Six Reasons Tax Software Sucks

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With all the change, tragedy, and frustration 2020 has brought, it also has the distinction of the longest tax season in American history. Most CPAs are used to the annual rhythm of deadlines that allow for us to enjoy our summers, but this year’s tax season overshadowed summer holidays and kept us on edge far longer than we ever thought possible. By the time we hit the big deadline on July 15th, we had only a few weeks to catch our collective breath before jumping into the fall extension deadlines.

In the wake of October 15th’s final significant tax deadline of 2020, we have one thing to say: tax software sucks.

Why? The industry-leading platforms used by the majority of accounting firms are built on antiquated technology, and they’re holding us back. Here’s a breakdown of everything that’s wrong with tax software.

  1. We’re locked in our office. Cloud computing has reached the point where it consistently outperforms the majority of in-house servers. Unfortunately, the big tax software providers haven’t yet reached the point of being able to deploy on the cloud, which is keeping accounting firms in the slow and frustrating past. A 2019 INAP survey found that network performance is the number one reason companies are moving their infrastructure from in-house servers to the cloud. In addition to slower performance in the office, accounting firms that want to offer any sort of flexible work arrangements (which, in the time of COVID, is suddenly all of them) need to use a virtual server—an even slower, more cumbersome process. When will our tax software allow us to make the jump to cloud computing and free up untold hours waiting for data to load?
  1. Tech support can’t support us. Because our tax software lives on our in-house server, tech support can’t really dig in when we have problems. Sure, they can run us through the standard troubleshooting processes (Did you try rebooting?), but they can’t see problems the way they could in a cloud environment. Let’s be real: nobody has time for endless troubleshooting on a quiet day at the office, let alone on deadline day.
  1. Tax software is a closed system. Unlike the growing legion of other business software applications that allow integrations with a seemingly endless variety of apps and plug-ins, tax software keeps its ports tightly closed. From a data security perspective, this arrangement made a lot of sense at the time these platforms were developed. It goes without saying that clients’ tax data is among the more sensitive information that hackers target—right up there with medical records and credit reports. However, the speed of change has brought dramatic changes to the data security world, and keeping out malicious actors is no longer a valid excuse for maintaining a closed system.
  1. Extra modules don’t work well. Tax software developers have tried to address the closed system concerns by offering additional features that CPA firms need in their tech stack, in the form of new modules. These modules tend to have two problems: first, they don’t integrate well with the older parts of the software. When your platform is located on individual servers instead of in the cloud, it’s that much more challenging to push out updates that allow for new modules to plug in seamlessly. The second problem is that they were designed by tax software developers. The CRM is a good example of this. In theory, a tax-centric CRM sounds like an accounting firm’s dream. In practice, it fails at some of the most basic features and functions offered by cloud-based CRMs. Want to capture leads from your website? Sorry, you’ll have to manually key in that information. Want to segment your clients by industry and send an email blast to a select group? You’ll have to export a spreadsheet and upload it to your email platform. These manual processes add up in time spent and inevitable mistakes made.
  1. Growth is a battle. Upgrading your package to accommodate your growing accounting firm is a difficult and expensive process. First, a lot depends upon how the platform was set up. Maybe the firm started with just a few CPAs but has grown to a full team of multiple partners and support staff. Chances are the CPA who initially configured the system wasn’t aware of the complex needs a larger team would someday expect the software to fill—yet that CPA needed to have projected those needs from day one. Even small firms that have multiple individuals touching a tax return require reporting features that track who has completed certain steps and what remains to be done. These types of reports are difficult to generate when the platform wasn’t configured to track such tasks in the first place. Second, adding users and features can multiply costs exponentially, while also increasing the propensity for glitches as new modules attempt to connect with an aging mothership.
  1. Accountants are trapped. Due to all of the aforementioned reasons, migrating from one tax platform to another is a colossal effort that few small firms have the resources or desire to take on. Most of us continue to make do from tax season to tax season with a clunky software that doesn’t really meet our needs, but it allows us to get by.

Listen, it’s not all bad. Tax software performs a lot of complex tasks that do save us time and prevent mistakes. It also securely holds our clients’ sensitive data and keeps everybody in compliance. By reputation, accountants tend to be slow to change, and most have gotten so used to their tax software that they barely see the problems. When you sit back and reflect on what could be, it becomes clear that many of the common problems with most tax platforms could be remedied by a cloud-based application. The sticking point: the developers need to create a seamless transition for firms, or they’ll keep living with the way they’ve always done things.

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Shelly Lingor
Shelly Lingor is a Partner at GunnChamberlain, P.L., a Jacksonville, FL-based boutique accounting firm that prides itself on using technology and community relationships to help clients accomplish their goals and grow their businesses. She is the Director of GCT Technology & Accounting, the division that offers virtual accounting services as the clear path to growth, not just for the firm, but also for its clients. By bringing their business books online and collaborating with an accountant in real time, clients are able to gain critical business insights, make smart decisions on the fly, and find sustainable ways to grow their businesses—all without losing the human touch that has been the hallmark of GunnChamberlain’s client service. Shelly has 25 years of experience in the accounting industry. Her long-standing passion for the growing field of cloud accounting tech has led to regular speaking engagements at industry events. She also serves as Treasurer on the board for Women’s Business Owners of Northeast Florida and the Crosswater Community Church finance committee. You can connect with Shelly on LinkedIn and learn more at gctaccounting.com.