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Practice Management Tools

Susan B. Anders, PhD, CPA/CGMA

The 2018 CPA Journal Tax Software Survey (http://bit.ly/2FMb81K) reported that over 26% of participating CPAs integrated their tax software with office workflow or client data management software, while another 14% were considering this option. The use of portals for clients to upload tax documents had a much higher acceptance, with 46% of respondents subscribing to that option. Almost 40% of survey participants indicated that software integration was important to their practice, and the need to integrate practice management or other software applications with tax preparation software has regularly been stated on the survey as a reason for switching tax preparation products. Furthermore, the IFAC Global SMP Survey for 2018 (http://bit.ly/2AFPIxB), an international survey of 6,000 small- to mid-sized accounting practices in 150 countries, revealed that 32% of respondents planned to use cloud resources for client interface and services.

Online computing is a too broad a topic for this column, so for this month the focus is narrowed to a spotlight on three popular, lower-cost practice management providers that also offer a snapshot of some of the diverse offerings in this area. The vendors profiled here provide a good look at their products without requiring a free trial or demonstration, as well as some other free and useful resources that anyone can access. Readers not currently using practice management applications may find something interesting to try.


Karbon is a practice management platform that allows firms to standardize work products, automate tasks, and maintain records of all communications and document files. Its website (https://karbonhq.com/) provides many free tools and materials for potential customers. A 15-minute overview video, as well as many of the free downloads, requires registration; however, a substantial amount of information is available without submitting one's contact information. The site presents many screenshots of the software in action, and short one- to two-minute videos are available highlighting specific features, such as workflow efficiency, performance analytics, and task automation. A “Getting Started” webpage (https://help.karbonhq.com/getting-started) provides access to several videos and downloadable guides on Karbon features, along with fundamental and task-specific training.

When using Karbon, accountants can view firm work-in-process by due date, team member, project status, and project type. The timeline feature stores notes and emails related to each job, while the details view contains the time budget and all work-papers. Standardized templates can be used to create work items, including details such as start dates and due dates. Users can not only assign work to firm staff through the templates, but also to clients, who can submit documents and receive reminders through the Karbon system. E-mail management can be integrated into the program, which includes options for assigning messages to a colleague and adding to a to-do list.

Karbon Magazine (https://karbonhq.com/magazine) is a good place to begin learning about the types of public resources available. The main page presents a large collection of short articles, reports, and videos, with a focus on human resource management, accounting firm growth, systems and processes, and industry news. As an example, “Why You Can't Predict Growth by Looking Backwards” (http://bit.ly/2DR7l0f) is a short article that introduces new ways of measuring performance. It includes a link to a free 25-page download, “Metrics that Matter,” which provides 15 revenue, profit, scale and efficiency, and client service measures (http://bit.ly/2raxn7t). “Managing a Remote Team with Karbon” is a 39-minute video that presents best practices for managing an accounting firm that operates virtually, with both staff and clients in a variety of locations (http://bit.ly/2rbN9ia).

In addition to “Metrics that Matter,” several other reports are available at https://karbonhq.com/accountant-resources/reports. “The Talent Challenge: Insights from Karbon's 2017 Talent Survey” is a 28-page document that covers several key findings, such as employee recruitment and management as some of the largest problem areas in accounting practice (http://bit.ly/2rcdpsS). Accounting instructors might be disappointed in the comments on the perceived inability of universities to equip “future accountants with the right skills and expectations to work in the accounting profession.” Looking at other aspects of accounting practice, “Accounting Trends Report 2016” is a 20-page PDF that summarizes five trends gleaned from conversations with Karbon's customers (http://bit.ly/2zpmdAb). The trends include the importance of client service as a year-round relationship, choosing a practice niche to gain a competitive advantage, and integrating technological applications.

Karbon offers 30 free downloadable best practice templates, many shared by customers and formatted as one-sheet Excel files (https://karbonhq.com/accountant-resources/templates). These checklists are written to correspond with Karbon's practice management software; however, users can easily adapt them for their own purposes. “End-of Month-Accounting” identifies 16 write-up steps to be accomplished, with cells for due dates and responsible staff person (http://bit.ly/2Qs9Rkg). Several tax practice templates are available for Forms 990, 1040, and 1120, as well as payroll tax returns, covering the steps from sending an engagement letter to marking the work as complete. For administrative tasks, there are two very helpful templates: “Onboarding a New Team Member” (http://bit.ly/2Q0JlPT) and “Onboarding a New Client” (http://bit.ly/2E2k5lU), which include extensive lists of important tasks, organized by stage.


Canopy is a cloud-based practice management system with a focus on tax professionals. Its website (https://www.canopytax.com/) provides an overview of its features through screenshots and short videos. Key elements include a management dashboard, project status tracking and reminders, a client portal, auto population of data, retention of multiyear tax return transcripts, IRS notice resolution and response letter templates, and access to federal and state tax forms. A detailed list of features is available on the pricing page (https://www.canopytax.com/pricing).

Canopy's blog (https://www.canopytax.com/blog) presents articles and videos covering practice management, tax resolution, and tax preparation and planning. “By the Numbers: International Accounting Day” (http://bit.ly/2Rg9S8o) is an info-graphic listing nine fun facts about the accounting profession. For example: there are 664,532 CPAs in the United States, out of 1.24 million accountants and auditors.

More than two dozen free e-books and guides are available, including several on aspects of a virtual tax practice and on tax resolution services (https://www.canopytax.com/ebooks/). The “Tax Prep Pricing Guide” is a six-page PDF that summarizes average national fees for Form 1040 with Schedule A and state return, Form 1040 with Schedule C and state return, and Basic Form 1040 with state return (http://bit.ly/2FHxFwu). The data is presented by individual state, most expensive, and most affordable. The Canopy Community blog (https://community.canopytax.com/) includes a tax practice discussion board with topics covering tax resolution issues, such as offers in compromise and penalty abatements.


Xero (https://www.xero.com/us/) is a popular entry-level provider of online accounting and payroll software. Xero's Practice Manager is designed to oversee tax return preparation and annual accounting service inventory management and invoicing, as well as to generate performance metrics (http://bit.ly/2zsqv9J). The Practice Manager focuses on time and billing information, from lead and quote generation to creating an engagement with required tasks and designating internal deadlines. Most of the job detail is initialized in the quote generation process. The tool's job manager lists the in-process client work, with start and due dates, and can be viewed in total or by staff member.

Interested CPAs will have to submit an e-mail address to access a free 50-minute demonstration video, but at least it is self-directed and available at the user's convenience. The web-page with the video also includes links to articles on getting started with Practice Manager and connecting Practice Manager to Xero, as well as a free three-hour training video on how to implement and operate the software.

Xero also has a useful feature called the App Marketplace (https://www.xero.com/us/marketplace/) that helps users find mobile applications that work with their Xero features. There are 16 mobile apps listed that connect with the Practice Manager, such as Receipt Bank and Spotlight Reporting. Xero also provides its own apps for Practice Manager and Xero Workpapers in the App Marketplace.

Susan B. Anders, PhD, CPA/CGMA is the Louis J. and Ramona Rodriguez Distinguished Professor of Accounting at Midwestern State University, Wichita Falls, Tex. She is a member of The CPA Journal Editorial Advisory Board.

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