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Digital Transformation

Tax software red flags and what to do about them

· 7 minute read

· 7 minute read

It is time to point a critical lens at the tax software your firm is using and ask yourself the question: is it working for us? Your tax software is one of the strongest tools at your disposal for increasing efficiency and making life easier for your clients and your team, but is it enough?  

Changing tax software can be a daunting process – but is essential for any firm looking to grow and increase the efficiency and breadth of services they can provide their clients. Familiarity with the current software, time to research and learn a new software, and indecision around value, are all common factors that limit firms from switching to a more comprehensive and fully integrated tax software. This article should serve as an overview of how and why you should upgrade your tax software 

It’s time for a change in your tax software 

The first step for any firm that needs to switch tax software is recognizing a need. It is not always obvious that change is needed. Often issues can be written off as ‘simply the way it is’. If you are uncertain about whether your firm needs to rethink their software strategy, check out this list of red flags that signal it may be time for change. 

Tax software red flags 

  1. Re-keying data and repetitive manual entries
    You’re spending your time manually entering or re-entering the same data because the software does not integrate properly. This is a major sign that your firm could be doing something different to save time and give yourself the ability to increase capacity.  
  2. Tax return review redundancies
    Your firm is checking returns many times to catch errors and update information. You should investigate a more comprehensive software solution that will save you an immeasurable amount of time.  
  3. Cumbersome on-boarding
    When training new members becomes a hassle due non user-friendly tax software, it is probably time to for change. Easier on-boarding leaves room for growth and reduces wasted time. This is especially impactful in offices with many remote employees.   
  4. Disruptive software updates and software crashes
    Do not let your workflow be interrupted by faulty tax software. A good tax software will save your business time and money by limiting crashes, freezes and stalls and makes updates easy.   
  5. Manual updates
    Updates require an IT (INFORMATION TECHNOLOGY) manager to install manually and disrupt your workflow. Updates are not automatically downloaded from the cloud to all the computers on the network. Big teams should be especially wary and look for a tax software that does no inhibit work from many team members at once.   
  6. No seamless integration
    If your tax software doesn’t integrate with other software or third-party programs used by your firm, restricting workflow and limiting collaboration.   
  7. Low utilization
    If you are noticing a low utilization rate or see a trend of a decrease in billable utilization, this may be a sign of faulty software.  
  8. Security breaches
    If your software has been hacked, putting your firm and clients’ information at risk, it is time to look for a new software with proper security. If the software has not been hacked, but there are no security measures to prevent this from happening, making the change now could prevent catastrophe.   
  9. Not mobile friendly
    Do not let your tax software leave you in the past. Your tax software must be mobile friendly to accommodate all clients and whatever devices they use.  
  10. User limitations
    You want your firm to be able to work collaboratively. If only one person is able to access the file at once, and a manual save is required after each use, productivity is limited. Software that saves on the cloud allows for more collaboration and  
  11. Microsoft Excel
    If your firm is using Microsoft Excel as its go to software to keep track of things, it is time for a change. Specialized tax software makes integration easy.

Even if some of these issues do not jump off the page as problems your firm is facing, ask your team and survey your clients before deciding whether your current software is working. Compiling a list of wants and needs from your team is an excellent way to evaluate if there is a need for change.  

If you are in need of new software 

If you found yourself saying, “Yes, this is me,” when reading through this list it sounds like it’s time to change something about your tax software. Converse to the signs that change is needed, it’s just as important to recognize signs that you are picking the right software.  

When selecting a new tax software, look out for these key features and attributes: 

  • Easy installation 
  • Intuitive interface 
  • Automatic updates 
  • Real time legislative and regulative updates 
  • Fully integrated with all other software 
  • Electronic file sharing and customer portal 
  • Electronic billing and signatures 
  • Data importing  
  • Technical support 

Evaluating software from a holistic lens 

When reading through the list of red flags with your tax software, it becomes very easy to pick one pain point and find a quick solution. Be wary of this way of thinking as it may cause more complications in the future or create more problems than it solves. Approach software transition from a holistic lens, including all the potential issues with your current software, as well as how the new software will integrate with your current software ecosystem.  

Taking this approach to computer software also allows for transition plans in multiple areas of your firm’s software. Consider which options allow for the most flexibility and integration.  

Implementing changes 

Of course, once a need has been evaluated and confirmed, you will need a plan of action. Implementation of a new tax software is often done best in a phased plan. Start with your company’s vision and create a multi-step plan that allows your company to transition smoothly. Consider these nine steps to implement a new software. 

  1. Share the firm’s vision
    Share your vision for the firm and how your new tax software will improve your services and make life easier for your team. Make sure everyone is bought into the changes and moving in the right direction.  
  2. Assign champions
    Your implementation plan should be well documented, and each step assigned to champions responsible for a different piece of the plan.  
  3. Communicate how roles are impacted
    If the change significantly alters the role for your technology solutions team, or employees with an abundance of knowledge on the legacy program, make sure they know their value to company is not measured by their knowledge of the program. Messaging like this is important for having the entire team on board with the change. 
  4. Set deadlines and define milestones
    Break down the seemingly complex and cumbersome process into easier digestible steps. Measure these steps and track your progress. 
  5.  Celebrate milestones
    Celebrate the progress you make in the transitional period to keep your team energized and dedicated to making the changes work. 
  6.  Be prepared to pivot
    Although it is best practice to have a plan and stick to it, be ready to pivot. You will learn more about the new software and how your team is adjusting to the change as the process furthers. 
  7.  Don’t re-invent the wheel
    Make the process as simple as possible by utilizing your available resources. If you know other firms making similar transitions, ask how they formulated their plan. Your implementation plan should be simple and effective, but it does not need to be entirely new.  
  8.  Determine the impact of efficiency gains
    Your new tax software will greatly increase your efficiency as a firm. This could have implications for your staffing and team. Determine what changes may need to be made and clearly communicate this  information with your team.  
  9.  Don’t wait
    Waiting for the right time to make a change may sound like the right idea. Truthfully, this right time may never come. Make time for the changes now so that in the future your firm will be able to benefit from the positive impacts of your new tax software.  


Making a major operational change like a new tax software can shake up your firm, but if done properly will be a painless and massively beneficial move. Be certain to establish a plan and communicate with your team during each step of the process.  

Learn more about tax software red flags and what to do next.






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