Tax accountants love to grumble about their tax software, telling war stories about how they survived software bugs, tardy arrivals of updates and state editions and occasional erroneous IRS code interpretations. As this in-depth survey of tax preparers shows, most CPAs really dont hate their tax software; in fact, they generally give their brands high marks.
Thats not to say theyre unaware of their products shortcomings. Unlike years past, they show more willingness to switch brands. (For more on the survey and the problems associated with brand switching, see The Business of Tax Software.) Our survey showed that 33% of those who switched brands last year made the move because they were either dissatisfied with their old brands or simply found ones they liked better; another 30% of the switchers gave other reasons, but many of those switched because their vendors either had gone out of business or had stopped supporting the products.
The Business of Tax Software
THE HIGHEST RATING
We also surveyed the products users are abandoning and embracing. ProSystem fx, the Windows program from CCH, is the brand likely to experience the least turnoverwith only 0.8% of its users saying they planned to move to another brand (see exhibit 1). Likewise, its the brand favored by most (24.5%) who planned a switch but didnt currently use ProSystem fx. The second most popular brand attracting new users was Lacerte for Windows (15.1%).
And although 13.8% of users of ProSystem fx for DOS planned to switch to another program next year, the DOS product gained the reviewers highest overall approval rating (4.6 out of a possible 5) with its Windows version running a close second with 4.4. (For details of those ratings, see exhibit 2). In examining the data, we were initially surprised that a DOS product outscored a Windows versionalbeit the gap was small. We concluded that the DOS users, although not large in number, are extremely loyal to their products and are very resistant to upgrading to Windows.
The product with the lowest overall rating was Arthur Andersens APlusTaxa brand that was discontinued after last tax season. Its Windows version received the third lowest rating (3.7), slightly ahead of GoSystem for Windows (3.6).
All of the programs caused at least one problem last tax season that reviewers said was the softwares fault (see exhibit 3). The brand that generated the most grumbling was APlusTax for Windows33.3% of the users reported problems. Lacerte for Windows generated the least17.1%.
In addition, the reviewers reported that only three of the programs handled all the tax law changes correctlytwo Windows programs, Lacerte and ProSeries, and UltraTax for DOS. The brands garnering the most reports of new law errors were APlusTax for DOS (15.8%) and Pencil Pushers for DOS (8.7%).
Another measure of a programs friendliness and accuracy is the number of times a user needs to call technical support for assistance. APlusTax for Windows triggered the most calls (see exhibit 5). ProSeries for Windows generated the least.
This year, the National Association of Tax Practitioners (NATP) conducted its own survey, assessing its members level of satisfaction with the tax products they use. Youll note, as shown in exhibit 6, that the 17 products which received the highest number of responses in its survey are not exactly the same as in our survey. Yet, as shown in exhibit 8, there is an astonishing similarity in the overall satisfaction ratings between the products that are common to both surveys.
SELECTING A BRAND
Readers often use the material in articles like this as an aid in buying softwareand surely the experiences and recommendations of professional colleagues can be an effective guide. Some of our ratings (see especially exhibit 2) should provide much useful information for making a decision. Another guide for whether a package fits your firm is in exhibit 7, in which reviewers profiled their firms and listed the software packages they used. You can use this information as a negative guidein other words, rather than select a package because most firms your size use it, consider rejecting packages when firms with profiles similar to yours dont use a package.
But relying exclusively on what amounts to recommendationseven though the recommendations are from a large group of experienced tax practitionersalso carries with it a danger: Software that works well for one tax practitioner may not be right for another.
The bestand some say the only effectiveway to make a buying decision is to put the software through its paces. In other words, try it. Tax software vendors are willingeven eagerto send you evaluation copies of their prior-year products. By checking the profiles in exhibit 6 and the responses to the reviews, you should be able to come up with two or three candidates
Resist the temptation to skip this hands-on test. If you limit your assessment to survey results, you will be jumping on a bandwagon, but the band may not be playing your tune or even going your way.
MARSHALL ROMNEY, CPA, PhD, CFE, is an accounting and information
systems professor at Brigham Young University, Provo, Utah.
BRIAN SPILKER, CPA, PhD, and RON WORSHAM, CPA, PhD, are assistant professors specializing in taxation at the same university.
STANLEY ZAROWIN is a senior editor on the Journal.
Mr. Zarowin is an employee of the American Institute of CPAs and his views, as expressed in this article, do not necessarily reflect the views of the AICPA. Official positions are determined through certain specific committee procedures, due process and deliberation.