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Making the Portal Decision
CPAs have long been the primary
business “information communicators” with clients providing tax returns,
financial reports, and other business analysis to help these clients
make better business decisions or comply with regulations.
This information traditionally was created in a paper format that
was physically handed to, delivered, or mailed to the client.
With the push towards today’s digital or “less-paper”
environment, the format of these documents has changed to electronic
means including email with file attachments, FTP (file transfer
protocol) sites, and client portals.
The vast majority of practitioners
wanting to go “paperless” initially utilized email to send these
documents. Many accountants
used encryption or password-protected files, but these processes have
come under fire due to the lack of security or ability to guarantee
confidentiality. There was
also the administrative burden it placed on both firm personnel and the
client to access the files and save them to the appropriate place.
Some States such a Massachusetts and Nevada have also made it
illegal to email documents such as tax returns without first blocking
personally identifiable information, and practitioners are finding that
it is somewhat impractical to utilize software to redact that data.
Many firms also setup FTP sites
that allowed files to be transferred to or from the site.
While the FTP solutions allowed most files that were too big to
be transferred via an email attachment (such as client QuickBooks
files), the lack of administrative tools or security features created
opportunities for one client’s confidential data to be exposed to others
accidentally. So what is an
accountant to do?
We believe that the most effective
solution for accounting firms today is to utilize a client portal.
A client portal is a secured data drive that is accessible by
both firm personnel and the intended recipient of the information via an
Internet browser. These
portals are most commonly entered through the firm’s website and can
also be accessed via a link that is emailed to the receiving party.
Today’s portals can require a secure logon and password be
entered before accessing the site and also protect the data with
encryption when it is being transferred over the Internet, which makes
it today’s most viable solution.
While initially identified with tax return delivery, portals show
promise as the transfer tool for all client document interactions
including organizers, electronic filing authorizations, large client
accounting files, and managing audit documents prepared by the client.
Today, there are at least four
different paths practitioners can choose from to obtain a portal.
The first path is to purchase a portal as part of a website
hosting package. Many
smaller firms utilize a third party to provide website content and
regular updates and most of the vendors today offer a portal as part of
the hosting. A good list of
such providers can be found at
http://www.websites4accountants.com and is a cost effective way for
a small firm to manage their website and get a portal in one pass.
While this solution is a good entry point for a small number of
clients, the costs often increase along with the number of clients that
use the portal, and the volume of data that is being stored.
The second path is to utilize a
commercial portal solution that is usually linked through the firm’s
website. Products such as
ShareFile, LeapFile, and FileGenius are examples of dedicated solutions
that have been popular with accounting firms recently.
For small to medium-sized firms that have larger volumes of
client portals and data, these solutions become very cost-competitive.
These products are extremely easy for clients to utilize and firms
usually need a minimal amount of administrative and end user training to
get them up and running.
The primary downside to these web-hosted portal solutions is that
they can come with a limited allotment of storage space with the
standard contract. Once the
firm has breached this amount, they pay for additional increments of
disk space, so it is critical to understand this before making a final
decision.
For firms with a very large number of
clients or volumes of data, the third path is for these firms to build
their own portal. This
requires a dedicated firewall, server, and implementation experience,
but can end up being significantly less expensive than the previous
solutions listed. However, because the firm is taking on all the
responsibility for security and liability, this solution comes with the
greatest risk so it is usually relegated to firms that have a full IT
staff.
The fourth path we see in firms today
is to purchase a portal solution that is integrated with the firm’s
document management or client workflow system, which would be viewed as
hybrid of the previous paths mentioned.
For those firms that have already implemented a document
management solution, we feel this will be the most likely long term
solution as the integration makes it easy for firm personnel to move
files in and out of the portal, receive notification of any activity,
and better manage the data from an administrative perspective.
Because it is in the same
application, there is usually the least amount of training required for
firm personnel to utilize it. The majority of firms using a document
management system today are managing their servers and data internally,
but we feel as cloud computing takes off, more and more firms will
utilize the combined document management and portal solutions offered by
external hosting companies. Two
workflow providers that have integrated portals are XCM Solutions and
CCH/WoltersKluwer WorkStream, which would be options for firms that do
not have a document management system.
When making a decision as to which
portal solution is best for your firm, it is important to first estimate
the volume of usage anticipated today and in two years.
Most firms traditionally hosted portals for 10% or less of their
clients initially and then changed solutions when the volume made their
existing product cost prohibitive.
Firms can get an idea of the volume required by analyzing the
size of the tax return and source document PDFs, audit engagement
binders, and client QuickBooks files.
The firm should next look at the ease of setup for a new client
and the specific steps that must be taken to transfer a file to the
portal, which can vary dramatically between the solutions listed.
A very important feature to compare between products is the audit
trail and what notification occurs when a file is uploaded, accessed, or
deleted, including who would get this notification.
Other features the firm may also want to evaluate are whether the
portal provides clients their own secure areas (client lockbox) which
firm personnel would not have access to, and whether temporary or
limited access can be configured for third parties.
Finally, and possibly the most important consideration is the
ease of use from the client’s perspective, so it is critical that all
the members of the firm logon as an end user and experience what your
clients are going through so they can respond to the inevitable client
support questions. The transition to digital files will require digital means of moving these files to and from clients and the most secure and viable solution is a properly implemented portal. Firms that do not have a portal today should immediately evaluate solutions available and select one so that it is available prior to the upcoming busy season.
Roman H. Kepczyk, CPA.CITP is president of InfoTech Partners North
America, Inc. and works exclusively with CPA firms to understand and
implement today’s digital best practices within their tax, audit, client
service and administrative departments. |