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First-time computer users.

Effectively automating a tax department can be a complex task, but when approached properly, it can be handled with minimal anxiety. It is impossible to go from little or no automation to full automation in one step. The best approach for a first-time user is to develop a sound plan that involves a series of gradual steps. This will assure that the firm does not move too quickly, and does not take on new aspects of automation until the current ones are working. Once a plan is developed, it should be followed, not moving to the next phase until the current one has been mastered.

It may be difficult to stick to such a plan; early success often leads to the erroneous conclusion that this "automation stuff" is not really all that hard. The temptation to move ahead rapidly should be resisted. By keeping the number of things that can go wrong to a minimum, the amount of time required to identify and resolve a specific problem will be reduced, making progress actually faster.

Inventory areas to automate

The first step in any good plan is to take an inventory of the current state of firm automation, including equipment, personnel, skills and the like, and then examine the practice to identify areas that might benefit from automation. These might include tax planning; return preparation; word processing; spreadsheet analysis; presentations (such as the use of graphics); newsletters; administrative tasks; time and billing due date monitoring; client master files; marketing; and writeup work.

There are many sources of information on how others have dealt with automation in these areas. Technical materials are available from the AICPA and various state societies, which also sponsor meetings and seminars related to this area. Networking (i.e., contacts with other CPAs) can also provide useful information.

Suggested planning steps

Secure agreement of the partners: Partners are the owners of the firm, and their agreement on what is to be done, the timetables set up and the cost of automation is essential. They do not need to be involved in all the technical aspects, but they must understand and support the effort.

Put someone in charge: While many people may work on an automation project, someone must be responsible for its success. It should be an individual with decision-making authority and an interest in the introduction of technology into the practice. That person should develop the technology plan, present it to the partners, secure their agreement to proceed and maintain their continuing support.

Set schedules: Plans that proceed one step at a time are the most likely to succeed. Target dates help all concerned. Therefore, try to set dates that are realistic in light of the technical analysis required, the availability of equipment and software, the availability of support from those providing the equipment and software, and the time requirements of the practice.

Establish review points and procedures: It is important to establish periodic times and procedures for review. This will establish deadlines for those involved in the automation effort, and allow for early detection of the difficulties that inevitably occur. For these reasons, scheduling of meetings, periodic demonstrations and written reports (in some circumstances) may all be very helpful.

Define success and be realistic: It is important to define what is meant by "success." Success will vary from firm to firm, and may be measured in financial terms, operations improvement or increased quality of life for firm members. The goals sought by this automation effort need to be clearly spelled out. One of the major reasons for failure of a technology plan is excessive optimism on the planner's part. Expectations, as well as limitations, must be realistic. In light of this, first-time users should not acquire their system through mail order sources. The need to have access to a vendor for support and any necessary modifications and instruction is of greater value than the discount available through mail order outlets.

Caveat: Prepare for implementation in advance of the firm's busy season so that the stress of a new automated system is not added to the stress of tax season.

Determining configurations

if automating from the beginning, the best approach is to select the applications and software first, and then purchase hardware known to run that software. This will insure that the overall systems put into place will accomplish the desired tasks.

Buying tips

When purchasing software and hardware, always buy at least partially for the future. The needs of users always increase as they discover what can be accomplished. This increased usage will put added stress on the systems unless they have been planned with existing excess capacity or the ability to grow. In some cases, this means buying computers with more memory or disk storage than is needed today. Frequently, purchasing excess capacity is the safest long-term course of action.


Selection of good, mature software is important in any installation, but is especially critical to the first-time user. The new user has a number of issues to contend with; deficient or "buggy" software should not be one of them. The term "software" includes operating systems, application software and utility software. Each plays a vital role in a successful system.

Newly released software: The business of software development is very difficult, and not all software developers are successful. To reduce the risk of an inappropriate selection, be sure to examine the developer's qualifications to see that he has the requisite knowledge and skill to design, write and maintain quality software in a professional and timely manner.

Remember that the software selected will be used in a business, so quality, proper development and enhancement cycles, and company stability are very important. While all users should be especillry careful when choosing newly released software, a good rule of thumb for first-time users is never to buy the first version of anything.

Deferring acquisition of a particular program until the second version will allow difficulties to surface and to be corrected. It will also provide important clues to the speed with which the developer recognizes and corrects a problem. Since "bug-free" software generally does not exist, the developer's interest in, and ability to fix, unexpected problems is very important.

Operating systems

Ideally, the choice of a particular operating system (the collection of programs that make the computer work) should not concern users. Because of the widely differing capabilities of these systems and the need to run a great variety of programs under a single one, however, the issue is very real. A necessary part of the preliminary planning process is to review and select the operating system most capable of running the software planned for use. The best approach is to list the programs planned for use and the specific operating systems required to run each. After the list is made, select the operating system that will run a majority of these programs.

Some software selections may have to be changed to accommodate the operating system of choice, but making the change will result in the selection of a system that can run all the desired software. Also remember that increasing the functionality and flexibility of the operating system will increase the cost of both the software itself and the hardware required to run it.

Selecting operating system versions may be tricky. Different versions have different features, view system memory in different ways and format fixed disks differently. Mixing operating system versions in an office is one sure way to have "unexplainable" problems and program failures. For these reasons, it is very important to keep the versions synchronized.

Current versions and upgrades

Software developers are constantly upgrading and enhancing their products. These new versions often bring increased functionality and more efficient performance. They are usually larger than the versions that existed before, increasing the demands on the computer system's operating speed and memory.

Before upgrading software that is running successfully, make sure that the new program will run on the equipment in use, that the new features are needed and will be used and that the change is worth the cost. The cost to upgrade is measured by the price of the upgrade software itself, the cost of additional equipment that may be required (extra memory, for example), the administrative time actually required to install the upgrade on the firm's computers, the cost to convert work created under the previous version of the program to the new version and the cost of training current users to operate the new version.

Sometimes it makes sense to skip an upgrade because the added features are not needed. But there is a subtle cost associated with this decision. Usually the upgrade price is a small fraction of the retail cost of the new program. If an upgrade is skipped, and the features of a later and even more expensive version are desired, the normally inexpensive upgrade may not be available. In these instances, the full cost of the later version must be paid. This may be considerably more than the cost of both interim upgrades.


By far, the most important process in a computer user's life is backup. Backup refers to the periodic copying of important data and programs to a storage media other than the hard disk on a user's computer. These copies can be safely stored on another disk, diskette or tape, and are available if a problem resulting in the loss of either data or programs on the user's computer occurs.

Backup procedures and frequency can vary a great deal from user to user and from program to program. Some programs contain their own backup routines, while others rely on the user's proper use of the backup routines contained within the operating system itself. Backup may be as simple as making a copy of a file under another name on the disk or diskette normally used. Or it may consist of making a copy of an entire hard disk on either a series of floppy diskettes or on tape.

Hard disk failure is, by far, the most common problem plaguing users. In this situation, a disk fails for one reason or another and the data becomes unreadable. If proper backups have been made on a regular basis, the backup copy of any lost data can be loaded onto the disk of a new machine (or onto the new hard disk installed in the old machine). The data copied from backup may not reflect 100% of the changes made by the user before the disk failure, but it will certainly be better than reentering all of the data.

Disk management utilities

As hard disks grow in size, the tasks of locating and organizing data stored on them increases geometrically. Several hard disk management utilities and recovery programs are available to help users in locating files, scanning data within files, moving files from one place to another on the disk and viewing data without loading the application program that uses the data.

Some of these management programs can even be loaded into memory and left there to be "popped up" at the touch of a key. Hard disks become disorganized from the continued storing and restoring of files that constantly increase in size. As this occurs, these files become fragmented. That is, the information contained within them is not stored together, but is stored at various locations on the disk. This fragmentation results in increased retrieval time, as the disk drive locates and then transfers the data from these various locations.

Programs to optimize a hard disk will reassemble fragmented files, increasing performance. These same utility programs can measure the degree of fragmentation of a disk, thus indicating whether the process is required. They are not expensive and should be run at least monthly. Disk recovery programs and disk "unformatters" are utilities that can help in the data recovery process and are readily available. It is still necessary to back up to protect against mechanical problems and other situations that could make recovery unfeasible.

Computer performance

There are many factors that affect the performance of a computer system. Factors such as the speed of the central processor itself; the speed of transfer between processor and disk; the interaction of the programs; the presence or absence of a math co-processor all affect the performance. The system selected by any given firm should optimize the factors critical to the way that firm practices. A tax practice generally requires a computer with both a fast disk and a fast central processing unit (CPU).


Most computers and programs require some training if the user is to become proficient. Training can take one of several forms; no single method is the best in all situations. Users can also teach themselves (although this method is not particularly efficient).

Many programs come with user manuals that contain tutorial training. Tutorial training uses examples that the user creates while reading the book (or in some cases while listening to an audio tape). These can be supplemented by instructor-led training sessions in which users are taught the software; in other situations video tape is used. Generally, because of the specialized nature of tax processing software, the developer is the best source for training materials and classes.

For more generalized software like spreadsheets, databases and word processors, a variety of companies develop and offer training courses. Local computer retailers can be an excellent source for this type of training. Using this method also has the advantage of getting the people to be trained out of the office. While this can be slightly disruptive, the quality of the training (which is not free) is better if there are no interruptions.

Several types of training exist. There is the initial training when the software is first obtained, designed to introduce the features and operating procedures. The second type of training is for the enhancement of the software, in which the emphasis is on new features and special tips on how to handle the more difficult situations that come up.

There is also the repeated initial training that must be given to new staff people who are hired either to expand the staff or to replace departing employees. This training is critical to the success of the automation effort and is generally welcomed by the new employees.

Understanding hardware

This article is too short to include an in-depth discussion of this area. Suffice it to say that, at a minimum, a 386 cpu with 4mb (four million bytes) of memory and a hard drive with at least 40mb capacity should be considered. However, a 486 cpu with 8mb of memory and a hard drive in the 100+mb range would be preferred. Both 5 1/4" and 3 1/2" disk drives are needed to accommodate all software and data that might be used. At a more advanced stage, CD-ROM should be considered.

Display systems

Displays have evolved rapidly and the newest display type is called VGA (variable graphics array). It produces a picture that is both colorful and sharp. VGA should be considered the minimum standard, since much of the software that is being written will make extensive use of color to communicate with the user.

These new high resolution displays also make possible the use of graphics in the presentation of information. In many cases a graphic presentation is better than a more conventional one, and software developers are now writing programs that take advantage of this fact. These new displays also allow users to run a whole range of new applications (such as desktop publishing).


Because there are so many available types and brands, the selection of a printer is often far more complex than it ought to be. Dot matrix printers are very fast and produce excellent "draft" quality printed material. Letter quality impact printers, on the other hand, produce a much higher quality report, but are slower.

For tax return processing, laser printers (i.e., printers that feed blank paper and use a laser to produce a completed tax return [form and data] at the same time) are the best choice. Users of laser printers for tax return processing should be aware, however, that all laser printers are not alike. The internal languages used by the printers to produce the forms are not the same, and software designed to work with a Brand X laser may not work with Brand Y. Publishers of tax return software can provide information concerning the printers supported by their software; their recommendations should be followed.

Laser printers also make excellent general purpose printers, especially when connected to a Local Area Network (LAN) or a UNIX[C] system. In this environment all users share the laser, thus spreading its functionality and reducing the cost to the firm.

Another way to share a printer among several computers is with a printer sharing device. These relatively simple devices connect several computers to a common printer and route information with a command.


Security is a continuing issue to CPAs. Practitioners have a professional responsibility to protect the confidentiality of their clients' data, since it reflects their financial, business and personal affairs. Often the most effective security is an old-fashioned lock. In this scenario, data is kept on diskettes under lock and key. Data is not kept on computer hard disks and is erased from those hard disks in a special way if it is ever stored there even on a temporary basis.

Unfortunately, this method, while very secure, is also very inconvenient. It is usually easier to leave some of the data on the computer's hard disks, even if it can be inappropriately accessed. In these situations, additional security is needed. Passwords can be used to control access to computers and, in exceptional situations, data files can be encrypted (scrambled). These encrypted files, even if viewed, will produce useless data without the proper code; secure the code and you secure the data.

Controlling access to computers has been a requirement in the mainframe world for years, and with other computers now becoming involved in true data processing uses (like tax return processing), limiting access to these other computers is becoming important as well. Computer rooms with combination locks and supervised access can go a long way toward preventing later problems.

Limiting the access of employees immediately on their termination of employment, and noting behavior that sometimes precedes or signals the existence of other more serious personnel problems, can also go a long way towards reducing the risk. As noted, the existence of off-site backup copies of important programs and sensitive data will help reduce the risk of even the intentional destruction of data by a disgruntled employee.

Disaster planning

Even with the best plans, practitioners occasionally encounter unforeseen difficulties. These may take the form of natural disasters like earthquakes, fires and floods, or involve the interruption of business by civil disturbance, strike or disruption in electrical or other utility service. In these situations, a carefully prepared plan is necessary to get things restored to operating condition.

First, copies of all critical programs and data should be maintained in an up-to-date condition at a site away from the office. This will allow the resumption of operations in a relatively short time should the office become unusable for any reason.

In addition to maintaining the data, plans should be made for an alternate worksite. For a local problem, it may be possible to make reciprocal arrangements with a noncompeting business located nearby.

Arrangements should also be made with someone located even farther away (perhaps a firm office located in a distant city) in the event of a more widespread disaster. Consideration should also be given to negotiating a standby rental arrangement for the required equipment, or to keeping one or more portable computers at a secure location. To be successful, do not wait until the disaster occurs. At that point, there will be many unprepared people, all in the pursuit of very scarce computer resources. Adequate consideration should be given to identifying the key personnel required to run the systems in the event of a disaster, and to the establishment of a set of procedures that will be used for business operations.

Plans for communication should be made and distributed well in advance. In disaster situations, communication systems may be badly overburdened, and making even a simple call to staff letting them know where to go or what to do may not be possible.
COPYRIGHT 1993 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Author:Love, Jerry L.
Publication:The Tax Adviser
Date:Jul 1, 1993
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