New firm? 4 must-haves for your tax software

Key takeaways

• Choosing simple-to-use tax software helps accelerate new tax business growth.
• Firms should look for built-in diagnostics to protect them from common errors.
• Lean into flexible software pricing and up your spend when you’re ready.
• The platform should have some overall scalability so that a firm can confidently grow.

Starting a tax firm requires more than clients and credentials. It requires dependable technology that works to improve the financial outcomes of the firm’s clients.

The best entry-level professional tax software should be intuitive, affordable, accurate, and capable of scaling as a practice grows. The software shapes how the firm prepares returns, how clients perceive the firm’s professionalism, and how smoothly the firm can expand.

Start-up firms often operate with limited capital, a small but growing client base, a sole practitioner and part-time staff, and individual vs business returns. As a result, firms should keep their environment simple and practical, so that when it’s time for busy season, the firm is ready.

Deciding which tax software to adopt is a crucial part of the firm’s tech stack. It can mean the difference between a stressful busy season vs. a season filled with meeting goals and growing the firm.

Here are 4 must-haves for your new firm’s tax software:

1. Make it easy to learn and easy to use

When launching a tax business, time is the most valuable asset. The faster a firm becomes proficient, the sooner the firm can focus on recruiting and retaining clients,  and service delivery.

Tax software should provide: forms-based data input, clear visibility into calculations, minimal clicks between schedules, and prior-year carryforward of returns.

ProTip: Intuit® ProSeries® Tax is designed with an intuitive interface that allows new preparers to begin filing their clients’ returns without extensive retraining, helping startups move quickly from setup to revenue.

2. Built-in diagnostics and compliance safeguards

Whether new or established, firms cannot afford errors in compliance, according to David Davis, CPA, a seasoned user of ProSeries.

“We like to think that our devotion to accuracy is unique, but I suspect every CPA feels the same way,” he said, speaking specifically about his location. “In Tennessee, I am 30 minutes from two different states, so I get a lot of multi-state returns.”

Diagnostics are key and provide a very important level of reassurance, especially while a firm builds their reputation. Accuracy helps build credibility from day one. As a result, tax software should include automated error-checking, pre–e-file validation, cross-form consistency alerts, and transparent calculation visibility.

ProTip: ProSeries includes more than 1,000 built-in diagnostics to help identify potential issues before returns are submitted.

3. Pricing flexibility

No matter what kind of firm, there are costs associated with opening the doors—and financial surprises are the last thing anyone wants. Startups must align their expenses with cash flow, so when it comes to technology, clear pricing options are important because the firm can ensure it includes these expenses into its fees.

Flexible pricing options should include pay-per-return pricing, unlimited return packages, hosting or cloud flexibility, and transparent renewal terms.

Tax software should protect a firm’s margins without limiting capability. This flexibility allows a firm to grow at their own pace.

4. Scale for growth

Even if a new firm begins with individual returns, tax business growth may introduce small business filings, payroll services, seasonal staff support, and niche services.

ProSeries has enabled James P. Coco, CPA, to scale; he describes how he has grown his business over time.

“My practice centers around three major areas of concentration: individual income tax preparation, small business accounting and related business taxes, and payroll processing for my business clients,” he said. “Over the last five years, I’ve continued to add new clients, mostly from referrals or from people doing a Google search for CPAs in the area.”

For firms with goals similar to James, tax software should support secure client portals, digital signature, and multi-user access, if needed. Choosing a platform that scales prevents disruptive migrations and creates a solid foundation for long-term stability.

Reinforce your workflow

When the software reinforces workflow instead of complicating it, the firm can focus on building their client base and creating a solid, long-term practice. Your tax software should be intuitive and easy to learn, protect accuracy through built-in diagnostics, offer flexible pricing, enable document management, and have cloud-hosting.