Technology is an invaluable tool in the tax practice.

• Author: Cameron, Debra A.

In today's competitive business environment, it is essential for a tax practice to continually improve the efficiency of its operations. The constant battle with fee pressure and with the management and dissemination of information available to solve client problems may be won through the effective use of computers. The technology available provides an essential means of managing the data required under a complex tax system, as well as an efficient way to manage data for client billings, due dates, tax law and accounting procedures, and to market and monitor a firm's performance.

Today, most firms have integrated their computers with networks. Although this step is expensive, it saves countless hours in software and data file maintenance. The integration of application software creates an efficient business environment in which many of the daily stumbling blocks found in a tax practice will be more readily solved. For example, with proper planning, a firm can, in a short time, simplify the process when a client's address changes. instead of changing the address in four separate application software programs (billing package, database, tax processing software and word processing), the address will be changed once and updated automatically in each application. Research on a client's tax issues can be cut and pasted from a CD-ROM or online library into a letter to the client outlining appropriate alternatives. Artificial intelligence can assist in walking through issues, such as the appropriate form of doing business, to provide clients with the best possible answers in the most cost-effective manner. Tax processing software will monitor due dates and track the flow of work through the office. At the same time, it will track client time and integrate it into a time and billing system. General ledger and trial balance software can import data directly into return processing software. These advances save labor and produce a better quality product.

All of these applications and integrations require investment dollars. Expansion of computer usage is an expensive...