An Accidental Discovery

Dave Wyle, father of “the product formerly known as ePace” (now
CCH’s ProSystem fx Engagement), formed California-based SurePrep
and began developing SurePrep Express and its DreamWorkpapers. Meanwhile, 3,000
miles to the east, Mark Albrecht and his Boston-based Xpitax group was busy
developing XCM Workflow. Both vendors had visions of their “processes”
being the conduit to hundreds of thousands of returns being processed in India.
Along came the 2004 Presidential election, and suddenly “outsourcing”
wasn’t about process and cost control. It was about patriotism! California
passed what can only be termed “punitive” legislation demanding
a firm have affirmative permission from every client before “outsourcing.”
The move to India stopped dead in its tracks. But over the next few years an
interesting thing happened as the profession began to notice those new tools
– SurePrep Express, XCM and a few others. While unequivocally turning
its back on “outsourcing,” the profession began to pick up those
new workflow tools saying, “We can use these to better our process regardless
of WHERE we accomplish keypunch.” And the vendors listened and quickly
adapted what had been an “outsourcing tool” to be a “workflow
tool.”

Now, just a few years later, these tools are maturing and being joined by
CCH’s ProSystem fx Scan, Thomson GoFileRoom’s TaxFlow and
ScanFlow, and Doc-It’s forms recognition system. These products are pushing
the bounds of both technology and the profession’s ability (read: willingness)
to quickly adapt business practices to take advantage of available technology.
Many advanced firms today are employing workflow tools that convert a completely
unorganized set of client documents – literally a “bag of crap”
(description borrowed from the words forming the acronym-named product BOCDIP
that was recently purchased by CCH and renamed ProSystem fx Scan) –
into an organized and bookmarked *.PDF file, ready for the tax return preparation
process. Now, SurePrep Express 1040Scan PDF has moved even further, pairing
scan and organize with OCR and forms recognition. The result is an astonishing
70 percent “fill rate” as the process examines each document and,
when identified, pulls the actual numbers and automatically and correctly (no
transposition errors here, folks!) drops them onto the tax return. Now that’s
OUTSOURCING! Well, technically, I guess it’s not really “outsourcing,”
but rather “right-sourcing.” In either case, it accomplishes what
the profession is seeking: eliminating high-cost professional time spent performing
tasks easily done by other, lower-cost people … or machines … or
maybe … not done at all.

Not done at all, you ask? Today, Thomson, CCH and Intuit (and hopefully others!)
are working on “zero data entry” systems. Consider that virtually
all the keypunch we’ve been seeking to eliminate consists of converting
physical data (a number on a piece of paper) to a digital format and that virtually
all of that paper-based data was digital in the first place. The problem we
should be solving is how to eliminate the process that converts perfectly good
digital data to paper and then requires our profession to convert it back! The
truly foresighted are working on just that, and someday – not soon, but
someday– we’ll have “zero-data entry” processes. [Remember
LaFollette’s second rule of computing: Practitioners always overestimate
what can be accomplished in one year and underestimate what can be accomplished
in five.]

Intuit’s TurboTax provides a glimpse at what someday “might be.”
Using the TurboTax program, an individual (remember TurboTax is designed essentially
for self-preparation) can provide certain identifying credentials and then automatically
“fetch” data from various sites via the Internet. For example, if
your W-2 was prepared by ADP, you can have it directly downloaded, digital data
to digital data with no physical paper involved, into your tax program. That’s
the Holy Grail for professional tax preparation! Can you even imagine the time
savings of harvesting all available digital data for several hundred or even
a thousand clients, all at one time? It’s not outsourcing or even right-sourcing;
it’s “zero data entry.” Intuit executives speak reverently
of their company’s strong relationship with thousands of banks and brokerages
and of their deep experience in moving sensitive financial data in the Quicken
world. It’s obvious they know what to do and how to do it. They just need
to get the rest of the world to follow suit.

Jon Baron, Executive Vice President, Professional Accounting Markets, Thomson
Tax & Accounting, and President and CEO of Thomson Creative Solutions, sees
OCR and its techno-sister, barcoding, as valuable and necessary. But he refers
to them as “transitional technologies” and describes his company’s
“end-game” as an eventual solution of private portals in which taxpayers
will “collect” their data electronically and “deliver”
it to their tax preparer in that same form. To illustrate, Baron explained the
Creative Solution CS implementation of barcoding on K-1s (introduced last year)
and W-2s (recently released). Thomson has been instrumental in developing these
barcode standards, and Baron says they will “share the standards with
any vendor” to assist in driving the adoption of the technology. He adds
that, in the end, technology will give way to his end plan – zero data
entry.

Accounting technology veteran visionary Jeff Gramlich, VP of Business Development
at CCH, touts his company’s GainsKeeper product as an example of limited
data entry. Firms using GainsKeeper can avoid virtually all keypunch normally
associated with Schedule D.

CCH, Intuit and Thomson all have designs on solving the real problem and moving
us, someday, to “zero data entry.” Wyle and Albrecht provide great
solutions today, albeit temporarily, to the keypunch problem and will no doubt
again be at the forefront with new solutions whenever “tomorrow”
arrives.

Whatever the solution, however the problem is solved, you can be sure that
the tax compliance business will be very different five or 10 years from now.
The best and brightest are working diligently, and the race has begun!

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Mr. LaFollette is Executive Editor of The CPA Technology Advisor. He was
a Tax & Technology partner in a large local firm for 23 years, and VP of
Product Strategy for a major tax and accounting software developer for five
years. He is the President and CEO of Accounting Technology Resource Network,
LLC and can be reached at greg.lafollette@cygnuspub.com.
He also publishes the tax and accounting blog at www.TheTechGap.com.