A day in the life of a tax adviser using Windows.

The goal of this column is to offer ideas and insights on how to use computer technology to one's best advantage. This will be accomplished by explaining Mr. Leonard's use of computer technology in his day-to-day activities. His title at BlueCross/BlueShield is Senior Tax Accountant; his duties revolve around the gathering and organization of information relating to tax returns and their preparation. In addition to these core duties, there are the inevitable "other duties as assigned." These tasks or special projects may involve a one-time occurrence or require continual review and update.

Mr. Leonard works on an IBM PS/2 model 90, a 486 CPU with a clock speed of approximately 66 MHz. It has 8 MB of main memory, a 1.44 MB floppy disk drive, and a 400 MB hard disk drive. Attached to the basic CPU is a 545 MB Mountain tape drive, a second 350 MB hard drive, a Toshiba double speed CD-ROM player, a 3270 IBM terminal emulator, a Hewlett Packard LaserJet III, a US Robotics 14,400-baud modem, a mouse and the requisite parallel and serial ports.

Every computer should have certain basic programs and applications. The programs installed on Mr. Leonard's computer are Microsoft DOS 6.2, Microsoft Windows 3.1, Microsoft Word 6.0, Microsoft Excel 5.0 and Microsoft Foxpro 2.5. Through the use of these core applications, any other application can be emulated quite successfully. Due to the nature of Mr. Leonard's position, he also has many other applications, utilities, etc. on the system. The packages which he uses most frequently are:

* FAST*TAX System 5 Workstation Federal and State Income Tax Package, Current and Prior Year. * FAST*TAX System 5 Workstation Federal and State Insurance Tax Package, Current and Prior Year. * FAST*TAX System 5 Workstation Life Insurance Premium Tax Package, Current and Prior Year. * Dun & Bradstreet PC LINK Software. * IBM 3270 Terminal Emulation Software. * PORTFOLIOS PLUS Tax Management INC. - BNA Portfolios on CD-ROM. * CCH ACCESS, a tax research CD-ROM. * D&B INSIGHT Communications Program. * TURBO TERM Public Domain Communications Program. * PKZIP Utility Software.

Windows is the single program that has most influenced the performance of Mr. Leonard's daily activities. Even though a number of programs he routinely runs are DOS-based programs, he has set up DOS Windows (referred to as a non-Windows application) to run them. The only applications not run in Windows are his daily and monthly tape backups. Windows allows a user the ability to switch from application to application, whether DOS or Windows based, merely by using two keys, Alt and Tab. This saves the time in loading (starting) and unloading (exiting) that a DOS environment requires. Another benefit of using Windows is the Print Manager. This Windows application returns the system to the user (so other applications can be done) while it prints the selected items. The Print Manager only works if printing from a Windows application; it will not work if printing from a DOS-based application run in a DOS Window.

In the performance of his duties, Mr. Leonard spends a substantial amount of time analyzing various accounts for activity and other entries. Some routinely analyzed accounts have many threads of unrelated data running through them. Such data need to be independently analyzed. Generally, this can be done in one of three ways. The general ledger system is Dun & Bradstreet Millennium running on an IBM mainframe. The mainframe system allows on-line real time queries into a specific account for a specific time frame. These queries can be made from Mr. Leonard's PC using the IBM 3270 emulation hardware and software. Sometimes, if there are multiple types of data in an account, a simple query will not suffice: in that case, he uses PC-LINK. PC-LINK allows the creation of a comma-delimited ASCII data file based on the general parameters defined by a query that he downloads to his PC. (In order to accomplish this, a file on the PC can be created to repetitively execute the same request with different conditions or parameters passed to the mainframe; these files are called scripts.) Once the data is downloaded to the PC, it can be either appended into a Foxpro database for future reference or the file can be loaded into an Excel 5.0 spreadsheet using the Text Import Wizard. Once loaded into Excel, all of the columns are set up correctly and no further parsing of the data is necessary. In a few simple additional steps, the data can be sorted based on information in a selected column, then subtotaled based on selected criteria, and finally, if needed, a report of the organized data can be printed. Excel 5.0 also has an additional feature that is very useful. it allows the organization of multiple sheets into one workbook or spreadsheet, thus enabling Mr. Leonard to organize the data in a logical group of spreadsheets or a workbook. This is very helpful in assembling data and worksheets as a backup of items on a consolidated return.

Database applications

with Foxpro

Mr. Leonard uses Foxpro extensively for a number of different applications. On a monthly basis, he downloads the month-end balances for each of his firm's nine companies, prepares summary financial statements and trial balances, and generally uses the files for data query on his PC during the ensuing months. The data for the third, sixth and ninth months are used to prepare the quarterly Federal and state tax estimates. He has found Foxpro useful to develop other applications that assist him in the monitoring and performance of his duties.

One of the more important applications developed in Foxpro is the tax return due date system, a complete system to track due dates, extensions, returns filed and work to be completed by the required due date. With this system, Mr. Leonard can track the returns and prepared tax dockets required for preparation of several required returns by filing date. This application is extremely valuable in a small tax department.

Another database application relates to the additional reporting requirements due to the imposition of FASB 109. Mr. Leonard's department has to develop and maintain an ongoing database of deferred tax items and their book and tax values. With this database, he and his colleagues can prepare reports showing the net asset and liability balances needed for proper presentation in financial statement footnotes.

A database that has saved Mr. Leonard substantial time in the preparation of consolidated Federal and other tax returns is a system called the Income Tax Accounting System (ITAS). The ending annual general ledger balances for all companies are downloaded into individual systems by company. Reports are prepared on a tax return line basis showing the individual account number and balance making up the number to be reported on the final tax return. Tax adjustments to be reflected in the M-1 and M-2 areas of the return can also be entered and reflected on the reports. in addition to showing the individual line items on the return, it also shows the taxable income of the company, the M-1 adjustments and finally the book income. The reports are broken into balance sheet and profit and loss. The final reports are used in the preparation and entry of data into the Fast-Tax system, either the corporate or insurance system. They also aid in the documentation of the adjustments to book income, by tying the workpapers to a particular line in the return and individual accounts to a given line on the final tax return.

Mr. Leonard's department is responsible for monitoring the performance and required additions to two separate deferred compensation programs. Foxpro has enabled Mr. Leonard and his colleagues to easily keep track of the historical balances of each participant in the various plans.

It is obvious that Mr. Leonard depends quite heavily on his database application package (Foxpro) in assisting in the efficient performance of his day-to-day activities. Any time a large number of related data items are involved, a database is the best and most efficient method of handling the data for queries, reporting, summarizing, statistics, etc.

Use of CD-ROM technology

The Fast-Tax corporate Federal, State, Insurance and Premium tax files are delivered on CD-ROM; thus, Mr. Leonard must use his CD-ROM to install these programs. A library of tax forms is built from files provided on the CD-ROM. The necessary data is then entered into the programs for the preparation of the required returns. The data comes from many sources (e.g., the ITAS system, Excel spreadsheets, and other documents, such as NAIC (National Association of Insurance Commissioners) reports).

Often, research has to be performed in order to determine if a position taken on a given set of facts is correct. With the availability of CD-ROM, this research has been made easier. Mr. Leonard always starts with the CD-ROM facilities, due to the extensive indexing and cross-indexing available when reviewing a topic. From the CD-ROM information, he goes into the paper services to read the court cases, letter rulings, etc. If needed, the on-line research facilities of CCH and other services are also available.

Other programs

The corporate fixed asset system is also on i Dun & Bradstreet Millennium system. Reports and queries can be run and downloaded (just as in the general ledger system). This facilitates the preparation of depreciation adjustments and property tax returns.

The D&B Insight system allows on-line lookup of problems, patches and corrections to be made to the general ledger and fixed asset system. This was very helpful last year when certain depreciation rules changed. The required patches were downloaded and applied to the system.

Mr. Leonard also uses a number of DOS-based utility programs in the maintenance of data for operation and backup purposes. One of the most useful of these programs is a public domain program called PKZIP. This program compacts data by removing repeating characters from a file. This allows the overall size of the file to be reduced, sometimes as much as 80% to 90% of the original size. Thus, more data can be stored on hard drives and copied to floppy diskettes for backup or other organizational purposes. The zipped files can be restored to normal size by executing PKUNZIP on the compacted file.

Note: It is important to keep in mind that when Mr. Leonard is working on the mainframe general ledger system, he is also working in Foxpro, Excel, Word, Fast-Tax, and other programs such as PC-LINK. This is where Windows proves to be such a valuable tool.

The future

In reviewing Windows '95, several new features appear to have the potential of greatly increasing productivity. Probably the single most useful addition is the capability of multi-tasking. This allows the user to run multiple applications at once, such as entering into a spreadsheet program while copying from one disk to another at the same time. Another useful feature is the ability to cut and paste to and from a DOS window in Windows '95. Also, it is no longer required to have both Windows and DOS on a system in order to run a DOS application in a DOS window. Windows '95 will run the application as if it were in native DOS mode, allegedly without any problems. Windows '95 also has a status bar at the bottom of the screen that stays on the screen no matter which application is being run. The status bar shows icon buttons for each application currently loaded into memory.

It may sound as if Mr. Leonard has everything he needs and that everything works flawlessly together. Such a utopia has not yet occurred, and is not likely to occur any time soon. The more tools, CPU speed, hard disk storage and main memory his firm has, the more it seems to want or need. However, in the short term, there are certain things that would further facilitate Mr. Leonard's activities. Windows '95 is definitely one such application. Another improvement would be the completion of the Local Area Network (LAN) at Mr. Leonard's company. This would provide the ability to access E-Mail as well as other individuals' schedules. This would aid in the acquisition of information (sometimes a very long, slow process). Another major item that would help would be the implementation of a data server on the LAN, which would allow access to the data available on the general ledger and fixed asset systems.

While Mr. Leonard's day-to-day computer applications may not apply to everyone, they certainly give some ideas as to how work flow can be improved by transferring and manipulating data between applications and other systems.