Tax Software & Reference Materials
Thank you for your blog and dedication to updating often. I am a subscriber and always look forward to your posts.
I am a young CPA going on my own soon and have a few questions regarding the accounting firm logistics. I read on your blog that you use Intuit Lacerte, QuickBooks, Tax Coach, The Tax Book, and Thompson's QuickFinder.
- I am thinking about going with Drake Software for the tax prep etc. Do you have any knowledge or insight between Lacerte and Drake?
- What products do you purchase from The Tax Book and QuickFinder? Do you purchase the complete package of both each year?
- Do you offer your clients Microsoft Accounting or Peachtree support, or do you strictly work with QuickBooks?
- Are you satisfied with Tax Coach?
With starting out, I am looking at the bottom line costs with these products. However, I understand the value of some products and companies should not be determined by the cost. As the old sang "You get what you pay for."
Thank you for your insight. Please feel free to add anything additional wisdom.
Interesting timing on the Drake Software question. I had just visited their website a few days ago and requested a sample copy of their 2006 program so that I can test it out. It hasn't arrived yet, but I am looking forward to testing it out after the October 15 crunch.
I have been using Lacerte since 1985, so switching is a big step. However, problems with their 2006 programs, as well as huge price increases for 2007, have motivated me to look at alternatives. Reading various articles and message boards, Drake seems to have a good reputation.
Since relocating here to the Ozarks almost 15 years ago, and down-sizing my workload from over 700 clients to about 100, I have stayed with Lacerte. However, after some annoying problems with their customer service people, I did experiment with two other tax programs a number of years back, ATX and Bailey. Both were very big mistakes that I very much hope aren't repeated with Drake. While less expensive in purchase price, both programs were much less sophisticated than Lacerte about adding new forms and schedules automatically when the need arises. I've become very dependent on this; so if Drake doesn't do as well as Lacerte, I will be sticking with Lacerte for another year.
If Drake does look like a good program, two very important additional factors will be how well Drake is able to convert Lacerte data files. Many of my clients have hundreds of deprecation items that would be a pain to have to manually reenter. I am also hoping that Drake will toss in free copies of earlier year programs if I do buy their 2007, so that I can use them for the older returns I still have to do for clients. Their website had no info on this, so I'm assuming I will need to discuss it with a sales rep.
For someone starting out, you don't have the burden of having to convert hundred of clients form one system to another or having to unlearn how one system works and learn a completely different one, so you are in a better position to choose whatever program looks good to you without the entanglements I will have to endure if I choose to change.
Regarding the reference books, I have changed my purchase pattern over the years. Since the mid 1980s, I used to always buy copies of all three QuickFinder books for myself and my staff members. When the QF founders left to start their own company and produce TheTaxBook a few years ago, I bought both of their main books, as well as the three QB books.
Last year, before the 2007 filing season, I bought both TaxBook editions (Deluxe and All States), as well as their CD-ROM. However, I didn't buy any of the physical QF books, opting instead for their online versions, subscribing to all of the titles they offer. This has been very useful for me in my answering of client and blog questions by allowing me to copy and paste very easily. Just last week, I noticed that they had added an online version of their tax Planning for Individuals book, so I subscribed to that.
Until a few years ago, I was doing a lot of speeches and seminars, as well as meeting clients at their locations; so it was very handy to bring copies of the QB books with me. Now, I almost never leave my office, so I can rely more on computerized info. However, I do like the ability and speed of being able to pull out a book and look something up. I do refer to the TaxBooks several times a week, so I am planning to order them all again for the 2008 filing season, along with their CD-ROM, so that can copy & paste info from them.
I haven't used the Tax Coach service as much as I would be if I were accepting new clients. It is ideal and actually designed for showing prospective clients new tax savings techniques. However, I have used it a dozen or so times to produce reports on various topics and I have been extremely impressed with the quality of its information and its presentation format. I am big on time saving tools and am still holding firm in not hiring any employees after freeing myself from that burden in 1993; so a service like Tax Coach is a bargain in being able to whip out a very professional looking report in very little time. Having an employee do the research and typing would cost me a lot more, besides the headaches of having to go back to babysitting employees. Even with the recent price increase from $49 per month to $59, I still see it as a bargain.
Years ago, I tried to keep up with various accounting software, in addition to Quicken and QuickBooks. Now, I simply do not even have enough time to keep up to date on all of the new versions of QuickBooks; so trying to learn anything else, such as the programs from Peachtree or Microsoft, would be impossible. It is also a fact, just as PDF has become the standard format for electronic documents, and Microsoft Word for word processing, QuickBooks has become the most widely standard for small business accounting. It has the largest user base, making it easier to find assistance when hiring bookkeepers, than any other program; so I plan to continue to only support the use of QB. If I had a large staff, I might consider having some of them specialize in the other accounting programs and work with clients using them; but as a one man show, I can only handle one brand.
I hope this helps you with your decisions as to which way to go. I will most likely be posting some comments on the Drake test run to my blog.
Thanks for writing and good luck with your new tax practice.
Kerry,Wow! Thank you for the in-depth insight that you provided. It has given me tools to think about and options to consider.I am going to purchase the Drake pay-per-return option ($285) for the 2007 tax season, which gives me the full-version of all suites. As a financial controller currently, I plan to "moonlight" this tax season and go from there. I do not have any big clients yet, but a few small personal returns and my wife's business return. I did attend a Drake 4-hour seminar about the product and am impressed; however, I do not have the experience of a complex tax returns as you perform. I think Drake is a good company with great values, so they should accommodate your requests to enable you to purchase & I think the conversion should be performed smoothly as they explained in the seminar. I do look forward to your final analysis and opinion after you review the product & will see on your website when you post. Drake also prides itself on the 11-second to answer with a live person when you call, so I would think any questions or negativity you could call to ensure. In addition, if you are not certain after your review, I would find out the 2007 updates, as it seems quit a few enhancements from what was discussed at the seminar. (I am rooting for you to like and convert to Drake because I have heard some negatism about Lacerte of late + the enormous price and price increases).Since I am just starting, I will purchase the Tax Books and CDRom as you suggested. In the future, I will click on your Tax Coach link on your website to sign up.I look forward to your blog entries daily. Keep up the great blogging!
UPDATE – I held off posting this until I had a chance to test drive the Drake program, which I have done. This is what I sent the Drake saleswoman.
I did receive the conversion program that you sent me. Unfortunately, I was not able to get it to work on any 2005 or 2006 Lacerte files. I tried all kinds of variations on the settings and file locations and it wouldn't work.
I did however set up a new 1065 client and input their 2006 info. It seemed to go fine; but I just didn't feel that your program was able to pick up as many things automatically as Lacerte does. A number of years back, I bought the ATX programs and learned the hard way how many things Lacerte did automatically that were manual entries in ATX that I overlooked on more occasions than I was happy with.
I have therefor decided to stick with Lacerte for the 2007 tax year returns, even though I am not happy about their big jump in REP fees.
I do need to say that the decision on which tax prep software to use is very different from the perspective of a longtime user of a competing brand than it would be for someone just starting out with professional software of this kind or who is forced to make a change due to the discontinuation of previously used programs, as has been the case for many tax pros. While in my younger days, I used to make fun of old fogies who resisted change, I find myself in that exact same position. The older I get, the less comfortable I feel in switching from programs I know very well to ones that require a new learning curve.
I hope you understand my situation and I appreciate your assistance in allowing me to test drive the Drake software.
Kerry,I do not understand why the conversion did not work. Maybe next spring we can try it together. As far as calculating info...the only advantage Lacerte has now over Drake is on oil and gas returns. Lacerte does calculate depletion and Drake does not. I hope you will evaluate our program again next year.
I would like to take another look at it before the next filing season. I'm also hoping to hear from any other long time Lacerte users who switched to Drake and who are wiling to share their experiences.
Thanks for the help. Good luck with the coming filing season.