2022 CPAFMA Technology Survey Findings

2022 CPAFMA Technology Survey Findings
by Roman H. Kepczyk, CPA.CITP, PAFM

The CPA Firm Management Association recently conducted its fourth comprehensive Information Technology survey tailored specifically to member firms with the goal of identifying the applications, products, and processes utilized by peers.  The survey was conducted in December 2021 to determine what information technology firms would be utilizing in 2022 and compared to the results from previous surveys where appropriate.  This survey further highlighted the unique nature of CPAFMA member firms which tend to be medium and larger-sized firms.  162 CPAFMA members participated, 87% of which had 10 or more personnel and 43% were multi-office.   The findings of the survey included either percentages of respondents or actual numbers of users with the results interpolated as best as possible with the intent of identifying actional trends or recommendations.  The overall findings are summarized below and were presented by CPAFMA Advisory Board Member Roman Kepczyk via Webcast on Thursday, January 13, 2022, which is available on the CPAFMA.org website.

Server Infrastructure:  The 2022 survey was consistent with the 2020 and 2018 surveys where more than half (63%) of responding firms utilize an external cloud provider to host the majority of their applications, which is up from 51% in 2020.  This year’s survey also found the number of firms internally managing their own networks dropped once again significantly to 19% from 38% of respondents in 2020, which highlights the continued trend towards peer firms moving everything towards the cloud.  Amongst the accounting vendor hosts, 13 responding firms utilized CCH Axcess, 7 selected Thomson Reuters Virtual Office, and 4 firms utilized Intuit/Lacerte accounting for 10% of respondents.  This left the majority of participants utilizing “private” and “public” cloud hosting vendors.  Right Networks/Cloud Premier led the private hosting vendors with 89 member firms and Ntiva had two followed by Blackfoot, Flexential, IronMountain, JDL, Quality Technology Services, Sonic.net, Switch, and Veemost, each hosting one member firm. For “public” cloud providers, two firms listed Microsoft Azure with the clear trend that four of five member firms host the majority of applications in the cloud today.

Server Virtualization: Virtualization technology is being utilized extensively within the profession but a significant number of survey respondents (41%) either did not know if they were utilizing it or did not have their internal servers virtualized.  Simply stated, virtualization runs each application in its own “virtual server” providing great stability for accounting applications by minimizing conflicts.  Citrix Xen was the preferred choice of 27% respondents, followed by 21% of firms choosing VMware, and 11% selecting Microsoft Hyper V. While there has been noticeable adoption of VDI (Virtual Desktop Interface) in corporate environments outside of the accounting profession, there were no firms that responded that they were aware they were using VDI which we believe the lack of adoption has much to do with the complexity of the accounting firm IT ecosystem.

Significant Downtime: Another question sought to identify what events caused significant downtime in the previous 12 months, with the number one item being Internet outages which impacted 21 firms.  This was followed by 18 firms that experienced outages by their cloud host (plus three additional outages directly from the software vendor).  Four firms experienced hardware failures (internally managed) and three listed power outages as the cause of significant downtime. Two firms were victims of a ransomware attack and two succumbed to viruses/malware. This highlights the need for redundant Internet connectivity and working with reliable and robust cloud hosting partners.  It also points out that accounting firms continue to be a target for hackers and security should be a priority.

AV/Malware and Spam Management:  BitDefender was the most prevalent anti-virus with 59 firms, followed by Webroot having 11 firms and Sophos with 10. The traditional products such as AVG (4 firms) and Symantec (3 firms) saw a continued reduction in the number of firms using the consumer-targeted products. For Spam Management applications the survey found Mimecast to be the most selected anti-spam application with 53 firms and Microsoft Defender with 14 firms.  This was followed by BitDefender and Barracuda with six firms each and Proofpoint and Sophos having for firms each.  While virus and spam applications have the least amount of consensus on preferred products, they seem to be working reasonably well at protecting member firms as Virus/Malware has stayed at the bottom of the “Reasons for Firm Outages” listing.

Backup Options:  For traditional on-premise data backups, five respondents (3%) still utilized tape backups, and 29 respondents (20%) backed up to hard disks or solid-state drives, which we have seen SSDs (Solid State Drives) to be more reliable and easier to utilize to restore files from than from tape.  The bigger trend of member firms backing data up offsite via Internet-based solutions increased to 76% of respondents compared to 68% in 2020 pointing to web-based backups being the backup standard.  The survey also asked about backup frequency and 86% of respondents backed up daily and 13% weekly. Backups are your firm’s best protection against a ransomware attack, so it is recommended that firms automate this process and utilize cloud backup solutions with data going offsite at least daily.

Workstations: Dell still leads the pack for desktop brands with 67% of respondents making them the first choice followed by 20% by HP and 13% by Lenovo.   For laptop brands, Dell was also on top with 59%, followed with HP (20%) and Lenovo (18%). Within the remaining “other” computers were three firms selecting Microsoft Surface PCs. The most popular laptop configuration continued to be a 15.6” with full keyboard (including a ten-key number pad) at 59% of respondents, followed by 30% of firms buying 17” models as their standard which may be under-reported as four of the “other” firm responses included 17” responses.  In either case, this increased noticeably from the 21% reported in 2020. The survey also asked what computer processors firms were planning on purchasing in the year ahead and 64% selected Intel’s i7 (6% increase over 2020), 22% Intel i5, and 14% Intel’s latest i9 chip (which was a 5% increase from 2020). The survey also identified minimum RAM (Random Access Memory) being implemented in firms with 58% selecting 16Gb, 28% going with 8Gb, and a trending 12% going with more than 16Gb.  While applications operating in the cloud require significantly less RAM and extend the life of those computers a couple of years, the requirements for the Windows Operating System and security applications running locally are expected to increase, which would explain the higher specification responses.

Workstation Software:  Windows 10 has become the standard for accounting firms for the majority of respondents, but 8 firms stated they at least one computer utilizing iOS, which we are assuming is for marketing purposes as most accounting applications and vendors are Microsoft-centric.  For groupware applications, Microsoft Office 365 expanded its dominance with 89% for respondents followed by 10% still utilizing Office 2016 on-premise.  We anticipate features in Office 365 will drive further adoption of the 2016 hold-outs.  In the category of Internet Browsers, Google Chrome became even more dominant with 90% of firms primarily using it followed by 7% Microsoft Edge, and 3% Firefox. For creating and editing PDFs, Adobe is 12/DC is utilized by 61% of respondents followed by 18% using Adobe 11 and 10% on Adobe 2017.  The only other product listed by firms for PDF management was Doc-It with 2%.

End User Access: Two new questions this year dealt with the frequency of password changes and the use of multi-factor authentication.   The majority of firms (87) changed their passwords every 90 days with 10 doing so every 60 days, and 9 doing so at 30-45 days.  Surprisingly 8 firms were semi-annual, 6 were annual and 4 said they never mandated a password change.  In regards to Multi-factor Authentication, Duo was the clear leader with 98 firms, followed by 14 using Microsoft’s Authenticator 10 using Thomson Reuters, and 7 using Google.

Monitors: The survey specifically asked for the standard monitor setup which pointed to 50% of responding firms utilizing triple monitors as the standard.  This was followed by 37% using dual oversize monitors of 20” or more which increased from 27” in 2020.  1% listed quadruple and 1% listed “mega-size” monitors of 34” to 43”.  Not surprisingly the number of firms still using dual-standard monitors of 20” or less reduced from 13% in 2020 to 7% in 2022, highlighting the increased adoption of screen real estate for accounting work.

Tablets: 37 peer firms provided tablets to partners (23% up from 21% in 2020), 8 firms provided them to managers (5%), and five firms provided them to staff, which overall was a slight increase from 2020 which had waffled down from 2018.  The survey found that 20 firms utilized Apple’s iPad followed by 13 respondents utilizing Microsoft Surface tablets and 3 firms selecting Lenovo.  From 2016 to 2018 to 2020 there was a steady decline so the increase in 2022 was surprising, but maybe a response to more automation and remote work egged on by COVID.

Phone System: The survey also identified a continued trend in firms transitioning from traditional on-premise telephone systems towards external VOIP.  In 2018 65% of firms had on-premise systems which dropped to 55% in 2020 and down to 35% in 2022, meaning that two-thirds of responding firms are now on external VOIP systems.  Mitel was the most utilized service (10 firms), followed by Ring Central (7 firms), Comcast (5 firms), Mango (4 firms), and Zoom (4 firms).

Smartphones: The 2022 survey had 58 firms (36%) that provided smartphones to partners, 15 firms (9%) to managers, and 3 firms (2%) provided them to staff.   This was a significant decrease from the 2020 survey that found 83% of respondents providing smartphones to partners, 29% to managers, and 10% to staff, which was an increase from 2018. Consequently, the survey found that 42% of firms provided a stipend which was an increase from 2020 (16%) after a drop from 43% in 2018.  These two questions when combined point to an overall increase in firm provided support for smartphones but may have been skewed by the way the questions were perceived by the respondent.  For smartphone operating systems, Apple’s iPhone was selected 86% of the time with Android phones accounting for the remainder (Apple increased 8% from 74% in 2020).

Scanner Technology: Fujitsu continued to be the top production scanner vendor of choice with 77% of respondents (which increased from 64% in the 2020 IT Survey).  This was once again followed by Canon with 23% of peers selecting them followed by a smattering of Epson, HP, Kyocera, Lexmark, Ricoh, Sharp, Toshiba and Xerox devices. The 2020 survey asked what type of device the majority of scans were produced on and 60% utilized centralized scanning, followed by 33% utilizing individual scanners and 7% distributed/shared devices.  The survey also asked specifically in regards to tax processing where scanning was done and 77% primarily utilized a centralized scanning process.  For tax processing, there was a continued decline in the number of firms utilizing distributed scanners (2022-24% down from 57% in 2020) and in individual scanners (2022-33% down from 51% in 2020).

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, but point out a continued transition towards cloud adoption both for the entire firm and for individual applications. Where a reasonable percentage amount could be ascertained it was included in the text, but for responses that had less participation, the number of respondents were included to identify preference or trends toward adoption of those products.

• Practice Management: CCH Practice Management (77 respondents) continues to be the dominant PM product within member firms by a two to one ratio over Thomson Reuters Practice Management (38 respondents) with the majority (68%) of firms using hosted solutions rather than on-premise.
• Payroll: ADP and Paychex continue to be the most utilized payroll providers within member firms garnering 32% and 22% of respondents respectfully. Intuit was next with 10% of firms followed by 10% of respondents favoring Thomson Reuters Accounting CS or MyPay solutions. Other cloud providers that received multiple responses included Paylocity (5%), Gusto (3%), and Paycore (2%) with 94% of all payroll providers being Cloud-based.
• CPE: Practice Management applications continue to be the tool of choice for CPE Tracking for 45% of respondents (25% CCH, 20% Thomson Reuters) with their dedicated online systems showing a slight increase (5% Thomson Checkpoint Learning, 3% CCH CPE Link). Prolaera a newer entrant into the market space doubled the number of responding firms for 2020 to get to 10% adoption in member firms making it one to watch. Not surprising was that a 13% of firms continued to utilize Excel spreadsheets for tracking CPE internally.
• HR: HR Management continues to be an area where there has not been as much adoption as expected considering the increase in Human Resource Information Systems (HRIS) being integrated within the payroll providers. Only 38% of firms said they utilized an HR Management application. ADP’s HRIS led with 16 users, followed by Bamboo having 13 users and then dropping down to four users with Paylocity’s payroll product.
• Intranet: Microsoft SharePoint continued to be the most dominant intranet tool used by 28 firms (down from 38 in 2020) and WordPress (nine firms) retained the second spot but with a reduced number of respondents. Three firms listed Microsoft Teams, which has many components found in traditional intranets but lacks some organizational capabilities found in SharePoint and WordPress.  However, Microsoft is always expanding capabilities making this a product worth watching.
• CRM Tools: 78 firms stated they had a CRM solution but the majority of those firms listed either CCH or Thomson Practice Management. Hubspot garnered the next spot with five users which points out very limited adoption of CRM tools within CPAFMA respondents.
• Website Maintenance: While more than 60 of respondents maintained their own websites with local providers. CPA Site Solutions led the 2022 survey respondents for website service providers with 20 firms, followed by CCH SiteBuilder utilized by 11 firms, Thomson Web Builder CS utilized by seven firms, and Rootworks utilized by four firms (NOTE: Rootworks is wholly owned subsidiary of Right Networks).
• Internal Accounting: QuickBooks continues to be the dominant accounting product utilized by participating firms with 111 members utilizing either the On-Premise product or Online/Cloud hosted versions. Sage/Peachtree was next with 12 firms followed by Thomson’s ACS with eight firms, Microsoft Dynamics with five firms, and Sage Intacct being utilized by three respondents.
• Website Payment Systems: The number of firms utilizing web-based payment systems has increased noticeably in the past two years. These systems allow clients to pay their invoice directly themselves via credit card without firm administration being involved.  Close to 100 firms had adopted such a system with the top selections being CPACharge (41 firms), QuickFee (19 firms), PayPal (six firms), and Authorize.net, Payzee, and Practice Ignition with two firms each.  Look for increase integration of these systems directly with the leading practice management applications which firms began adopting in 2021.
• Accounts Payable Management: QuickBooks was once again the dominant application used for managing payables by 61 respondents, followed by cloud-based Bill.com with 25 users. The third and fourth most utilized products were Thomson Reuters CS with seven firms and Sage/Peachtree with six firms.  As firm’s adopt CAAS Tech Stacks” we anticipate more firms will adopt integrated solutions.
• Expense Reports: Practice Management was the most often cited application for capturing expense reports with seven firms responding, followed by a few firms that utilized Excel. The top two cloud-based expense products were Expensify (five firms) and Concur (two firms).
• Scheduling: Excel continues to be the dominant tool utilized for scheduling staff with 28 firms reporting they do so. This was followed by 15 firms utilizing XCM (which is now owned by CCH) and 18 firms using Practice Management scheduling components [CCH and Thomson with nine firms each].  ProStaff was utilized by nine-member firms, which placed it in the lead of the dedicated internal products followed by Outlook with six firms.

Groupware: Microsoft continues to be the dominant accounting firm groupware product utilized by 137 of the 139 respondents to the question (with two firms utilizing Gmail).  The 2022 survey found 123 firms using Cloud/Hosted Exchange versus 14 firms still maintaining their own servers.  The trend towards firms dropping their own internally-hosted Exchange servers for the cloud has been very clear since 2016 (2016-79 firms, 2018-39 firms, 2020-33 firms, 2022-14 firms) which firm’s continuing to host their own should question why.

Collaboration/Video Calling:  The rise of collaboration tools due to COVID was evident with the vast majority of firms utilizing Microsoft Teams (98 firms) and/or Zoom (63 firms).   Nine member firms were utilizing Slack, which was an increase from four in 2020 but it cannot be denied that Microsoft Teams has the greatest future potential due to its native integration with Exchange Contacts and Calendar. However, for strictly video calling, Zoom edged out Teams (90 vs. 88 respectfully) as the most selected video calling application.

Document Management (DM): Of the firms that answered the DM question, 39 utilized CCH Document Management and 39 utilized Thomson products (22 GoFileRoom, 13 File Cabinet Solution, 4 ONVIO).  Doc-It continued to hold the next slot with 13 responding firms, followed by 11 firms doing their own management within Windows Explorer.  Intuit/Lacerte also had six users as well as iChannel having four.

Data Visualization: As firms transition more to advisory services the need for data visualization tools increased and the top two products of 2020 repeated in 2022 with Microsoft Power BI (business intelligence) being utilized by 29 firms and Tableau being utilized by two firms, which was similar to previous findings.

Tax Applications: The survey identified that 76% of responding firms had their tax application either hosted in a private cloud or directly with a tax vendor in their cloud application pointing to 24% of member firms still hosting tax locally.  Below we summarize the tax application trends within CPAFMA peer firms.

• Individual/1040 Production: CCH continued to be the dominant 1040 application used by respondents with 76 firms selecting it (including 23 on CCH Access). This was followed by 50 firms utilizing Thomson’s UltraTax, 13 on Lacerte,and five on Thomson’s GoTax RS. 
• Business/Other Returns: Not surprisingly CCH was again dominant in business tax applications with 71 responses (23 on CCH Axcess) followed by Thomson Reuters UltraTax with 48 firms. 13 member firms selected Lacerte and six selected Thomson’s GoTaxRS.
• Tax Bookmarking: With the preponderance of firms using CCH for tax processing, it remained no surprise that CCH Scan was the most dominant bookmarking tool with 55 firms, followed by SurePrep having 18 responses, ten using Thomson Reuters’ Source Document Scanning and 7 utilizing Gruntworx. According to the 2021 CPAFMA Paperless Benchmark survey, 79% of peer firms were utilizing automated tax bookmarking tools.
• Tax Scanning to OCR: The 2021 CPAFMA Paperless Benchmark survey found that 69% of peer firms were utilizing Scan to OCR applications. CCH AutoFlow was utilized by 51 firms, followed by SurePrep with 20 respondents and Thomson ScanFlow and Gruntworx each having four users. 
• Client Data Accumulation: This question was added in the last survey to explore the adoption of client data accumulation applications in lieu of using organizers. CCH’s Collaboration Hub (formerly My1040Data) had 10 users this year followed by TaxCaddy with 8.  Two responses that were not identified in the 2020 survey were six firms using ShareFile and four using SafeSend Organizer which we will be watching in the future.
• Dedicated Workflow: While 16 respondents continued to utilize traditional Practice Management Projects to track tax workflow, the trend towards dedicated tools continued in 2022. The top products that peer firms have transitioned to were CCH’s XCM (29 firms), CCH Workstream (22 firms), Thomson FirmFlow (18) and Doc-It with five users. 
• Tax Research/Forms: Thomson’s RIA Checkpoint continued to be the dominant Tax Research tool utilized by 83 responding firms, followed by 51 firms using CCH Intelliconnect, and 25 using BNA. With 123 firms responding to this question, the numbers point to many firms having duplicate products, which should be evaluated to eliminate redundancy in licensing and training.  For accessing tax forms, there was a tie of 49 respondents each with CCH Forms and Thomson RIA Checkpoint with the latter being on the rise from previous years.  BNA’s SuperForms held the third spot with 15 users.
• Tax Projections: The number of firms responding that they were using a tax planning program increased over 2020 with CCH and BNA both having 42 respondents. This was followed by 28 using Thomson’s UltraTax Planner and 10 utilizing Lacerte.
• Tax Portals: CCH claimed the top spot with 25 users but it was a significant reduction from the previous survey as firms transitioned to other standalone portals. Thomson’s NetClient CS and Citrix ShareFile were next with 23 each and SafeSend appeared with 13 users.
• Tax Secure Email: The leading secure, encrypted email solution for delivery of tax returns was once again Citrix ShareFile with 68 firm respondents selecting it. This was followed by 34 cPaperless SafeSend respondents which was a noticeable increase from the 2020 survey. The survey also identified 11 firms utilizing CCH’s Share Safe and 10 firms using Mimecast.
• Digital Signatures: COVID promoted the use of digital signature tools and the survey identified that many firms used a combination of products with cPaperless SafeSign having 42 users followed by RightSignature with 32, DocuSign with 29, and Adobe with 15. Both the major tax software vendors lost ground from 2020 with CCH reporting 8 users and Thomson 5.
• W2/1099 Preparation: Payroll forms preparation was a new question added in 2022 with 1099Etc. having 29 users, Greatland Yearli-20 Users and CFS Tax Tools, and Thomson ACS having 11 each. A few products that were new to the tax survey include W2 Mate (5 users), Track 1099 (4 users), and 1099Pro (3 users).

Audit and Accounting Applications: The survey also asked questions specifically in regards to 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 72 firms. 24 firms utilized either Thomson’s web-based AdvanceFlow or Engagement CS product, followed by 15 member firms utilizing CaseWare, with both Thomson and CaseWare making headway over the past two years.
• Audit Analytics: ProfitCents was utilized by 15 survey respondents which were the highest amongst all products followed by RMA with six firms and CCH TeamMate Analytics with two firms. We had expected the rollout of artificial intelligence (AI) and big data analytics tools being integrated into accounting products having a stronger impact on the adoption of this type of products, but it appears that these are not yet mature enough to foster adoption.
• Data Extraction: Excel continues to be the dominant tool being utilized for data extraction with 36 firms responding in the affirmative and another 4 using ActiveData which is an Excel plug-in. This was followed by 13 firms selecting IDEA and 2 selecting ACL which have long been the industry standard for high-end audit practices.  While being touted by digital audit pundits for more than a decade, the majority of this year’s respondents (36 of 62) continued to utilize Excel manually for data extraction.  Of interest was the next tier of users where 5 firms selected CCH TeamMate Analytics which did both extraction and analytics.
• Client Accounting: QuickBooks continues to be the dominant client accounting product utilized by CPAFMA survey respondents but for the first time the number of firms supporting the online version (76) bypassed the number of desktop (71) users.  Thomson Reuters ACS product was next with 19 firms followed by Sage with 18, which coincides with other industry survey findings.
• Client Payroll: QuickBooks was once again the dominant application firms utilized for producing client payrolls with 55 respondents selecting the application. ADP again took the second spot with 30 firms, 22 utilized Thomson Reuters ACS and MyPay solutions, followed by seven with Paychex.
• Depreciation: Thomson Reuters Fixed Asset CS continued being the most selected product with 62 firms followed by CCH Fixed Assets with 49 firms. Sage FAS and Lacerte Fixed Asset were next with six firms each followed by four each for AssetKeeper and BNA FAS.
• CAAS TECH Stack: One of the new questions added this year asked: Does your firm have a standard CAAS (Client Accounting and Advisory Services) technology stack, which identified 20% saying YES, and 80% not having one. Another new question asked what applications does the firm use for CAAS Services and Bill.com was by far the most popular with 31 firms, followed by 15 firms using QuickBooks. ADP was the most popular CAAS payroll product with 11 users.  Other payroll providers included Gusto, Fathom and Sage Intacct each with four firms, followed by 3 utilizing Dext, and two firms each for Avalara, AutoEntry, Expensify, and Qvinci.
• Working Remotely: Citrix was utilized by 89 firms (73% of respondents to this question) followed by 32 firms (27%) utilizing Microsoft Windows Terminal Server/RDS for remote access. The remainder of firms either did not have a remote access tool or utilized VPN or another of the remote support tools which were split into a separate question in 2018.
• Remote Access Support: For providing remote support to clients, Microsoft Teams was a new entrant this year, taking the top spot with 56 firms. 25 respondents selected LogMeIn, 17 firms utilized TeamViewer.  GoToMyPC/Assist and Halo/Kasaya garnered 15 firms each followed by eight firms utilizing Join.me and five firms with another new entrant: Splashtop.

IT Governance: The majority of peer firms (61%) utilized a technology budget that was reviewed at least annually.  Surprisingly, only 40% had a designated IT Committee.  Of those that did have a committee, 145 met quarterly, 11 met Annually or Semi-annually and 7 meet monthly, as well as 7 meeting weekly.

IT Training Resources: The survey once again had respondents list the best training resources 13 firms selecting CPAFMA and AICPA ENGAGE.  This was followed next by the two major accounting application vendors (12-CCH User Conference, 11-Thomson Reuters Synergy) and then by the consulting groups (4 Boomer Technology Circles, 3 Right Networks Webinars). 

Cloud Future: The survey’s final question asked when the respondent believed that the majority of CPA firms will run entirely in the cloud with no local servers.  Just over one-third (35%) estimated it would happen between 3 and five years, another 26% thought it would be between five and ten years and 7% believed it would take 10 years or longer.  32% estimated that it would be less than three years, which we would agree with by quoting Bill Gates when he was Microsoft’s CEO:

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.  Don’t let yourself be lulled into inaction! “

Roman H. Kepczyk, CPA.CITP is the Director of Firm Technology Strategy for Right Networks and works exclusively with CPA firms to implement today’s leading best practices and technologies incorporating Lean Six Sigma methodologies to optimize firm production workflows. Roman is a CPAFMA Advisory Board Member and been consistently listed as one of Accounting Today’s Top 100 Most Influential People in Accounting, INSIDE Public Accounting’s Most Recommended Consultants, and CPA Practice Advisors Top Thought Leaders to the profession.