2010 Executive Predictions & Year in Review

From the Dec. 2009 Issue

What We Learned in 2009 and What’s in Store for the Future

In every profession and walk of life, there are those who identify trends
and prepare for coming changes ahead of the masses. As a result, these forward
thinkers enjoy the competitive advantages that come with recognizing future
trends and the potential effects on their businesses. When it comes to technology
implementation, early adopters are also quicker to realize the benefits delivered
by those new technologies.

Determining which trends are simply fads and which offer true benefits to
your firm is a major challenge faced by tax and accounting professionals. Over
the past few years, major innovations have been presented to these professionals,
and while some have approached these new options with skepticism, others have
embraced the technologies.

WHAT WE SAW IN 2009, AND WHAT TO EXPECT FOR 2010

• Many new changes to tax law as a part of the February stimulus act, including
  enhanced first-time home buyer credits, changes to Sec. 179 expense provisions,
  and expanded bonus depreciation.

• Major new updates to tax and accounting programs, including redesigned
  components of the Thomson Reuters CS Suite, the introduction of Intuit’s
  new ProLine web-based professional tax compliance system, and the unveiling
  of CCH’s Next Generation ProSystem fx Suite.

• Growth for some vendors, including BQE, which made acquisitions and expanded
  it’s offices in the U.S., Australia and the U.K. And the demise of the Microsoft
  Office Accounting system.

• Enactment of a bill that, starting in January 2011 (for TY 2010), will
  require e-filing for any preparer who “expects” to file 10 or more
  individual, estate and trust returns.

In addition to these specific tax law changes and the new and enhanced professional
products, many more trends continued their course, including the movement toward
web-based/SaaS professional applications, the popularity of client portals for
collaboration and file transfer, the promise of cloud computing, and the increased
adoption of technologies that optimize workflow in professional practices through
streamlined management capabilities and OCR-empowered scanning utilities for
organizing tax engagement documents and automated data entry into compliance
systems.

Workflow optimization will continue to be the driving force in new technology
development for many years to come because the concept involves virtually every
aspect of professional client service and practice management. Simply put, workflow
optimization is about working smarter, not harder, by implementing technologies
that help users adapt to changing environments. The paperless movement was more
than a precursor to the need for optimization; it was, at least in part, a cause
for this need. As firms dramatically changed how they dealt with client information,
it became necessary to find better methods of utilization and internal control.

Professional practices will also continue to move closer to a cloud computing
reality. With increasing adoption of web-based services and programs, you
are already doing so, even if you don’t recognize it as a progression
toward the “cloud.” As an example, over the past 15 years, we’ve
seen the transition of tax research move from book-based libraries, to CD libraries,
to installed programs, to totally web-based. Most accountants are comfortable
with that information not being “stored” in their office. Similarly,
the past few years has seen increasing adoption of online data backup systems,
with professionals trusting well-known vendors to securely store their sensitive
client information.

With the corresponding adoption of web-based professional programs for accounting,
tax preparation, payroll and other key practice services, professionals are
also showing a willingness to trust their client data to these trusted technology
vendors. The benefits of using hosted applications have been made clear: Decreased
IT costs and management of the technologies and anytime/anywhere access to the
data, allowing professionals to work from anywhere and be more responsive even
in an increasingly mobile world. Technology experts also agree that even sensitive
client data is safer when hosted by a secure data facility run by a trusted
vendor. Likewise, the use of client portals for collaboration and file sharing
is a sign of an increasing demand for secure modes of data transfer.

The result, eventually, will be that nearly every program run by an
accounting practice will be a hosted application, and the data they
use will also be securely hosted. That is, essentially, the definition of a
cloud-based computing environment. We won’t get there next year, but the
transition is underway.

WHAT ELSE CAN WE EXPECT?
Becoming a technology visionary isn’t a matter of simply deciding to be
one, but rather the product of years, even decades, of good, bad and indifferent
experiences. Just as wisdom acknowledges the value of incorrect decisions in
the overall learning process, failures can also be valuable to better understanding
a challenge and realizing success in the future.

The real visionaries and forward thinkers are professionals who’ve successfully
adapted new technologies in their practices and the technology experts who develop
those innovative technologies, putting their own time, effort, money and names
on the line to help tax and accounting professionals be more productive and
profitable in their practices. In the following pages, several of these technology
leaders offer their views on what the current year has taught us and what we
can expect in the near future.

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Click on one of these accounting technology leaders to see their
assessment of the past year, and also what they see for the future.