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IT Predictions For 2007 And Beyond =

Column: Technology in=20 Practice

By Roman=20 Kepczyk, CPA.CITP

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From the January-March 2007 Issue & 2007=20 Tax Season Survival Guide

Evolutions of information technology have had a profound impact on = tax and=20 accounting firm production processes leading to almost completely = digital=20 processes as best practices in firms today. These technologies translate = to=20 enhanced efficiency and improved profitability for those firms = successfully=20 embracing them. While firms should implement technologies on the stable=20 =93leading=94 edge of technology, often the way we get clients to = embrace these=20 technologies is to give them an understanding of future =93bleeding=94 = edge=20 capabilities. Included here are nine 2007 predictions for technologies = that are=20 here today and on the horizon that will likely change our profession. = Please=20 note these predictions are based on information available in October = 2006 and=20 may be superseded by year-end technology announcements.

Tax Workflow Management Redefines Firm = Processes
Tax=20 production improved with the advent of document management applications = that=20 took traditional paper files off the shelf and put them on computer = screens so=20 they could be accessible to anyone that was authorized to view them. = While the=20 archival and search capabilities improved significantly, firms have = struggled to=20 change their production workflows to optimize tax engagement management = with=20 different applications being used for due-date monitoring, = communications and=20 image acquisition. Intelligent scanning capabilities that could organize = a=20 scanned image of a client document so it could be efficiently input = on-screen=20 into the tax program were added with CCH=92s ProSystem fx Scan, = GoFileRoom=92s TaxSort, and Doc-It=92s Forms Recognition, but the bar = has been=20 raised for the 2007 tax season with SurePrep=92s 1040Scan, which = includes=20 =93intelligent input=94 of recognized data fields directly into 1040s = for GoSystem=20 RS, ProSystem fx and Lacerte. The program currently recognizes input = from most=20 1099, K-1 and W-2 forms, as well as over 30 different brokerage = statements,=20 which significantly reduces time spent on keypunching and verification = of this=20 data. Intuit also recently introduced a product in this genre called = Source Doc=20 Auto-Entry for ProSeries and Lacerte.

Excel 2007 Drives Last Office Implementation In=20 Fall
Excel has always been the =93accountant=92s hammer=94 = used by=20 practitioners for doing virtually any project that would require = calculations.=20 With Excel 2007 increasing the spreadsheet grid to 1,048,576 rows and = 16,384=20 columns, Excel will be capable of handling even more advanced data = management=20 needs that traditionally required Microsoft Access or data extraction = tools such=20 as ACL and IDEA. With Excel having a much shorter learning curve than = the=20 extraction tools, we anticipate that Excel-based tools such as Active = Data will=20 take off or such routines will be integrated by the audit applications. = We=20 anticipate the accounting vendors to stabilize their utilization with = Office=20 2007 products over the summer, and firms will transition beginning in = September=20 2007 and lock down on this product through 2010. This may be the last=20 workstation install of the Microsoft Office as competition from = web-based=20 solutions including Google and Linux will drive Microsoft to match the=20 offering.

MS Office Accounting 2007 Takes QuickBooks Head = On
Let me=20 start by saying that I LOVE QuickBooks Professional 2006, and it makes = my=20 company=92s internal accounting more effective today than any other time = in my=20 professional career. With the addition of document management tools such = as=20 Personable SourceLink and Cabinet NG, scanned images of source documents = can be=20 attached to QuickBooks entries, creating a completely paperless = accounting=20 infrastructure that can be backed up and provide disaster recovery for=20 accounting processes. Why Intuit has not integrated this feature in = QuickBooks=20 2007 is surprising, particularly as Microsoft is touting that it has = included=20 this capability, as well as being fully integrated into Microsoft Office = 2007=20 applications, which will make it particularly attractive for new = businesses=20 starting this year. History has shown that when Microsoft integrates = products=20 into its Office suite, they can take on competitors such as Lotus 123,=20 WordPerfect and even Netscape Navigator. Microsoft has even stated that = ALL of=20 our QuickBooks history will transfer. With the promise of a completely=20 integrated product having digital source document capabilities, our = organization=20 plans to convert all data and run parallel accounting through a year-end = rollover and into January. Expect to see an article in a future issue on = what=20 product we kept.

SharePoint Drives Firm Knowledge = Management
Virtually=20 every firm today has three information =93buckets=94 that include the = following:=20 data actively managed within their accounting applications, data = archived in=20 document management applications, and the rest of the firm =93stuff=94 = such as=20 policies, procedures and resources in the firm intranet. Most firms = manage the=20 other stuff using web design tools such as Microsoft FrontPage, but this = has=20 been mostly limited to hyper-linking files from the intranet to source=20 documents. We expect the gradual adoption of Microsoft SharePoint in the = next=20 year, which will take firm intranets to another level and incorporate = knowledge=20 management capabilities that allow firms to integrate information from = different=20 applications, similar to what Lotus Notes has done for larger firms in = the past=20 decade. In addition, with firms adopting Microsoft Vista (to replace = Windows XP)=20 late in 2007, the ability to have =93Google-Like=94 searching both on = the=20 workstation and on the network will evolve.

Web Storage Proliferates
As the cost of managed = storage=20 on the Internet plummets, firms will back up all data to secured web = resources=20 and even offer access via client portals. Today, Xdrive gives away 5GB = of=20 storage to anyone, and JungleDisk charges $41 to store 20GB of data for = one=20 year. Accounting and website vendors will take advantage of these = low-cost=20 storage solutions and incorporate security similar to that used for the = firm=92s=20 online banking to offer managed services that will backup data in real = time and=20 offer secure portals to transfer *.PDFs of documents to and from = clients.

Display Envy Proliferates
With the cost of some = 19=94=20 monitors dropping to $200, firms will standardize their tax production = on three=20 monitors in the year ahead. Auditors will not be left out and will carry = mobile=20 displays for dual monitors in the field using more rugged-ized screens = such as=20 the Shuttle XP17, originally designed for gamers. Please note that = screen=20 response speed will be crucial, and some firms opting for cheaper USB=20 connections will be disappointed while those firms adding video cards = and buying=20 docking stations capable of multiple monitors will thrive with this=20 technology.

Encryption Tools Come Of Age
With concerns about = data=20 security continuing to be a major concern for everyone, encryption = applications=20 will become standard for both hardware and data. All data stored on = laptops or=20 removable media such as USB drives will require passwords and be = automatically=20 encrypted when created. Tools to simplify the administration will evolve = this=20 year, and the cost will be driven down so there will be no excuse not to = use=20 them.

Ubiquitous Internet Access Via Broadband = Cellular
While=20 many tax and accounting firms have onsite Internet access, it is not a=20 guaranteed proposition as networks become more secure and difficult to = connect=20 through to the firm. Today=92s broadband cellular services provide the = largest=20 area of coverage, which allows accounting firms to connect to the = Internet from=20 virtually any place they may work. While the speeds of these connections = are=20 usually between 400Kbps and 700Kbps, with the right remote access =
tools,=20 they can be adequate for accessing firm resources and applications like = e-mail=20 and time and billing. With the next rollout of fourth generation = cellular=20 services, accountants will be able to connect at even faster speeds, = leading to=20 the eventual adoption of =93thin=94 laptops that would have an operating = system but=20 no hard drive, virtually eliminating security risks caused by stolen=20 laptops.

Web Applications Take Over
Firms will move to = web-based=20 applications when they provide comparable functionality at a lower cost = and with=20 a more secure environment, such as what has happened with banking, = payroll,=20 research and forms. In addition to the web-based data storage listed = above,=20 vendors such as CCH, Thomson Creative Solutions and Lacerte will offer = entire=20 accounting =93suites=94 built on .NET capabilities, and externally = managed tax and=20 accounting firm data centers such as Xcentric=92s GrayMatter will take = over=20 maintenance of the firm=92s entire IT infrastructure. With all data and=20 applications centrally managed, firms could utilize the thin laptops = mentioned=20 above. An added benefit of web applications, data and thin laptops would = be that=20 the firm would be protected against virtually any kind of disaster.

------------------------------------------------------= ---

Roman H. Kepczyk, CPA.CITP is president of InfoTech Partners = North=20 America, Inc. and works exclusively with CPA firms to implement = today=92s leading=20 best practices and technologies.

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IT Predictions For 2007 And Beyond =

Column: Technology in=20 Practice

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