10 Technologies Worth Investing In (December Edition)

By James Stork
Senior Vice President, Drake Software 

Conventional wisdom holds that tax preparation and accounting firms should begin their quest for new technologies in August. The Firm has completed the first rounds of federal and state tax seasons, taken a breather, updated their plans. They are now ready to assess new and updated technologies that can drive performance in the coming year. 

Additionally, it’s the time to assess the previous year’s tax software – enroll in tax software update courses, take CPE courses, make the rounds of trade shows to assess new features and talk to the Drake sales representatives about what is being enhanced. 

While this schedule gives the firm adequate time to evaluate new hardware and software for the coming tax season, it presents a paradox in terms of pricing. The best bargains in technology are generally found after Thanksgiving of each year, as retailers and vendors of off-the-shelf solutions compete with one another in the run-up to Christmas. 

It is important to keep an eye on what the firm should invest in, with only six weeks before the crush of a new tax season. In my years with Drake Software, I have seen tax and accounting firms do this last-minute technology investing well, and others not so well. I have my own ideas on this topic, but have also drawn on the expertise of our in-house Drake Software IT Department to flesh out our recommendations. 

The list is heavily oriented toward hardware and procedures, for good reason. By now you have installed and worked with your new tax and accounting software. It is stable, the staff is trained, and it would be counter-intuitive to introduce major new software products into the system at this point. There are two exceptions to this rule – an upgrade from Windows XP and an upgrade of the anti-virus system. 

That said, here is a list of the top 10 technologies worth investing in at the beginning of December: 

1. Upgrade to Windows 7
In any other year, it might seem foolhardy to upgrade the operating systems of your computers with only a few weeks left. But two factors over-ride this judgment. First, Windows 7 is not radically new, unstable or untried. Released in 2009, it is now the most widely used operating system in the world, having overtaken Windows XP in 2012. Second, and more critical, is the fact that Microsoft support for Windows XP will end on April 8 – in the critical last week of tax season. Have a problem with XP in the final week of tax season and the firm will be on its own. Same thing goes for Office 2003, if the firm relies on that – upgrade to at least Office 2010. For the time being, upgrades to Windows 8.1 is not recommended until after the coming tax season – just because of the learning curve involved. 

2. Upgrade your Anti-Virus
For home use, the free Windows Security Essentials or Microsoft Defender will do fine, but for the office something more robust is recommended. With new viruses being invented every day, this should be a critical investment that involves both hardware and software. Firewalls should be installed and be active, security protocols (such as no personal email on office computers) rigidly enforced, and anti-virus files updated at least once each day. There are a number of reliable products on the market, but Cisco Systems and Barracuda are considered market leaders. 

3. Upgrade Computers as Needed
Computers that are more than five years old have likely been fully depreciated, and in addition may not have the RAM memory, processor speed and hard drive capacity to keep pace with the demands of today’s software. If you plan to upgrade the operating systems of older computers, this is a logical time to upgrade the computers as well. At Drake, we prefer Dell products for their excellent customer support and breadth of product lines. But there are many bargains to be had at this time of year, with one major caveat: don’t take the lowest cost computers from the discount merchants or the big-box stores. Shop for processing speed, RAM memory and hard drive capacity – not just price. Then invest in additional RAM memory (8 GB is considered reasonable for a single computer, 4 GB minimum). 

4. Backup in the Cloud
By now, the chances are good that at least some percentage of your tax and accounting software resides on a cloud-based, online platform. If not, it certainly will be in the next year or two. Consider making the additional move to store, archive and backup the firm’s critical data in a cloud-based server. There are three benefits to doing so: 

• Backup to the cloud costs less. The whole system can be automated, at a very low cost, saving on staff time and the cost of backup media.

• Backup to the cloud is more secure. If you use Drake Hosted this coming season, we provide automatic storage and backup of your data in a secure facility with redundant backup.

• Storage is off-site. From Hurricanes Katrina to Sandy, we have learned the steep price some firms pay for failing to back up their data off-site. The reality is that most companies that do not store their data securely off-site never fully recover from a major disaster. 

5. Revisit Network Security
This is different from the investment in security hardware and software, and applies to the transition from Ethernet-based office networks to wireless networks. Ethernet networks require wires through walls and ceilings, with wall plates in which to plug in each computer. Wireless networks allow expansion without dragging expensive cables through walls, and permit the easy addition of peripherals such as printers and scanners. But these wireless networks come with their own requirements for security, and must be configured properly. This is something that the firm may not have the expertise to accomplish without outside assistance, but it is critical. Here are the minimum security requirements for a wireless network in a tax or accounting office: 

• Change default passwords on all routing equipment

• Utilize complex secure passwords – each password should include at least one lower-case character, one upper-case character, one number and one “special” character.

• Configure strong WPA(2)/WEP Encryption

• Change the default SSID on the access point

• Use static IP addressing for nodes

• Enable and utilize MAC Address filtering

• Enable firewalls on computers and routers

• Keep the operating system patched with current updates 

6. Upgrade the Office Printers
In every instance, we recommend laser printers over the older ink-jet technology, since the latter has reached the point where the cost of replacement cartridges is often higher than the cost of the printer itself. Upgrade to laser printers that have Wi-Fi capabilities, so that they can be shared over a wireless network within the office. Accounting firms should also consider an upgrade to color laser printers for client presentation materials. The cost of these has also dropped to a level equal to or lower than inkjet printers. 

7. Upgrade the Office Scanners
Scanners for tax and accounting applications have evolved rapidly in just a few years. Current scanners include mobile units for field use, ADF (automated document feed) workgroup models, and even units that can scan via smartphone photographs. These should, like the office printers, be accessible via the office wireless network. Most firms now use a distributed scanning architecture, which includes mobile phone scanning apps for emergency scans; mobile, small-footprint road warrior scanners for outside client meetings and audit input; and more rugged workgroup scanners with ADF for high-capacity scanning and integration with document management systems. 

8. Invest in Other Scanning Solutions
Two that are emerging as important technologies – not yet mission critical, but will likely become so – are card scanners and e-signature pads. Card scanners will become increasingly important as the Affordable Care Act is implemented, so that tax preparers can easily scan in double-sided insurance cards to verify medical coverage. And e-signature pads will likewise replace the need to produce, scan and store paper documents merely to have a client’s signature on a tax return or other document. Both of these scanner solutions are proven technologies supported by Drake Software. 

9. Consider a New Phone System
There are two options here. The first is to untether, which means to replace the desktop phone system with mobile phones (usually smartphones). This option offers flexibility in terms of adding new phones and managing the use of the phones through shared minutes and data plans as necessary. The second option is to replace an older, PBX-based office telephone system with a newer VoIP system. The VoIP system will help reduce costs, but requires a more robust Internet connection to support the higher data throughput of voice as compared to digital data. Either of these options may represent a substantial cost savings over the telephone systems in use in most office buildings that were build more than ten years ago, and should be considered for active use in place of the 1980s-based PBX systems. Note that the same rules that apply to network systems apply to VoIP. Passwords must be changed from default, routers must be secured, etc. A compromised VoIP network can be utilized by hackers to place thousands of dollars’ worth of overseas calls before the owner is aware that it has been compromised. The owner is then liable for these charges. 

10. Invest in Dual Monitors
Most accounting firms have already adopted dual monitor systems for their professionals, which permit the accountant or tax preparer to view last year’s data and the current year return at the same time, without constantly switching between windows or views. Tax preparation firms are also moving to this dual-screen system. If your firm has not made the transition, this is an excellent time to do so while monitor costs are low. Note that dual monitors generally require the addition of either a dual-head video adapter or second video adapter to the computer. 

There are other hardware options to be considered for upgrades as the firm prepares to enter a new tax season. Any monitor or hard drive showing signs of wear should be replaced immediately. Monitors, in particular, often signal impending failure by presenting streaks on the screen or tinting in color at the edges. 

This is also a good time to invest in new keyboards and pointing devices, since these see a lot of wear in the course of a year. Dirty keyboards present an untidy appearance to clients, and dirty pointing devices such as a mouse may cause a failure to operate correctly. 

The beginning of December is an excellent time to review the firm’s technology needs, implement changes and updates to making this upcoming tax season the most productive and profitable in the firm’s history.