A guide to buying tax software for accountants

The orientation phase of new tax software for accounting businesses

In the orientation phase, you delve into the tax practice management software market as you prepare an overview of needs, considerations, knockout criteria and themes that play a role in your choice.

When you start the process of looking for new tax accounting software, it can be overwhelming picking through various features and solutions. The easiest way to cut through the noise is to start with your needs and ignore the features.

No solution is the same; every product has its features, expansion options, associated costs, and rates.

So, how do you ensure you get the right solution for your accounting practice?

Accounting practice needs will drive the decision-making

When we make a new purchase, we all want the world, and buying professional tax preparation software can be no different.

You may need to conclude however that not everything can be done. However great your chosen solution is, there will inevitably be moments where certain functionality cannot be implemented for various reasons.

Come to peace with this. It becomes a battle of the best tax solution, not the magic bullet solution.

Ask yourself and write down the following four questions:

1. What improvements and innovations do you need to implement in your accounting firm?
2. What features need to be solved with tax return software?
3. Which process features would provide the most value for your clients?
4. Which developments inside and outside your office, existing systems and processes are factors you want to include?

If you write down the answers to these questions and keep them handy during meetings, you can refer to them after every single discussion you have with software providers.

This may sound obvious, but many businesses fail to keep strict and constantly referenced criteria – allowing distractions to creep in.

Keep it on task

Throughout the entire tax return software buying process ignore everything other than that which is simple, coherent and logical.

What often happens while looking for new tax preparation software is that while searching, people discover more and more possibilities, want more and more and lose sight.

This is why your needs list is all important.

Keeping things simple and purposeful ensures the project stays on task and stops you from being led astray by sales staff, only to be sold features you don’t need for problems you don’t have. Otherwise, your project will become time-consuming and way out of scope.

Keep reminding yourself: what is really going to help you provide a better service for your clients?

Knock out criteria

By now you should have a short list of needs and have actively pushed away any distractions that take away from the simple aim of your project.

The next step is to decide what will be the nail in the coffin for the best tax preparation software.

You’ll need to create a simple list of knockout criteria. These are deal breakers that compliment your needs list and will make the selection process easier.

Some examples include:

• Budgetary concerns
• Lack of integration with other systems, such as data collection
• Perceived lack of product support
• Insufficient alignment with your needs list
• Lacking the functionality your practice requires

Making your tax lodgement software selection

You should now have a list of possible tax solutions and suppliers which may match your requirements. This is where we start to whittle down the contenders, in what we call the selection phase.

Once you have created your list of needs and deal breakers, you can research solutions for your possible suppliers and match them up, now that you have established the criteria of what you're looking for.

When researching on Google, remember that the topmost paid ad will not necessarily be the best fit for your accounting practice. When researching, widen your search by canvasing your network and industry contacts. Ask around. Have a look at the most respected peers in your industry – what do they use? Start there.

Cast your net a bit wider here and bear in mind that scrutinising these options against your criteria will come next – so, make sure your criteria seem satisfied and add them to your list.

Drawing up your tax software shortlist

This next step in the tax software buying process for accounting businesses will usually involve meetings and phone calls with BDM’s and technical staff from providers on your list to hear a proposal on a solution. Here, distractions and sales discussions about unnecessary functionality come into play. Remember to keep on track with your criteria and don't deviate or compromise.

With the knock-out criteria that you were able to prepare during your orientation phase, you can now start whittling down your options.

This starts by cross-checking the functionality. Through this process of elimination, you will arrive at a shortlist of solutions and suppliers worth considering for improving your practice operations.

If a solution does not meet one or more of the knock-out criteria, it should not continue to the next round.

For example, a knockout criterion may be the availability of an integration link with your data collection. Or perhaps the presence of automation that will optimise compliance workflows.

From shortlisting to choosing your tax accounting software

When selecting the best tax and accounting software solution, you must test the capabilities against your requirements and wishes. So, what is a good approach to this?

Accounting businesses can approach this in a structured way by working with a scoring matrix.

You could start this by creating a simple Excel spreadsheet of criteria (needs and deal breakers) against your shortlist of supplier functionality and features.

The next step is to score each solution based on your requirements. Some requirements are probably more important in your choice than others. That is why you apply a personalised weighting factor: 1 for the least important to 5 for the most critical requirements.

This will ensure that you assess all tax software solutions similarly and don’t become distracted by side issues.

The choice is obvious

Well, there you go – what do you have now in front of you?

A range of scores is plotted against your shortlist of solutions, features and tax practice software providers. Tally up that score!

The winner should now be very clear. You are ready to move on to implementing software that will enable fast, efficient tax returns and compliance.

No matter the size of your accounting practice or firm, we have a solution for you

Our tax and compliance software solutions help accountants and tax agents in Australia lodge millions of tax returns every year with peace of mind.

Speak to a specialist today.