AICPA Annual Tax Software Survey

By James Stork
VP of Education, Drake Software 

The American Institute of CPAs has released its 2013 survey of tax preparation software, and Drake Software again rated highly for customer satisfaction and value.  Here’s a summary of the key findings and how we fared with CPAs. 

The survey begins with a recap of the problems encountered during the year: 

CPA tax return preparers in 2013 contended with a compressed filing season and widespread reports of software performance problems. Software producers, the IRS, and tax preparers alike had to scramble to revamp their systems to reflect the retroactive enactment of many key extended tax provisions and some new ones by the American Taxpayer Relief Act of 2012, P.L. 112-240. The IRS was unable to accept any 2012 individual returns until Jan. 30 and not until March 4 for individual and business returns involving a number of items, including some common ones such as education credits, general business credits, and depreciation. In an informal poll during a May 10 AICPA Tax Section tax season debriefing webinar, 36% of participants called this tax season worse than last year’s, and 24% said it was the ‘worst tax season in history.’ Sixty-one percent said they filed more extensions this year than last. 

Major Findings

Filing season was not the only thing compressed; a long-term trend of consolidation in the industry continued, meaning fewer software products garnered enough responses this year to be included in this analysis and thus be included as “major” products. Only eight software products passed the cutoff of being used by at least 1% of the respondents who said they prepared tax returns for a fee in 2013, versus 10 products in 2012. 

Aside from the few tax preparation packages that experienced problems, the survey’s overall rating of major products was the same or nearly the same as in 2012 (see Exhibit 1). For all major products, the overall rating this year averaged 4.1; Drake Software again among the highest rated in overall satisfaction with an average rating of 4.3. 

Users of Drake software reported the highest price satisfaction; 49% of its users reported price as its best attribute, the same as in 2012 (see Exhibit 2). Asked specifically about ease of use, respondents ranking their software highest on a five-point scale (with 5 being the easiest to use) were Lacerte and Drake (both 4.4—see Exhibit 1.  Among users who ran a conversion package (972 for all major products), Drake and Lacerte users reported the highest satisfaction with that process, an average 4.2 and 4.1 out of 5, respectively. 

Product Switching

When respondents were asked whether they planned to use the same software next year, the highest percentage of “yes” responses were from users of UltraTax CS at 92% and Drake at 90% (both the same as last year).  Price was the primary consideration for switching to Drake, with 31% of those new users saying it was a reason. 

Best for a New Practice

Drake also ranked top among users who would recommend their software to someone starting a new practice, at 95% (see Exhibit 1). Nearly all of the users of Drake, ProSeries, and ATX were in practices of five or fewer preparers. 

New Technology

For a second year, the survey asked respondents how they accessed and used their software. Responses indicated a slight increase in users who downloaded their software (70%, versus 64% in 2012) and who used a program that resided on the vendor’s server (11%, versus 10% in 2012). Correspondingly, a smaller percentage of users (19%) installed the software from compact discs than last year (26%) (see Exhibit 5). 

Respondents again registered a strong preference for keeping return data on their own network or personal computer (90%) rather than on the vendor’s server (10%), a result unchanged from last year. Interest in having their tax preparation software available on a tablet device waned. This year, 35% of respondents said they would like a tablet version, while in 2012, 41% said they would. 

The IRS has adopted new technology, too, and the survey asked whether respondents had been asked by the IRS for accounting software data in connection with an examination of clients’ returns. Fifteen percent said they had. 

Technical Support

A higher percentage of users (86%) than last year (79%) reported that they sought technical support for their software (see Exhibit 6). The highest percentage was for Drake, at 94%, and the lowest was for ProSeries at 62%. Drake users, however, ranked their provider highest in both ease of obtaining support and its quality. Users of all major products still are more likely to use the phone (80%) to obtain support than email (27%) or live chat/instant messaging (16%). 

The same percentage of users of all major products as last year received training in use of their software (25%), and most who did ranked it a 4 out of 5 in quality (42%) or a 5 (26%). Forty-three percent of Drake users gave their training a 5 out of 5. 

Results and Methodology

The survey was administered by email in May 2013 to AICPA members who had indicated they prepare tax returns. It received 5,004 responses saying the respondents prepared tax returns for a fee in 2013. The exhibits show detailed answers for seven of the 16 software products included in the survey. 

Half of respondents to this year’s survey prepared 500 or fewer returns during the season, and 27% prepared 1,000 or more. For most (89%), business returns were less than half of the returns they prepared, with nearly half of all respondents (48%) saying business returns were between one-quarter and one-half of their returns. A majority of respondents, 54%, were able to decide for themselves what software to use, and another 27% said they had input into the decision. 

More complete survey results, including for products not included in this analysis, are available online. 

Our congratulations to everyone at Drake Software who contributed their skills to our successful tax year, and to our customers who responded to the AICPA survey.

Source:  AICPA at http://www.aicpa.org/Publications/TaxAdviser/2013/August/Pages/bonner_aug2013.aspx