Review of Engagement & Trial Balance Systems — 2006

When looking at workpaper and trial balance applications, you need to focus
on efficiency. Spend time developing the organization structure, processes for
setting up information and review procedures. Then, train firm members extensively
and enforce compliance with the firm’s standards. While it may be necessary
to have different standards for different types of services, tight standardization
will reduce the effort it takes to get new users up to speed, provide more uniform
workpapers from job to job, and reduce the amount of preparer and high-cost
reviewer resources used.

From the trial balance perspective, these applications take account balance
info that is relatively standard in format and present it in the form of financial
statements (again, fairly standardized in format) and tax returns (very standardized).
The key to efficiency is to standardize procedures and end product as much as
possible. Efficiency can also be greatly increased by using the features that
promote uniform workflow and engagement management. Because there are no third-party
imposed standards and very little written about “best practices”
in this area, every firm has a different approach to actually performing the
financial statement/tax return engagement. Accordingly, vendors provide flexible
tools to accommodate the different approaches firms take, but it is important
that firm’s look for ways to standardize engagement and process management
whenever possible.

The following five elements of workpaper/trial balance applications have been
considered in this review:

Ease of Use — In the context of a workpaper application,
ease of use is a very relative term. The work process of performing a financial
or business tax engagement is complex. Many steps, a lot of information, and
multiple team members are involved in the process. The tools required to perform
these types of services in an electronic environment require planning, training
and constant review in order to be used in an effective and efficient manner.

Data Import/Export/Integration — Using detailed information
from a client’s system is a requirement of every financial statement and
tax preparation engagement. If it is easy to do, pulling the data electronically
costs a lot less in resources than having it manually keyed. Additionally, a
package’s features for using this information with other applications,
either through an export process or by directly linking to other systems, has
a lot of value.

Trial Balance Features — Creating, grouping and adjusting
a trial balance is the cornerstone for creation of the financial statement,
tax return and the documents that support these products. Features that make
it easy to create, review and edit the trial balance can make a substantial
difference in efficiency.

Financial Statement Preparation — In many firms, the
creation and formatting of financial statements is almost an art form. The problem
with this is that art has a high cost. Systems that have features that promote
the standardization and preparation of complete high-quality financial statements
offer many firms an opportunity to greatly improve on their current processes
in this area.

Engagement Process/Workflow Features — This is the
big one. Workflow technology is one of the hottest technology areas in today’s
accounting firm. An increased awareness of the benefits and possibilities combined
with the critical resource shortages most firms face has firms thinking about
how to use technology tools to implement or modify existing processes to increase
engagement efficiency. 

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