of their annual revenues during the months of January through April, an alternative pipeline is an absolute must.

A redundancy cost for your firm’s secondary bandwidth doesn’t have to parallel that of your primary bandwidth. Using a slower, but still functional alternative solution allows your firm to be functional in the event of an outage in your primary line. In addition, select both an alternate vendor and alternate technology for the redundant line. If your primary vendor line goes down, you run a high risk of that same vendor's alternate line also going down. In addition to selecting different vendors, give some thought to selecting different technologies for your primary and secondary lines. For example, if you select a T-1 line for both your primary and secondary vendor — although your vendors may be different — they may be using the same infrastructure and switching stations to deliver your bandwidth. In the event of an outage, you could potentially lose both pipes. If T-1 was chosen as your primary technology, consider cable, fiber or another vendor's technology to provide your secondary line. There are enough vendors in this space, offering multiple solutions to be able to accomplish this task.

When it comes to switches and other network management devices, consider bringing in an outside consultant to spend a few hours examining their functionality. Like end-user computers, many of these intelligent devices have BIOS (Basic Input/Output System) or memory cards or chips that require updates to be functional as new technologies are introduced to allow them to work continually with next generation technologies as they are introduced.

Finally, under supporting infrastructure, ensure that all end-user equipment, including laptops and desktops are current with the latest version of the vendor's operating systems and that all BIOS updates have been applied. Similar to the updates, BIOS updates allow older end-user pieces of equipment to function smoothly as new technologies are introduces. In addition, vendors often fix bugs and operational issues that were discovered in older releases, making periodic BIOS updates a must. The source for BIOS updates will generally be the equipment vendor's website and most have simplified the process allowing even the novice end-user the ability to easily locate, download and apply these updates.

Tax Applications

By this time of year many firms have already signed or negotiated their vendor contract for their tax application for next tax season.

If you are still in the process of selecting a tax preparation vendor's application, evaluate a cloud-based solution. Many vendors now have cloud-based offerings that are available to firms ranging in size from the sole practitioner to the Big 4.

Cloud-based tax preparation solutions offer the tax preparer the ability to access the application and data 24/7. The data is generally stored in SAS 70 (soon to be SSAE16) certified data centers and such data is generally replicated at numerous data centers in the event of failure at one or more centers.

Today's cloud-based solutions have come a long way from those available on the market just five years ago. With privacy and confidentiality laws and legislation continuing to place greater accountability on those who possess such private and identifying information, cloud-based solutions afford tax practitioners a level of security comfort that cannot even be matched by in-house systems.

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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 CPAs 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.