eCPAn presentation of Outsourcing & XCM workflow
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eCPAn presentation of Outsourcing & XCM workflow
- 1. Outsourcing tax preparation – a growth model for small firms Joseph P. Manzelli Jr. CPA.CITP Coordinator of Outsourced Workflow Doubletree Suites Phoenix, AZ July 17, 2013
- 2. Agenda • Background – Joe Manzelli – XCM Solutions & Xpitax LLC • The Tax Process – How can it be Optimized • Workflow what is it? • Outsourcing as a Tool • Demo of XCM software
- 3. History of XCM / Xpitax • Founded in 2001 as an outsourcing company by accountants for accountants • Pioneer in the outsourcing model (tax & bookkeeping) • Unique in Industry – Own Dedicated Facility in India – Only Patent Holder in the Outsourced Space – XCM – Automated Workflow Process
- 4. History (cont’d) • Growth to 25 US Employees & 125 employees in India • 500+ accounting firms & 28,000 XCM users • Prepare 15,000 to 18,000 returns for firms – Over 28,000 in 2007 (Section 7216 came along)
- 5. • Doing More With Less – Economy – Fee Pressures – Increased Regulation – Condensed Tax Season – Rapidly Changing Technology Our Industry Today
- 6. • Efficiency • Redundancy • Transparency • Accountability • Consistency • Timely Communication Common Pains
- 7. Tax Process • Collect source documents • Scan? Copy? • Prepare – data entry • Questions – missing information • Review • Collate & send • E*file
- 8. American Institute of CPAs Manual Process
- 9. American Institute of CPAs Scan tax return and source documents Store in DMS Refined Process
- 10. American Institute of CPAs Prepare Return Electronic List of Missing Information Optimized Process
- 11. What is workflow? Process standardization & automation Knowledge management Accountability Individual work management Resource management Team collaboration Compliance & QC Ease-of-use/Scalability Implementation & training System, integration Cost
- 12. Process Automation Pre-defined statuses that can be turned on and off Custom statuses Linear and horizontal processes Workflow mapping Quality control alerts Manage re-occurring activities Manage bulk processes Automatic project creation/Roll forward
- 13. Knowledge Management Robust reporting – standard & custom Exception and bottle neck reports Project-related files and details Easily searchable and actionable data Questions, review points, instructions Automated archiving and purging Annual comparisons
- 14. Accountability Staff development Status details on a particular project View all WIP, or specific workload Firm-defined user rights
- 15. Individual Work Management Virtual desktop Ability to organize, assign difficulty and priority Support scheduling/work assignment Assign individual or group roles, skills and expertise Time summary support
- 16. Resource Management Move responsibility within team Cross-team collaboration Support question/review cycle Real-time workload balancing Integrated scheduling Budgeting support
- 17. Compliance and Quality Control Full tracking capabilities Full due date management capabilities Customizable sign-offs Quality control checks and exception alerts Extension tracking E-File process management Customizable checklists Support for data retention policies
- 18. Ease-of-Use/Scalability Intuitive interface Logical design Small learning curve Adaptable to current process and anticipated future needs Flexible and scalable – roll out to additional users, processes, departments, offices Balance between built and build
- 19. Implementation & Training Complexity of infrastructure deployment and administration Customary implementation time IT involvement Training – basic and intermediary Ongoing training and best use opportunities Flexible training options Dedicated support resources Feature upgrades/enhancements Vendor reputation
- 20. System Considerations Vendor’s reputation Easy maintenance Remote user support & mobile access Multi-office support Firm-wide system Document storage integration Practice management integration
- 21. Cost Base product pricing Length of contract Availability and price of optional capabilities Administrative costs Training costs Potential impact on head count/overtime Potential impact on user productivity and departmental efficiency
- 22. Available Products • OfficeToolsPro • SharePoint • Thomson FirmFlow • CCH Workstream • XCM Workflow
- 23. Outsourcing - Driving Factors
- 24. Benefits of Outsourcing • Staffing Resource – Year round access to unlimited resources • Improve Quality and Consistency • Standardize & Automate the Process • Grow Practice Without Increasing Overhead • Improve Client Service – Increase Turnaround Time • Improve Quality of Life • Increased Profitability
- 25. Xpitax Teams • Tax & Bookkeeping Compliance Officers (US Based) • India Dedicated Team - Supervisor: 5-7 years, C.A. - Preparers : 1-2 year graduate
- 27. Benefits – Enhanced Client Service Outsourcing = Time for New Opportunities Consulting Niche Building Specialization Higher Value Services
- 28. Benefit – Client Loyalty Number of Services 10 Year Retention Rate 1 12% 2 24% 3 63% 4 81% 5 98% Source: Allan Koltin Presentation
- 29. What to Outsource Data Intensive Tasks Individual returns Corporate Returns, Partnership and Fiduciary Returns Bookkeeping Services Write-Up Services Accounts Payable/Receivable Financial Analysis Reports Workpaper & Financial Statement Conversions and Rollovers
- 30. What to Retain High-Value, High-Touch Client Service New Business Consulting Strategic Forecasting & Budgeting Business Valuations Tax Planning Corporate Financing Business Succession Estate Planning Wealth Management/Financial Advising
- 31. Issues & Obstacles • Security • Loss of control over return • Taking away jobs • Quality/Training – India background • Perception / Client Reaction
- 32. Security - Privacy • Data never leaves U.S. • Secure buildings in India • Printing / scanning not allowed • Utilize access of accounting firm’s software & network
- 33. Demo of XCM in action We will utilize a live demo site & see XCM in action. I can provide screen shots to anyone who desires them. I will have this presentation up on Slideshare. All Information on how to get screen shots or this presentation will be provided at our conclusion.
- 34. © 2014 Xpitax Effective November 1, 2013 2014 Xpitax Pricing Outsourced Tax Returns – Xpitax has a multi-tiered pricing schedule based upon complexity of returns. Service Tier 1 Tier 2 Tier 3 Tier 4 Individual $63.00 1 – 12 pages $142.00 13 – 60 pages $194.00 61 – 125 pages Add $53.00 Each add. 50 pages Corporate, S-Corp & Partnership $100.00 1 – 25 accounts $142.00 26 – 50 accounts $194.00 51 – 100 accounts Add $53.00 Each add. 50 accounts Fiduciary $63.00 1 – 12 pages $142.00 13 – 60 pages $194.00 61 – 125 pages Add $53.00 Each add. 50 pages Bookmarking $13.00 1 – 50 pages $23.00 51 – 100 pages $32.00 101 - 150 pages Add. $5.00 Each add. 50 pages 990 Tax Exempt $184 all returns 1) Prices for individual and fiduciary returns are based upon the total number # of scanned pages submitted with the tax data file (i.e. organizer and original documents). Scanned documents must be actual size of original document. 2) Xpitax has a minimum annual service fee of $7,500. 4) Xpitax will quote the price of returns which do not fall within any of the pricing categories noted above. 5) Schedule D - as a default policy – Xpitax does not input transaction details (input the Summary Data). There is a surcharge for inputting detail as follows: first 10 transactions – no additional cost, 11 to 100 Transactions – surcharge assessed equal to next task tier, each additional 100 Transactions – surcharge assessed equal to next task tier. 6) Business tax returns - we require that firms provide us with an adjusted trial balance. If the M-1 adjustments are not easily identifiable on the Adjusted Trial balance, we also require a schedule detailing specific items that impact taxable income. 7) This Xpitax Pricing schedule is based upon firms providing us with a rolled over tax data file. For those clients that need to be keyed from scratch (i.e. new client to firm, data isn’t currently in your tax software) there will he a surcharge assessed to the next task tier. However we will key the prior year return, so that it can be rolled over, at no charge within the months of May – January. Domestic Pricing: Pricing for domestic tax returns during the period from January to April 15th is equal to two time (2x) the offshore pricing noted above.
- 35. © 2014 Xpitax Effective November 1, 2013 2014 Xpitax Pricing Outsourced Tax Returns – Xpitax has a multi-tiered pricing schedule based upon complexity of returns. Service Tier 1 Tier 2 Tier 3 Tier 4 Individual $63.00 1 – 12 pages $142.00 13 – 60 pages $194.00 61 – 125 pages Add $53.00 Each add. 50 pages Corporate, S-Corp & Partnership $100.00 1 – 25 accounts $142.00 26 – 50 accounts $194.00 51 – 100 accounts Add $53.00 Each add. 50 accounts Fiduciary $63.00 1 – 12 pages $142.00 13 – 60 pages $194.00 61 – 125 pages Add $53.00 Each add. 50 pages Bookmarking $13.00 1 – 50 pages $23.00 51 – 100 pages $32.00 101 - 150 pages Add. $5.00 Each add. 50 pages 990 Tax Exempt $184 all returns XCM and XCM Outsource License Fee •There is no cost for firms submitting returns or other engagements/projects for processing through “XCM Outsource.” •There is a $375.00 per user fee for use of “XCM.” XCM provides custom home pages for each person in your firm and allows use of product for tasks/returns processed internally. Training and Consulting Services •On-line Tutorial – Free •Web-based Training - $800/annually for up to 5 sessions •Web-based Firm Specific Training - $750/per session •Live On-Site Training - $2,500 per day plus out-of pocket expenses
- 36. Questions? Joe Manzelli Joe.Manzelli@xcmsolutions.com Twitter - @joemanz www.slideshare.net/joemanz13 781-519-9317 639 Granite Street Braintree, MA 02184
Notas do Editor
- When you think of the tax process, there are some common pain points.
- This is a typical manual tax process. You’re wasting time and money throughout the process. You’re wasting significant resources when you drive out errors at the end of the process at the highest billable hours (8 clicks).
- Many firms begin investing in paperless technologies like a scanner and document management system, and expect to realize significant efficiencies in doing so. [click] Though both will help you get to a “less paper” office – eliminating paper file storage, making source documents and other work papers easier to search for. In this scenario you’re recovering a little time at the end of the process. What a lot of firms struggle with is – how do you work digitally, so you’re scanning on the front end.The missing piece of the equation is a tool that drives the digital workflow. How do you know who has what work if there’s no pile of files? Excel tracking sheets are old by the time they’re updated. Moving responsibility through email is ineffective and inefficient. And, if you’re still passing around a paper routing sheet, then you’re not really working digitally. You still need to call out of your office or circulate a blast email to find out whose working on a return when the client calls for a status update.
- An optimized process that uses workflow and document automation tools empowers you to maximize the productivity gains working digitally affords. The steps in the process are not significantly different than what you do today, but by scanning on the front end and working digitally you’re saving time at each interval. Saving several minutes in each step for every staffer on every return your firm will touch next tax season adds up to significant savings – that can have a real bottom line impact.
- Workflow automation is widely touted as its benefits have become better understood by the profession. I just want to be clear as to what I’m referring to – I’m not talking about process automation in your tax or engagement software or how documents are routed, stored or purged. What I’m referring to is software designed specifically to automate the steps your firm uses to complete a specific client deliverable – like a tax return, financial report, monthly accounting work or even new employee orientation.These are the key components by which you should evaluate a workflow automation system. They will all be important to varying degrees to your organization. The weight you place on each will determine which solution will work best for your organization. At its core, workflow automation does just that – automates the flow of work in your organization. Think of how a basic 1040 moves through your firm…do you pass a paper routing sheet? Send email messages? Update a tracking system? Or a combination of these things? At what points in your current process do things get more challenging or the process has potential of breaking? At its core, that’s the challenge you’re trying to solve.
- So, let’s start at the heart of the matter – it’s the process. Not a piece of the process, but how your firm works. To efficiently deliver a consistently, high quality product, your firm needs to have one way to prepare a 1040 or a financial statement. Can there be exceptions? Of course, but by definition they should be just that – the exception to the rule.Having one partner ask staff to handle all his returns one way and another manage all her returns another will result in confusion and broken processes. We’ve all lived that. [short anecdote of pitfall?]So what should you look for from a workflow automation system?You should evaluate its merits based on how much you need to build vs. what’s available out-of-the-box. In my experience, a system works best when it’s not DIY (who has time for that), but it’s flexible enough to accommodate your firm’s specific needs. Can it accommodate all areas of the firm’s processes? Some of your processes are not linear where you complete one step then move it forward (or backward) to another step; some may have several action items that must be assigned and completed simultaneously by different people…or maybe even different departments.To ensure standardization, is it possible to pre-establish a particular project type’s process, then prohibit or advise users who try to deviate from that process? Similarly, is it possible to prevent actions that run counter to your firm’s QC process. For example, you wouldn’t want a return with open points to be inadvertently marked complete.If you do a lot of regular accounting or bookkeeping work, can the system help you manage re-occurring projects easily?How does the software handle bulk processes? – think extensions and e-filing.And, how easy is it to set up a new project for the next fiscal year when the current project is completed? How does the software handle that – how easy is it? Seems like a small thing but if you have several thousand or tens of thousands of tax clients that’s no small feat.[One capability your firm couldn’t do without? Something that differentiates XCM without mentioning it by name]
- Because the work is being digitally routed through your process, the workflow system should also automatically capture essential details associated with the completion of that job – things like who has a project, when did they get it, how long did they have it, what did they do with it? And, other bits of data that anyone who works on that project may need – are there client instructions? Any anomalies or nuances the staff should know about that project? Were there questions or discussions along the way between members of the team working on it? Where were those threads captured? If you store those bits in spreadsheets, email correspondence, or stickies, then your process will suffer for it – from both an efficiency (it takes time to find and/or update that info) and effectiveness (something could slip through the cracks).At minimum, a workflow system should automatically capture tracking information and have some type of reporting mechanism. Some may require that you purchase and learn additional reporting software – like Crystal Reports – to dynamically build the types of reports you’re looking for, but you shouldn’t need to do that and for most firms that will be overkill. There should also be a place to store the unstructured data that lives in email and on sticky notes, whether it be instructions from the client, questions among team members, notes on updated files, or anything that you will need access to in order to finish that job.[One capability your firm couldn’t do without? Something that differentiates XCM without mentioning it by name – examples…Annual Comparison Reports, how easy it is to customize and save any report parameters you want.]
- You might be wondering what the connection is between workflow and accountability, well the latter is directly tied to the path of the project and how long it took to get there. If you have at your fingertips, who had something, when did they get it, how long did they have it and what did they do with it, you’re able to see 1.) how productive that person really is, and more importantly, 2.) where there may be a need for some additional training, which is a big advantage particularly with junior staff members for reviews, temporary or contract staff.An essential element for the workflow system is not just the ability to view this level of detail, but to also control who is able to view this level of detail. It can be very useful and constructive if used appropriately, but also destructive if accessible to everyone.
- A key benefit of a workflow automation system (or really any software tool your firm adopts) is whether it empowers the user to improve his or her function… does it deliver greater control, make them more productive, more effective? I would say your workflow system should do all of those things at the individual user level, whether that user is admin, staff, manager, or partner. How each person uses it will vary according to his or her role, but it should provide the same advantages to all users – empowering them to work better.How does it do that? It should feature a place where the individual can see his/her virtual desktop – what’s on my plate right now? Helpful, though not necessarily essential to all firms, is also the ability for the user (or his/her manager) to help organize that work by assigning priorities, difficulty levels, budgeted hours, etc. Another essential element is for the workflow system to support scheduling or the assignment of work – based on availability, anticipated availability, skill-levels, and roles.[Specific feature you can’t live without.]
- In addition to helping the individual manage his/her work day, workflow must also facilitate team collaboration and, by capturing process information, it can also empower resource management. By that I mean sharing work, workload balancing, supporting your scheduling and budgeting functions. The goal is to improve overall productivity - and resource management, in this case – human resources, is an essential element necessary to do so.If you’re looking for a system to address process issues within a specific department or practice area, then you might only need the ability to move responsibility within the team – the ability to pass the work along to the next person within your process. However, if you’re looking for a whole firm solution, a big advantage is the ability to collaborate across teams. Think about it, how much easier would it be for the tax department if they could see the status of their client’s audit engagement? Again, the extent to which you already have a seamless, streamlined process in place for scheduling will determine whether supporting scheduling by simply showing capacity will be sufficient. Or, if your current system of status meetings and scheduling spreadsheets is a major source of pain, you might want to look for a workflow system that fills the scheduling gap.
- Let’s face it, compliance is the name of the game. The compliance work may not be our favorite part of this job, but it pays the bills. Meeting deadlines and maintaining high quality isn’t a nice-to-have, it’s an essential function of our client service. Doing so effectively and efficiently, however, will help us improve profit margins on that compliance work so that we’re delivering the quality our clients expect of us, but taking less time to do it.To that end, the first two items here – full tracking and due date management capabilities – are essential for any firm. The ability to also have firm-defined due dates, internal delivery dates, and flexibility in customizing the system are also very useful and I would say are also essential for firms that want to automate more than just basic processes. Most firms will also need an effective way to manage and track both the extension process and the e-filing process. Some of the more robust workflow systems will also include the ability to turn on and off checks and balances – like not being able to move a file to complete with open items, exception alerts, required sign-offs, and automated data retention/purge capabilities according to your firm’s policies. You can also add checklists as a means of ensuring that specific items are done within a certain step.[Example of something here your firm couldn’t live without.]
- For some firms, ease-of-use will trump almost all of the more advanced functionality that we’ve discussed so far. Because it doesn’t matter how many data-packed reports you can produce or how much time mapping your workflows will save you, if your users think it’s too complicated they won’t use it. Often times, I hear from firms that the cultural resistance to change is the biggest obstacle to moving forward. I tell them – don’t change everything all at once, then. When you evaluate systems, look for a product that you can start using quickly – mirroring your current way of doing things. Just moving to a digital workflow is going to make your life instantly easier. Get acclimated, then adapt your processes and take advantage of the more advanced tools the software offers. I would caution against adopting the most basic workflow product you can find just so it’s easy to use, however….that’s where the scalability comes in. By scalable, I don’t just mean that you can add users or clients easily, but that you can change your processes and continue to refine what I call “better practices” vs. best practices. Process improvement should be a continuous cycle, not a huge initiative you undergo once. The software should support that easily.Some of the things to look for – does it make sense? Are things easy to find? Will it support your current process easily? Can you adapt it easily later without re-learning or re-importing information? What’s the learning curve like? And then how flexible is it – will it be difficult to add users, projects or even whole practice areas later? Does it offer a good balance between out-of-the box functionality so all your users can immediately use and see value and the flexibility to customize it to your firm’s unique needs…that’s what I mean when I say built versus what you have to build. You should be able to use it as it is, but have the ability to tailor it if you want.
- Complex systems can take significant time and resources to implement and train. Think about your timing needs when you start to evaluate systems. Some products can take as little as a few days and some may take significantly longer depending on the complexity of the set-up. Getting a feel for the implementation and training time up front during the evaluation process can help you make a decision, but it can also help you set expectations internally which will ultimately help your project go smoother. Some factors to consider include the infrastructure required to deploy and administer the system. This is a big consideration if you’re looking at using a tool like Sharepoint to build your own system. You may need to consider long-term development and maintenance resources if you go that route. Average implementation and training times, training options – is it one-size fits all or can you tailor training to suit your firm’s needs? What is support like? Are there customer forums or ongoing training opportunities? Most importantly, talk to current clients – what’s the vendor’s reputation? Choosing a solution with a lot of happy users may be worth a higher price tag than a system that only has a handful of client references to choose from.
- Availability, performance and the ability to manage all your processes from a single platform are critical components for most firms. Here, again, the vendor’s reputation among current clients will tell you about the system’s security and uptime. Other factors, particularly depending on your firm’s IT resources, are maintenance – how often do they release enhancements and what’s required to upgrade? Does the software support remote users? Can you access the system from a mobile device? Does your firm have a multi-office environment? How’s that handled? Is the vendor’s reputation as a tax workflow system or can you automate other practice areas? What products does it integrate with that you would want to have integrated?
- Last, but certainly not least for most of us – how much does the system cost? I would caution against simply looking at the cost of a user license, as often the intangibles will widely vary from vendor to vendor. You’ll want to take into consideration all that’s known – software licenses, training, support, infrastructure updates and/or hardware, as well as ongoing maintenance – both in terms of the vendor’s cost and internal resources required for updates, maintenance, enhancements, etc. I wouldn’t advise creating intricate spreadsheets to try to create an apples to apples comparison, but just evaluate the big factors that will impact cost and compare it to the relative value you anticipate getting in return. Sometimes, the most costly system to implement can yield the greatest value to your firm over the long run making it a better choice when all variables are considered. If you know that cost will be a big factor at your firm, then it may pay to do a little extra homework in this area – talk to colleagues using the system to see if they realized measurable benefits like overtime reduction, new business growth, improved client satisfaction.Don’t get too caught up analyzing every facet that may have cost implications though because there’s also an opportunity cost associated with not doing anything. Workflow will save you time and it will improve your overall effectiveness, and chances are your competition across town or across the state or wherever is already moving to an efficient digital workflow.
- So, what are my options? This is not an exhaustive list by any means, but these are the products most commonly talked about when we talk about workflow automation systems for the accounting profession. Bear in mind, this list does not include other types of software that claim to have workflow functionality – that’s not what we’re talking about today, and the two are not mutually exclusive.You can find information on each of these vendors online – not only on their own web sites, but also in the accounting media which has focused on workflow much more in the last few years. Some of these solutions have been around in our profession for years – notably XCM and FirmFlow, others are better known in other markets like OpenText or for other capabilities like practice management – OfficeToolsPro. CCH’s entrance into this product category is relatively new with Workstream, however the company has had a long standing – and continuing – relationship with XCM, as the latter integrates with a couple of CCH’s Profx products.Each product has its own strengths and reputation. You might want to evaluate all of them, or perhaps you’ll eliminate a couple based on price, complexity or their reputation among firms like yours. If a product has hundreds of small firm customers, but you really want to know how many 100-person firms are using it, then that might not be worth your time. Conversely, if you outsource your IT function, then a build-your-own model might not be worth exploring.