Finding qualified employees is getting harder in the tax and accounting industry. You can either reduce your number of clients, outsource, or increase automation to deal with an employee shortage. Gruntworx is a powerful tool automating much of the preparation data entry process, reducing workload and allowing current employees to get more done. Focusing on value added parts of tax preparation (review and consulting) reduces stress and increases profits.
My tax office has used GruntWorx for over 5 years. I also tested domestic and foreign outsourcing. All outsourcing has been a disappointment and expensive. I have used multiple automation processes, some still in the testing phase. Technology has come a long way, but there are still issues to consider. GruntWorx has done the best work for my firm. While I endorse the product, you need to be aware of its limitations.
GruntWorx doesn’t work on all tax software.
It works with: Drake Software (used in my office), UltraTax CS, Intuit Lacerte and two products from CCH (Axcess and ProSystem FX). If you are not using tax software on the list, GruntWorx does not work at this time. It also does not work with online DIY preparation such as TurboTax or 1040.com, a product of Drake Software.
Cost: GruntWorx is economical, especially when using the LITE products. They also have discounts if you buy early in the year.
Depending how you organize your office, more advanced services cost a bit more. In my office we find it practical to use either Populate or Populate LITE. The reasoning is simple. Sorting documents is nice, but my staff is good at scanning things in an acceptable manner. What I want is the results of the scanned documents inserted right into my client’s tax file within the software. Populate LITE is very low cost and we use this for basic returns. A quick review finishes the return. Populate works nicely with all tax returns as it is validated, meaning reduced errors.
Before you use GruntWorx you need to decide how to handle clients with large numbers of trades. Day traders can get expensive with GruntWorx and I personally think the additional work is unnecessary in many cases. Remember, you can scan and attach trade details to a return. Entering thousands of crypto or stock trades seems a bit excessive to this accountant. Bottom line numbers on the return with attached details is an efficient process.
However, the Trade Details and Trade Summary features are valuable tools in certain instances. If some trades don’t list a cost basis additional work is needed before attaching to the return. If the client’s trading volume is small manual entry is still an option. However, with a large number of trades, Trade Details bring the data to an Excel worksheet where you can sort and update the information (add cost basis or any other adjustments) before scanning and attaching to the return.
Turnaround Time: The LITE products usually have a fast turnaround time. Many times results are same day. As tax season progresses turnaround time does slow. More in Disadvantages below.
Security and Compliance: GruntWorx is §7216 compliant. They also completed the AICPA’s Statement on Standards for Attestation Engagements Number 18 (SSAE 18) SOC 1 Examination Type 2.
SSAE 18 is a quality standard protecting client information at every level. High levels of security are required since sensitive data is handled by tax offices. Clients may worry about their personal information and for good reason. Securing data in your office, when e-filing, and when preparing a return is vital to the health of your firm. A data breech can irreparably destroy a firm’s reputation. You can read more about GruntWorx’s SSAE18 compliance and the advantages in brings here.
Section 7216 should not be overlooked either. Many tax firms, especially larger firms, are outsourcing tax work outside the U.S. Even online DIY tax software sometimes allows client data to be accessed outside the U.S. Yes, the firm needs to disclose these details, but it too easily gets buried in paperwork client’s rapidly sign. There are serious risks when outsourcing outside the U.S. It is an advantage that GruntWorx keeps everything in the U.S. and inside their secure system. You don’t want to deal with a data breech that isn’t even your fault.
Forms Covered: The list of forms covered by GruntWorx automation is extensive and growing. This link is a list of forms covered when using Drake Software.
Note that certain items are not covered. GruntWorx does bookmark many items, but places handwritten notes on a separate tab without bookmarks. The same for supporting documents. Important forms (W-2s, 1099s, K-1s, 1098s, etc.) are populated for importing into the client’s tax software file.
Another nice feature of GruntWorx is that forms for entities are now also populated. The GruntWorx automation process works for almost every return in your office.
State Information: State information frequently does not populate. W-2s are usually fine, but K-1 state info is not populated.
Accuracy: GruntWorx is very accurate. Sometimes numbers people can’t read on poor document copies are read by GruntWorx. However, review of every GruntWorx return is required! (You should be doing this anyway.) Sometimes 5s are entered as 8s. There are a few times where we found a form entered twice. You will learn GruntWorx nuances as you use the service. And they are getting better every year.
Another matter that isn’t an error, but a matter of preference: 1098 mortgage interest is entered on the 1098 screen. If you prefer direct Schedule A entry you will need to assure data isn’t entered twice or missed.
Turnaround Time: Speed is both an advantage and disadvantage, depending on the time of tax season.
Early tax season GruntWorx is humming. Many accounts sent to GruntWorx are finished within a few hours. As due dates approach turnaround time slows to a crawl and becomes the bottleneck, taking days or longer to get the finished work back. This may lead to more extensions for clients bringing in work just before a due date.
As a result of the turnaround time issue, my biggest GruntWork complaint, we limit use near due dates and never use when the extension due date nears. More work goes to GruntWorx early in the season, keeping preparers fresh. Later in the tax season we send fewer (and unfortunately when we are busiest) returns because they take so long. Sometimes we even pull back a return (GruntWorx does not charge when we do this) just to get the return to the client in a timely manner.
Verdict on GruntWorx
GruntWorx has been a part of my practice for a number of years and will continue to be. They keep adding more forms that they organize and populate, errors seem to be declining (never a big issue) and I expect the turnaround times will keep improving.
GruntWorx is a low-cost productivity tool every tax office needs to use. It is the only way to get things done and keep your sanity. This gives you time to work with your client on important matters. All this is good for profits.
You can visit the GruntWorx site here.
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