2016 CPAFMA Technology Survey Review and Results

Published April 22, 2016

The CPA Firm Management Association recently conducted its first comprehensive technology survey tailored specifically to member firms with the goal of identifying the applications, products and processes utilized by peers.  Where possible, the survey attempted to identify which applications firms are moving to in the cloud compared to traditionally on-premise managed solutions.  The survey was conducted in January 2016, with 140 members participating, 90% of which had between 11 and 149 personnel and almost half being multi-office.   The findings of the survey are summarized below and were presented by CPAFMA Advisory Board Member Roman Kepczyk via MAPCast on Friday, February 26, 2016. For a copy of the podcast, click here.

Server Infrastructure: 77% of respondent firms still manage their own servers, and while 71% have servers located in their own firm office, 6% have chosen to move them to a co-location facility which offers more robust security, power and Internet bandwidth (with providers including ViaWest, IO, Barracuda).  18% of the firms transitioned to hosted cloud providers (15 to Xcentric, three to IV Desk and one each to Nuvodia, Cloud9, VNet, Cetrom, and Welcome Networks.  The survey found 5% of participant firms using their accounting vendor cloud solutions with five on Thomson Reuters Virtual Office and two on CCH’s Axcess cloud.  

Server Virtualization: Virtualization was a very strong trend with 72% of the firms adopting this technology which simply stated, runs each application in its own “virtual server” providing great stability for accounting applications by minimizing conflicts.  VMware was the preferred choice of 45% of respondents, followed by 17% of firms choosing Citrix Xen, and 10% selecting Microsoft Hyper V. Interestingly, with all the hype surrounding VDI (Virtual Desktops), none of the CPAFMA respondents had implemented this solution.

Network Utilities: The technology survey also identified various systems and maintenance applications utilized by peers:

  • Antivirus/Malware: 17 firms (15% of respondents) stated they had been impacted by a virus, malware or ransomware that caused significant downtime in the past twelve months. The two top antivirus solutions utilized in firms were MacAfee (32 firms) and Symantec (29), followed by ESET (8), AVG (7), TrendMicro (7), Vipre (4) and Barracuda (3) with roughly one-third of respondents opting for the cloud-based products which are trending.
  • Backup Options: While 12% of respondents still utilized tape backups, 48% backed up to hard disks, which we have seen to be more reliable and easier to restore files when needed.  Half of member firms backed data up offsite via Internet-based solutions.
  • Data Backup/Archival Solutions: Member firms are using a wide variety of data backup applications with no one product garnering any significant lead.  This is evidenced by the top ten products; Datto (8 firms), VMware Veeam (7), Dell AppAssure (6), Acronis (5), Symantec/Veritas BackupExec (4), Mozy (3), EVault( 2), Carbonite (2), Arcserve (2), and ShadowProtect (2).

Workstations: Dell still leads the pack for desktop brands with 62% of respondents making them the first choice followed 23% by HP and 9% by Lenovo.  Studies done in the past pointed to a 26% reduction in the total cost of workstation ownership when firms standardized on one primary model.  For laptop brands, Dell (58%), HP (20%), and Lenovo (17%) continued to be the major brands.  The most popular laptop configuration was a 15” with full keyboard including a full ten key pad at 59% of respondents followed by 25% of firms buying 17” models as their standard, compared to only 11% selecting the smaller and lighter 14”-15” laptops without an integrated ten key.

Workstation Software:  It comes as no surprise that Microsoft Windows is the dominant operating system (with no responding firms standardizing on Apple iOS).  Windows 7 was the standard in 86 firms (75%) followed by 16 firms using Windows 8.x and 12 listing Windows 10.  The survey also found that more than one third of the respondents already had or were planning on transitioning to Windows 10 in 2016.  68% of CPAFMA respondents utilized Internet Explorer as their browser followed by 26% utilizing Google Chrome and 3% using Mozilla FireFox.  Microsoft Office 2010 was the dominant version of Office with 59 respondents (51%) followed by 45 firms on Office 2013 (39%) and seven firms on Office 2007 (6%).  Four firms had transitioned to Office 2016, which we anticipate will begin the transition of Microsoft software to more annual subscription based pricing.  Adobe continues to be the dominant PDF program with 59 firms (53%) standardizing on Adobe 11 followed by 31 firms (27%) using Adobe 10.  Seventeen firms (15%) had transitioned to Adobe 12/DC, which we expect the five firms that were still utilizing Adobe 9 will have to transition to this year.

Monitors: The survey specifically asked for the standard tax desktop setup which pointed to 54% (61 firms) utilizing Triple monitors as the standard.  This was followed by 22% (25 firms) using Dual Oversize monitors greater than 20” and 19% (22 firms) using Dual Standard monitors less than 20”.

Tablets: 34% of peer firm provided tablets to all partners and 10% provided them to all managers, but only 3% provided them to all staff.  The survey found that two out of three tablets purchased were Apple iPads with the remaining third being Android (Dell, Samsung, Motorola) and Windows (Microsoft Surface) variations.

Smartphones: 60% of peer firms provided all partners and 24% provided managers with Smartphones, with the majority (79%) being Apple iPhones and the remainder being Android (Primarily Samsung Galaxy) smartphones.  44% of firms provided a stipend which varied greatly between firms.

Scanner Technology: Fujitsu was the vendor of choice for 57% of respondents for their production scanners followed by 28% of peers selecting Canon.  The survey found that 75% of respondents (84 firms) had implemented centralized scanning and 74 of these firms estimated they scanned 70% or more of all documents in administration.  69 member firms had also implemented distributed/shared scanners and 62 had rolled out some individual scanners, but less than half of these firms (27 firms) estimated that 50% or more of the scanning was done on these units.

CPA Practice Applications: Below we summarize the administrative applications which CPAFMA peer firms utilize to run their internal operations.  The number of firms selecting either on-premise or cloud applications have been identified where possible.

  • Practice Management: 86 firms (52% of respondents) utilized CCH’s Practice Management of which 14 were in the cloud either privately or through their Axcess Suite. Thomson Reuters had 43 peer firms using their Practice CS application, of which 15 firms were in the cloud or hosted in Thomson’s Virtual Office. OfficeTools also made a good showing as it was selected by 23 firms, evenly dispersed across the spectrum of firm sizes. 
  • Payroll: For producing firm payroll, 35 firms utilized Paychex, followed by ADP (23 firms) and Intuit (12 Online and 4 QuickBooks internal).  Seven firms utilized Thomson’s Accounting CS and two utilized their MyPay solutions.
  • CPE: Practice Management applications are also the tool of choice for CPE Tracking with 42 firms utilizing CCH and 33 utilizing Thomson Reuters’ tools (of which 23 utilized Thomson Learning/Virtual Office and 10 used their on-premise Practice CS.  Not surprising was that a significant number of firms (25) continued to utilize Excel spreadsheets for tracking CPE. 
  • HR: HR Management is another area where there was a wide variety of applications with no one product being dominant.  ADP’s HRIS was used by nine firms, followed by Bamboo with six firms, and then Halogen, Paychex, and Paylocity each had three firms. Fifteen other products were utilized by peer firms.
  • Intranet: Microsoft SharePoint was the most dominant tool used by firms (27 firms) for intranet development followed by WordPress (five firms).  Our consulting with CPAs has found that many firms still utilize an administrative drive or their document management application which was not reflected in the survey question.
  • CRM Tools: Practice Management was the most dominant tool utilized for Customer Relationship Management with 58 firms using CCH and nine using Thomson Reuters, followed by 15 other distinct applications.
  • Website Maintenance: While a large number of respondents maintained their own websites with local providers, CCH Sitebuilder led the survey respondents with 12 firms, followed by CPA Site Solutions (four firms) and WordPress and Thomson Web Builder CS utilized by two firms each.
  • Internal Accounting: On Premise QuickBooks continues to be the dominant accounting product utilized by firms with 66 firms, followed by Sage/MAS with nine firms and Thomson CS with seven firms.  The number of firms utilizing cloud providers for running their internal accounting was centered around QuickBooks Online/RightNetworks at 16 firms and Intacct with five.
  • Accounts Payable Management: QuickBooks was also the primary tool used for managing payables with 59 on premise users and 14 in the cloud, followed by cloud-based Bill.com with 11 respondents.  The second and third most prevalent products were Sage/MAS with nine firms and Thomson Reuters CS with four firms.
  • Expense Reports: 15 firms utilized their Practice Management application for inputting expense reports which is a recommended practice with time entry.  Surprisingly, only nine firms stated they utilized cloud based expense products [Tallie (4 firms), Expensify (2), Concur (2) and Bill.com (1)].
  • Scheduling: Excel continues to be the dominant tool utilized for scheduling staff with 23 firms reporting they do so.   This was followed by firms using Practice Management scheduling components [CCH (22) and Thomson (4)] or Outlook (four firms primarily between 11 and 24 members).  ProStaff was utilized by 16 member firms which placed it at the top of the dedicated internal products and XCM Schedule was the most utilized cloud application with 11 firms using it.

Email/Groupware: Microsoft continues to be the dominant Groupware product utilized by 79 firms internally and by 37 firms that have transitioned to cloud based versions.  In our consulting, this is one of the primary applications that firms transition to the cloud when they consider the cost of building and maintaining their own servers.   Interestingly, four peer firms have moved their groupware to Google’s platform.  The survey also asked about the standard mailbox size that was allocated to users and found it fairly equally distributed: 23 Firms allowed 1Gb or less, 25 firms allowed between 1Gb and 5Gb, 16 firms allocated 5Gb, and 42 firms allocated more than 5Gb, which we see being due to Microsoft’s hosted Exchange providing 50Gb to start.

Collaboration/Instant Messaging: Microsoft’s Skype for Business (formerly Lync and Office Communicator) was the dominant application in this space with 28 member firms using it (15-cloud, 13-on-premise).  There were also thirteen firms using IM through their phones with the most prevalent being ShoreTel (5 firms) and Mitel MiCollab (3 firms). Three of the four Google groupware users from the previous question also utilized Google Plus for their Instant Messaging.

Video Calling: 55 peer firms were using video calling with Microsoft Skype for Business/Lync again being the dominant product (22-cloud, 21 on-premise responses). Firms with dedicated video conferencing products listed LifeSize (4 firms), Zoom (2), Mitel (2), Vidyo (2) and five firms utilized GoToMeetings video calling capability.

Document Management: DM products were utilized by 97 firms with on-premise tools being more prevalent.  CCH Document led the charts with 25 firms followed by five firms using Thomson File Cabinet and a variety of other local products: iChannel (3 firms), CCH Engagement (3), CaseWare (2), Lacerte DMS (2), eFileCabinet (2), and Laserfiche (2).  For Cloud based products, Thomson’s GoFileRoom led with 20 firms, followed by Acct1st utilized by three CPAFMA peers.

Portal/Secure Delivery Solutions: The top three portal solutions listed by respondents were CCH (39), Thomson (17) and iChannel (3), which we honestly expected to be higher if not for the number of firms using secured email tools.  ShareFile garnered the top spot for delivery of secure email with 47 firms using it followed by LeapFile (5 firms) and CPA Safe Send (3 firms).

Tax Applications: This survey was combined with the previous SaaS/Cloud survey with the specific intent of identifying which applications are moving to the cloud as there have long been tax, document management portal and research tools available.  Below we summarize the tax applications utilized with CPAFMA peer firms.

  • Individual/1040 Production: CCH was the dominant tool used by respondents with 81 firms selecting it (including 20 in the cloud).  This was followed by 24 firms Thomson’s UltraTax (of which 8 were in the cloud) and their cloud-based GoTax RS (3 firms).  Nine member firms utilized Lacerte with one being cloud-hosted, which it could not be determined if this was a private cloud or Intuit’s Tax Online, which utilizes the Lacerte tax engine.
  • Business/Other Returns: Not surprisingly CCH was dominant in this space with 82 firms (21 Cloud/Axcess) followed by Thomson Reuters UltraTax with 24 firms (of which seven were in the cloud).  Six member firms selected Lacerte and three utilized Thomson’s GoTax RS in the cloud.
  • Tax Bookmarking: With the preponderance of firms selecting CCH for tax production it was no surprise the CCH FxScan was the most dominant bookmarking tool (55 firms), followed by Thomson Reuters’ Source Document Scanning being utilized in eight peers.  Three other tools utilized were SurePrep (6 firms), Tic Tie & Calculate (3), and Gruntworx (2).
  • Tax Scanning to OCR: The majority of firms utilizing bookmarking were also using automatic input into the tax return, which was led by 46 CCH firms using AutoFlow.  This was followed by seven firms that outsourced to SurePrep, and five to Thomson’s GFR/SDS Products.
  • Dedicated Workflow: While many firms traditionally utilized Practice Management Projects to track tax workflow, there has been a trend towards dedicated tools.  The top three products that peer firms have transitioned to were XCM (23 firms), Thomson FirmFlow (22) and CCH Workstream (9), which is an area we see a strong trend towards firms adopting in the next few years.
  • Tax Research/Forms: Thomson’s RIA Checkpoint was the dominant Research tool utilized by 79 peer firms, followed by 49 firms using CCH Intelliconnect, and 32 using BNA.  With only 109 firms responding to this question, the numbers point to many firms having duplicate products, which should be evaluated to eliminate redundancy.  For accessing tax forms, 55 respondents utilized CCH while 35 utilized RIA, and 24 had BNA’s SuperForm product.

Audit and Accounting Applications: The.  The survey also targeted assurance services to identify adoption of the following applications and utilities:

  • Audit Binder: The dominant engagement binder application utilized by firms was CCH Engagement with 74 firms.  Within these CCH respondents 14 firms stated they hosted their binder in the cloud, which would point to firms hosting their networks with Citrix or Windows Terminal Server as this is not anticipated to be part of the CCH Axcess suite for another two years.  Sixteen firms utilized Caseware (with five also cloud hosted) and Thomson’s Engagement was utilized by 13 member firms, with one utilizing their new cloud-based AdvanceFlow application which is part of Thomson’s web-based audit suite.
  • Data Extraction: While being touted by digital audit pundits for the past decade, only 20 firms utilized IDEA for data extraction (with only two utilizing the competitive ACL product). The vast majority of peer firms (50 responses) listed Excel as their data extraction tool and fifteen firms had transitioned to the ActiveData Excel add-on which appears to be the rising star.
  • Client Payroll: While 20 firms outsourced payroll to ADP, 17 to QuickBooks Online, and four to Paychex, the majority still produced internal payroll primarily with QuickBooks (40 firms) and Thomson’s CS/MyPay products (22 firms).
  • Depreciation: CCH Fixed Assets was selected by 53  firms followed by 36 utilizing Thomson’s Fixed Asset CS. Interestingly, eight CCH firms stated their depreciation was cloud-based, which would point to them being hosted by a third party, whereas Thomson had eleven firms using cloud based depreciation, which could be either hosted by a third party or their own Virtual Office. The other three products mentioned by peers were BNA FAS (10 firms) and AssetKeeper (7).
  • Remote Access Tools: Microsoft Windows Terminal Server/RDS was utilized by 51 firms (47% of respondents) followed by 42 firms (40%) utilizing Citrix for remote access.  The remainder of firms either did not have a remote access tool or utilized VPN, GoToMyPC, or LogMeIn. The survey found that only four firms had more than 80% of their employees telecommute one day per week or more.  Eleven firms estimated between a quarter and half of their staff worked remotely at least one day per week, and 25 firms stated that between 5%-25% telecommuted weekly, pointing to this being a distinct recruiting advantage to those firms that allow it.

IT Governance: The vast majority of peer firms (95 firms representing 83% of respondents) utilized a technology budget that was reviewed at least annually.  Surprisingly, only 54% (61 firms) had a designated IT Committee.  Of those that did have an IT Committee, 39% met monthly, 31% met quarterly, 22% annually/as needed and 8% met at least every other week.

IT Training Resources: The final technology survey question had respondents list the best training resources with the most firms selecting the accounting vendor user conferences: CCH (31 firms), Thomson Reuters (10), Xcentric (6), Sleeter (3), XCM (2).  This was followed by 16 firms listing the CPAFMA National Symposium and/or Technology Fly-in and the AICPA TECH/Practitioners Symposium.

Roman H. Kepczyk, CPA.CITP, AAAPM is the Director of Consulting for Xcentric, LLC and works exclusively with accounting firms to implement today’s leading best practices and technologies incorporating Lean Six Sigma methodologies to optimize firm production workflows. Roman is also the author of “Quantum of Paperless: A Partner’s Guide to Accounting Firm Optimization” which includes the results of the 2015 CPAFMA Paperless Benchmark Survey.