Who you gonna click?
a survey of the many options for tax and accounting research
BY TED NEEDLEMAN
It’s the bane of just about every profession: You spend years and years in school, and then spend
the rest of your professional life playing keep-up as the profession changes.
That means hitting the books for the latest
read on a law or standard that affects the way
that a transaction should be approached. Back
in the day, “books” meant just that: loose-leaf
services with binders that had to be updated
on a regular basis to reflect new laws and tax
cases, new analyses, and corrected errors in
pages already filed. Even today, paper manuals are still common, especially analyses of
recently passed legislation or court findings.
entered our day-to-day life. But searching
electronic sources is still a specialized skill.
Most of the vendors who offer electronic research subscriptions also provide training,
often online, in how to get the most out of
THE WORLD OF E-RESEARCH
But much tax research is now performed
electronically. That puts the burden of updating the information, and of ensuring that
crucial updates and changes are reflected, on
the vendor providing the service, not on the
clerk or librarian responsible for accurately
filing paper pages.
That’s not to say that paper is passé. Numerous publications on all areas of taxation
Ted Needleman is senior director of the
Technical Services Division of Industry
analysts Inc., an independent market
research firm and testing laboratory. He
was previously the editor-in-chief of
Accounting Technology, and writes frequently on
software, hardware, and technology-related
and accounting regulations, techniques and
other areas of interest are available in book
format. But where electronic versions of these
and other resources are available, they offer
Electronic research services have been
available since the 1990s, first on CD-ROM,
then directly online, and finally over the Internet. The availability of code, laws and analysis in searchable electronic format has been
of great benefit, even to the smaller practice.
Because it’s possible to search across a wide
variety of different sources, it’s likely, with the
proper use of search terms and access to multiple reference databases, that your search
may find information in places where you
might not have thought to look. And typing
in a search term, or set of terms separated by
Boolean operators, is much faster, and often
more accurate, than thumbing through indices and tables of contents.
But as much as it makes finding relevant
data easier, keep in mind that electronic tax
research is not a panacea. As with the old
loose-leaf services, you frequently need to
have subscriptions to more than a single reference service. Another stumbling block is
defining your search. Searching using Boolean operators has become common since Yahoo, Google and other search engines have
A SMALL UNIVERSE OF VENDORS
There aren’t very many companies that offer tax and accounting research services. The
costs of keeping services up to date and publishing them (even electronically), as well as
analyzing new codes, court cases, findings
and other occurrences, policies, procedures
and best practices, requires a huge ongoing
investment, and keeps the market limited.
But keep in mind that tax and accounting research providers aren’t the only place
to get answers. Strange as it may seem, one
good place to start your research might be
the taxing authority itself. The IRS and many
state and local tax divisions provide numerous booklets on how to handle situations that
involve areas such as estate and death taxes,
retirement distributions, and many more.
There are even taxpayer and practitioner help
lines for many of these agencies.
Of course, these agencies aren’t usually free
with the more arcane interpretations of code,
law and findings that are in your client’s best
financial interest. And if they make a mistake,
it’s the client (and sometimes you) who pays
the piper. And no tax authority is going to look
up and research code sections that might go
beyond the obvious.
Disposition of old hardware is often an issue. If the equipment used by the merged
firm is completely replaced, there will be an
instant inventory of “old” hardware to be disposed of. Be especially careful of data security
on these retired computers. Remember that
simply deleting files is insufficient! Multiple
formats or special “wiping” procedures will
be required to ensure client data is not compromised. Some firms allow employees to
buy retired machines at a discount price, others donate them to suitable recipients, and
still others pay recyclers to take them away.
How it’s done is not as important as having a
plan for it in advance.
Budget: Firms are starting to realize the
IT investment when entering into mergers
or acquisitions. As mentioned earlier, a “rip
and replace” policy is generally the best. Experienced firms are now budgeting approximately $12,000 per user for hardware, software, conversion and training. This may seem
high to you, but I have seen enough budgets
and actual expenses to know this number is
reasonable. It is more expensive to maintain
dual systems, support multiple applications
and wait for six months to make the conversion. In 2010, the best firms spent approximately $10,000 per full-time-equivalent for
IT, so the $12,000 number is reasonable.
Too often technology is an after-thought of
managing partners when it comes to merg-
ers and acquisitions. It is not unusual for a
firm that is on the market to under-invest in
the year prior to acquisition. Granted, there
are economies of scale with regard to licens-
ing and end-user computers. Typically this is
more than offset by the required training to
standards and integration of the cultures, of
which technology is a major component.
BEST PRACTICES, LESSONS LEARNED
While every merger or acquisition is unique,
a few “best practices” can be distilled from
the experiences of the Boomer Technology
Circles firms. These include the early establishment of transition teams to identify
issues, mapping the merged firm into the
gaining firm, and coordinating extensively.
Firms should create a statement of “Day One”
standards detailing what is expected to be
in place and functional on the day following
the merger. Many firms have decided that the
“rip and replace” method of hardware integration is the most beneficial in the long run.
Likewise, applications must be standardized
across the combined firm. Data conversion
issues are critical in these cases.
Training and support are critical success
multipliers. The faster people are trained, and
the better they are supported in their new
environment, the more productive they will
be. Training is also an essential tool in the
integration of new staff into a combined firm
culture. Finally, intangibles like caring and
concerned leadership at all levels are criti-
cal. Leaders must remember that people are
often undergoing a traumatic transition and
need to be guided through it to the desired