It in accountancy practices

Transcription

1 It in accountancy practices survey report 2011 Business with confidence icaew.com

2 Foreword How was the transition to Inline XBRL for you? And how is it going now? These are some of the topical questions that we added to this year s IT in Accountancy Practices survey. They are topical, of course, because 2011 is the year in which ixbrl electronic format became mandatory for most accounts submitted with company tax returns to HMRC. Over the past couple of years the IT Faculty has been receiving a steady stream of enquiries from members and member firms about software issues concerning XBRL and ixbrl. In response to this, we provided lots of training and guidance which, we believe, has paid off. It is encouraging to report that things are settling down: the IT in Accountancy Practices survey shows that the proportion of accountancy firms still finding the new software and processes difficult or extremely difficult is only 13 and they are far outweighed by the 53 who are finding it easy or extremely easy. Not, I hasten to add, that we can ignore the needs of the minority! This is a good illustration of why we carry out this survey: in order to serve our members better, we need a sound, objective view of where they stand on current IT issues. Another reason is that the report is useful to firms that are selecting new or replacement software and want to know what is available in the market and what users of a particular product think of it. Needless to say, the software suppliers themselves find this report useful as well. This is the seventh time the IT Faculty has carried out this research since The method and approach and many of the questions have remained constant, allowing us to identify key shifts in use and opinions about accountancy software. We hope this report will, once again, be as useful as it is interesting. Paul Booth Technical & Development Manager IT Faculty 2

3 Contents Executive Summary 4 Use of IT in accountancy practices 6 Accounts Production software 8 Bookkeeping software 10 Payroll software 12 Company Secretarial software 14 Personal Taxation software 16 Corporation Tax software 18 Practice Management software 20 Cloud working 23 Main software providers at a glance 24 ixbrl and filing to Companies House 28 Home and mobile working 30 It in accountancy practices survey report

4 Executive summary Overall, there has been movement in the accountancy software market since our last survey conducted in 2007: use of accountancy software has risen, although the incidence of practices offering specific services still exceeds specialist software use, especially among sole practitioners and single partner firms. Accounts Production and Personal Tax software is most widely used, with Payroll and Corporation Tax software also used by just over two thirds of practices. The markets for each category of accountancy software vary by brand dominance and performance. But in general there is brand consolidation in some categories in terms of market penetration and share for IRIS and Sage, while there are also challenges from niche players with strong performance ratings. Within the Accounts Production category, IRIS strengthens its market lead position. However, their mid-sized customer base may be challenged by increased market penetration from VT Final Accounts, which is also standout performer across all aspects of product and service performance. With little change in the Bookkeeping market, Sage 50 Accounts maintains its stronghold. VT Transaction+, although a smaller user base, performs well in all product and service dimensions. There is no clear brand dominance in the Payroll market and Sage 50 Payroll penetration has decreased, although it still retains its lead brand position. Moneysoft Payroll Manager presents a challenge to the market leader with positive change in market penetration, high performance scores and a zero business critical failure rate. IRIS Company Secretarial consolidates its top market position in Company Secretarial software. There is also an increase in market share for BHIS PC Share Register Plus but little differentiation between the two products in performance. Where Company Secretarial information, such as annual returns and changes to company details are filed, this is most often via the Companies House WebFiling facility. IRIS Personal Tax and Digita Personal Tax record good Personal Taxation market share growth with IRIS holding its lead position and CCH losing ground. CCH s market coverage includes legacy products, PerTax, Taxpoint and the new CCH Personal Tax, but all three CCH products are rated below average for performance. Among the Corporation Tax software brands, IRIS maintains its lead position but shows declining market penetration against a Sage Corporation Tax/ Corporation Tax Lite increase; Sage also shows some improvement in performance, although ratings remain relatively low. There has been an increased reported business critical failure rate for CCH Corporation Tax (CorTAX) and its market share has decreased. Practices using Practice Management software tend to use a full service package, rather than any stand-alone software for Time and Fees, Document Management or Customer Relationship Management. IRIS Practice Management retains its market lead and records an increase in market share along with CCH Practice Management and Sage Practice Solution. CCH Practice Management partly recovers the drop in market share for CCH Practice Management (VPM), while Star Practice Management also records a decline in market share. Sage Practice Solution is the weakest performer, although all Practice Management software tend to be rated lower than software in other categories. 4

5 Just one in twenty practices use specialist ixbrl tagging software, as most other practices ixbrl file generation is managed by their existing Accounts Production and/or Corporation Tax software. More generally on the change to ixbrlenabled software and processes, there is a mixed picture. A sizeable minority (26) found the transition difficult, including 11 who found it extremely difficult, but a similar proportion (32) found it easy or extremely easy. Once the transition has been made, the situation is improved, but there are still 13 who are experiencing some difficulty in running the new ixbrl-compliant systems or processes, mainly in relation to the extra time spent on producing ixbrl files. Home and mobile working: The majority (64) of sole practitioners and small firms with one partner do not use remote access, but for firms with two to six partners this drops to 39. Traditional hardware (laptop or desktop PC) is generally used for remote access, but almost one in five practices gain remote access to files via smartphones, and 6 use handheld tablets. New technologies have so far had limited impact on the accountancy profession, with only a handful of firms using mobile apps for smartphones. Cloud working: There is currently little cloud software ( Software as a Service SaaS) available for mainstream practice software functions such as Accounts Production, Practice Management and Tax, but there are many SaaS bookkeeping products. Nevertheless, we found only 3 of practices using cloud bookkeeping software. It in accountancy practices survey report

6 Use of IT in accountancy practices Software Application Trends In most cases, the incidence of offering specific services exceeds use of specialist software, particularly for Company Secretarial where software is used by only 18 of practices despite 58 of firms providing these services. Firms least likely to use specialist software tend to be sole practitioners and small practices, who are using general office software packages for these purposes. Use of accountancy practice software has risen significantly between 2007 and 2011 for Corporation Tax, Accounts Production and Personal Tax. The exceptions to this trend are Payroll, Bookkeeping and Company Secretarial services, where there has been no change. Chart 1 Service offering and software use Accounts Production Personal Taxation Payroll Corporation Tax Bookkeeping Company Secretarial Provide service to clients 2011 Use software 2007 Use software 2011 Base: all respondents, weighted (700) 6

7 A third of firms (34) use Practice Management solutions, an increase on Over the same period, there has been a drop in the use of separate Time and Fees software. Chart 2 Use of Practice Management solutions Practice Management (Total) Separate Time and Fees Separate Document Management 6 8 Separate Customer Relationship Management Use software 2011 Use software 2007 Base: all respondents, weighted (700) Software product analysis The following sections provide an in-depth analysis of software products within each application category. Market penetration and an estimated market share of each product used are discussed, together with a comparative analysis of product performance. is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms; the factors applied to calculate market share are the same as 2007 to allow valid year-on-year comparisons. Market penetration is defined as the number of practices or offices using each product. Market share It in accountancy practices survey report

8 Accounts Production software Market penetration and share IRIS consolidates market share in Accounts Production software IRIS Accounts Production has strengthened its position as market leader: while IRIS market penetration has remained static, their increase in market share reflects their increased customer base among mid-sized practices. VT Final Accounts has increased its market penetration. Digita, which was relatively new in the accounts production field at the time of our last report, has made gains from a small base, but CCH (VAP) and Sage (SAP) Accounts Production have seen some decreases. In the case of CCH, the situation is complicated by consolidation in the market. In 2007, the product now described as CCH Accounts Production (VAP) was Viztopia Accounts Production and was owned by MYOB. CCH now has three accounts production products: two of them legacy products (the former Viztopia and the former PROcap) and a new product of its own. Although this survey suggests relatively small take-up of the new product, it is likely that some of the decline in VAP market share is due to transfer to the new product. IRIS Accounts Production and Sage Accounts Production (SAP) are used by a broad mix of practice sizes whereas Caseware is predominantly used in larger firms (seven or more partners). VT Final Accounts is predominantly used by small and medium sized practices (one to six partners). Chart 3 Accounts Production software market penetration and share Market Penetration Market Share IRIS Accounts Production IRIS Accounts Production VT Final Accounts Sage Accounts Production Advanced (SAPA) Sage Accounts Production (SAP) CCH Accounts Production (VAP) Sage Accounts Production Advanced (SAPA) 9 9 Caseware 10 6 CCH Accounts Production (VAP) 6 9 Sage Accounts Production (SAP) 9 16 Digita Accounts Production (Thomson Reuters) 6 1 Digita Accounts Production (Thomson Reuters) Caseware 4 2 VT Final Accounts 8 7 Word/Excel 3 2 CCH Accounts Production (PROcap) 2 n/a PTP Accounts Production (IRIS) 2 n/a PTP Accounts Production (IRIS) 1 n/a Absolute Accounts 2 n/a Word/Excel 1 3 Bookkeeping package 1 2 Other Accounts Production software 1 3 CCH Accounts Production (PROcap) 1 n/a Absolute Accounts 1 n/a Other Accounts Production software 1 6 Bookkeeping package <1 2 Compac Accounts (Keytime) 1 n/a Compac Accounts (Keytime) <1 n/a Keytime Accounts Production 1 n/a Pinnacle Accounts (RFA) <1 n/a Pinnacle Accounts (RFA) 1 n/a Keytime Accounts Production <1 n/a Base: all respondents using Accounts Production software, weighted (519) Products with at least four users shown only. Market Penetration is the number of practices or offices using each product. Market Share is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms. n/a indicates no data included in the 2007 report. a gain of five or more percentage points from 2007 a loss of five or more percentage points from

9 Chart 4 Accounts Production software brand share by number of partners Weighted Base VT Final Accounts Sage Accounts Production (SAP) IRIS Accounts Production Digita Accounts Production (Thomson Reuters) Sage Accounts Production Advanced (SAPA) CCH Accounts Production (VAP) Caseware No. of partners Note: weighted data shown for all brands with 30 or more users in the unweighted sample Performance VT Final Accounts performance rated highest VT Final Accounts is the standout performer across all dimensions and has pulled ahead of IRIS as the best performing package since VT has improved in overall total score and, in particular, has a 0 business critical failure rate in Caseware also performs well in this category, with all users stating they would recommend the software to others. Digita Accounts Production is the weakest performer on all product and service dimensions, barring quality of initial service, and almost one in five customers have experienced a business critical failure in the last two years. This is reflected in the relatively low propensity of customers to recommend (69) and a relatively high likelihood to replace the software in the next 12 months (18). Neither Sage product performs particularly well, especially SAPA, with one in four users planning to replace it in the next 12 months. Chart 5 Accounts Production brand performance scorecard Overall score/ rating Caseware CCH Accounts Production (VAP) Digita Accounts Production (Thomson Reuters) IRIS Accounts Production Sage Accounts Production (SAP) Sage Accounts Production Advanced (SAPA) VT Final Accounts n= 584 (553) 32 (30) 50 (72) (166) 66 (103) 62 (55) 79 (51) Total score (max 100) 82 (80) 85 (78) 80 (79) (85) 78 (73) 77 (74) 89 (84) Performance Reliability Ease of use Initial service Ongoing support Business critical failure 9 (7) 3 (10) 8 (6) 18 8 (7) 12 (5) 15 (11) 0 (6) Would recommend 87 (83) 100 (60) 86 (88) (92) 82 (83) 76 (75) 94 (94) Plans to replace in next 12 months Base: all brands with at least 30 users, unweighted, main and boost samples as shown Results from 2007 have been added where available (in brackets) positive difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating negative Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

10 Bookkeeping software Market penetration and share Sage 50 retains dominance in the Bookkeeping software market With very little change in the Bookkeeping software market since 2007, Sage 50 Accounts has maintained its stronghold and has increased its penetration to 59. Intuit Quickbooks has a mixed user base by practice size, while VT Transaction+ is predominantly used by smaller firms (60 are sole practitioners or single partner practices) and Sage 50 Accounts more frequently used in larger practices (66 of firms with 7+ partners). Chart 6 Bookkeeping software market penetration and share Market Penetration Market Share Sage 50 Accounts Sage 50 Accounts Intuit Quickbooks 9 9 Intuit Quickbooks 5 4 VT Transaction+ 8 5 Accounts production package 5 6 Other Bookkeeping software 4 4 Sage Instant Accounts 3 3 Accounts production package 4 5 VT Transaction+ 3 2 Sage Instant Accounts 4 4 Other Bookkeeping software 2 3 TASBooks 4 6 TASBooks 1 2 Excel 3 3 IRIS Accounts Office 1 2 Xero 2 n/a Xero 1 n/a IRIS Accounts Office 1 2 Excel 1 1 Base: all respondents using Bookkeeping software, weighted (389) Products with at least four users shown only. Market Penetration is the number of practices or offices using each product. Market Share is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms. n/a indicates no data included in the 2007 report. a gain of five or more percentage points from 2007 a loss of five or more percentage points from Chart 7 Bookkeeping software brand share by number of partners Weighted Base VT Transaction Intuit Quickbooks Sage 50 Accounts No. of partners Note: weighted data shown for all brands with 30 or more users in the unweighted sample 10

11 Performance VT Transaction+ has a small customer base with high satisfaction VT Transaction+ stands out as the highest performer, with strong scores across all dimensions: although a small user base, those few who use this software are particularly positive, with 100 recommendation levels. While Intuit Quickbooks performs relatively well in product aspects, it is let down by the ratings for quality of initial and ongoing service performance. Chart 8 Bookkeeping brand performance scorecard Overall score/rating Intuit Quickbooks Sage 50 Accounts VT Transaction+ n= 492 (453) 33 (32) 325 (274) 31 Total score (max 100) 81 (78) 81 (80) 80 (76) 95 Performance Reliability Ease of use Initial service Ongoing support Business critical failure 4 (6) 3 (0) 5 (9) 3 Would recommend 93 (86) 91 (88) 92 (88) 100 Plans to replace in next 12 months Base: all brands with at least 30 users, unweighted, main and boost samples as shown Results from 2007 have been added where available (in brackets) positive difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating negative Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

12 Payroll software Market penetration and share Sage 50 Payroll and IRIS PAYE-Master s hold on market penetration falls Although the market penetration for Sage 50 Payroll has decreased, it retains its lead brand position for Payroll software. IRIS PAYE-Master also shows a large drop in penetration, which is doubtless a consequence of the dramatic fall in that product s satisfaction rating in 2007: PAYEMaster had high ratings before 2007, both under IRIS s ownership and previously, but satisfaction plummeted because of a serious problem caused by an upgrade shortly before our last survey in Moneysoft Payroll Manager shows a positive change in penetration and share, the biggest increase in the market for payroll software. Moneysoft Payroll Manager and TASPayroll are more prevalent among the smaller firms. By comparison Star Payroll Professional s users are mainly based in larger firms. Chart 9 Payroll software market penetration and share Market Penetration Market Share Sage 50 Payroll Sage 50 Payroll IRIS PAYE-Master Star Payroll Professional Moneysoft Payroll Manager 9 2 IRIS Payroll Professional 8 5 Other Payroll Software 9 8 IRIS PAYE-Master 8 11 Star Payroll Professional 6 4 Other Payroll Software 7 6 TASPayroll 6 5 Superpay 4 9 IRIS Payroll Professional 6 5 Sage (product unknown) 4 n/a Superpay 3 4 Moneysoft Payroll Manager 4 0 Sage Instant Payroll 3 2 Sage Instant Payroll 3 1 Sage (product unknown) 2 n/a TASPayroll 2 3 QTAC Payroll Professional 2 3 Mitrefinch Flexipay 1 n/a HMRC Software 1 n/a QTAC Payroll Professional 1 1 Keytime Payroll (Bureau) 1 n/a Quickbooks Payroll 1 1 Quickbooks Payroll 1 2 Keytime Payroll (Bureau) <1 n/a Mitrefinch Flexipay 1 n/a HMRC Software <1 n/a Base: all respondents using Payroll software, weighted (474) Products with at least four users shown only. Market Penetration is the number of practices or offices using each product. Market Share is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms. n/a indicates no data included in the 2007 report. a gain of five or more percentage points from 2007 a loss of five or more percentage points from

13 Chart 10 Payroll software brand share by number of partners Moneysoft Payroll Manager TASPayroll IRIS PAYE-Master Sage 50 Payroll IRIS Payroll Professional Superpay Star Payroll Professional Weighted Base No. of partners Note: weighted data shown for all brands with 30 or more users in the unweighted sample Performance Moneysoft Payroll Manager rated highly Overall, all Payroll software packages perform well, though Moneysoft Payroll Manager is the standout performer and has a zero business critical failure rate, high customer advocacy (96) and low likelihood that the software will be replaced in the next 12 months. Superpay was the top scoring product in Although showing average scores this year, a quarter of Superpay users plan to replace their product and likelihood to recommend has dropped from 91 in 2007 to 74 in Unusually, even for four years ago, it is a DOS-based (as distinct from Windows) product. A possible explanation for its declining user-base and even greater number of users planning to abandon it in the next 12 months is that, despite its continuing high rating, the product is reaching the end of its natural life. TASPayroll shows a high business critical failure rate (17). Chart 11 payroll brand performance scorecard Overall score/ rating IRIS PAYE- Master IRIS Payroll Professional Moneysoft Payroll Manager Sage 50 Payroll Star Payroll Professional Superpay TASPayroll n= 620 (542) 68 (94) 40 (43) (188) 60 (42) 31 (34) 30 (31) Total score (max 100) 85 (80) 84 (75) 84 (78) (81) 84 (78) 85 (88) 84 (80) Performance Reliability Ease of use Initial service Ongoing support Business critical failure 3 (11) 4 (34) 5 (16) 0 4 (4) 2 (10) 0 (3) 17 (6) Would recommend 89 (83) 94 (70) 78 (81) (74) 87 (74) 74 (91) 83 (90) Plans to replace in next 12 months Base: all brands with at least 30 users, unweighted, main and boost samples as shown Results from 2007 have been added where available (in brackets) positive difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating negative Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

14 Company Secretarial software Market penetration and share IRIS Company Secretarial consolidates market penetration and share position With growth since 2007, IRIS Company Secretarial has strengthened its market penetration and share. Digita Company Secretarial suffers a drop in penetration (down to 8 from 14 in 2007), while BHIS PC Share Register Plus benefits from a notable increase in market share. Smaller firms show a greater tendency towards IRIS Company Secretarial software than towards BHIS PC Share Register Plus. Chart 12 Company Secretarial software market penetration and share Market Penetration Market Share IRIS Company Secretarial IRIS Company Secretarial BHIS PC Share Register Plus 10 9 ICSA Blueprint ICSA Blueprint BHIS PC Share Register Plus 13 8 Digita Company Secretarial 8 14 Digita Company Secretarial Jordans PCSec 7 7 Jordans PCSec 9 11 Sage Company Secretarial 6 n/a Sage Company Secretarial 4 n/a Other Company Secretarial software 4 11 Other Company Secretarial software 2 10 PTP Company Administration (IRIS) 4 n/a PTP Company Administration (IRIS) 2 n/a Base: all respondents using Company Secretarial software, weighted (169) Products with at least four users shown only. Market Penetration is the number of practices or offices using each product. Market Share is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms. n/a indicates no data included in the 2007 report. a gain of five or more percentage points from 2007 a loss of five or more percentage points from Chart 13 Company Secretarial software brand share by number of partners Weighted Base IRIS Company Secretarial BHIS PC Share Register Plus No. of partners Note: weighted data shown for all brands with 30 or more users in the unweighted sample 14

15 Performance Little difference in product performance User performance ratings are good, but not as high in this category as others and with little differentiation between the two key products. Chart 14 Company secretarial performance scorecard Overall score/ rating BHIS PC Share Register Plus IRIS Company Secretarial n= Total score (max 100) Performance Reliability Ease of use Initial service Ongoing support Business critical failure Would recommend Plans to replace in next 12 months Base: all brands with at least 30 users, unweighted, main and boost samples as shown Results from 2007 have been added where available (in brackets) positive difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating negative Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. Filing Company Secretarial information The majority of practices use the Companies House WebFiling facility to file Company Secretarial information. Almost one in five firms use their Company Secretarial software to file (possibly in addition to Companies House WebFiling) while a quarter submit information on paper. Those firms using their Company Secretarial software to submit information are most likely to file annual returns (94) or changes of company details (94) via this method. Around two thirds (69) also notify Companies House of any new company incorporations, with a quarter of these firms using their Company Secretarial software to manage this, while the remaining majority use a formation agent. Chart 15 Method of filing Company Secretarial information Via WebFiling 85 On paper 24 Using your Company Secretarial software 18 We don t file at Companies House Base: all respondents providing company secretarial services to clients, weighted (406) It in accountancy practices survey report

16 Personal Taxation software Market penetration and share IRIS Personal Tax boosts its market share IRIS Personal Tax remains the most prevalent brand in this category, increasing its market share since As with its accounts production product, IRIS increased market share reflects a shift of emphasis in their user base from smaller to medium-sized practices. Digita Personal Tax shows good market share growth. Both of CCH s legacy products, PerTax and Taxpoint, record market share declines, although to some extent this probably reflects the introduction of the new CCH Personal Tax. There is a clear picture of TaxCalc and Drummohr Tax Assistant being favoured by smaller practices, while the CCH products are most frequently used by the largest firms. Chart 16 Personal tax software market penetration and share Market Penetration Market Share IRIS Personal Tax IRIS Personal Tax PTP TaxReturn CCH Personal Tax (PerTax) Sage Personal Tax 11 9 Digita Personal Tax (Thomson Reuters) 14 7 Digita Personal Tax (Thomson Reuters) 9 6 Sage Personal Tax 9 8 TaxCalc 6 4 PTP TaxReturn 9 7 CCH Personal Tax (PerTax) 6 7 CCH Personal Tax (new product) 7 n/a Keytime Tax Professional 5 n/a CCH Personal Tax (Taxpoint) 6 11 CCH Personal Tax (new product) 3 n/a TaxCalc 2 1 CCH Personal Tax (Taxpoint) 3 6 Keytime Tax Professional 2 n/a Forbes ProTax 3 4 Drummohr Tax Assistant 1 3 Drummohr Tax Assistant 2 5 Forbes ProTax 1 2 Other Personal Taxation software 2 2 Other Personal Taxation software 1 1 Absolute Tax 2 n/a Absolute Tax <1 n/a HMRC 1 n/a HMRC <1 n/a FTax 1 n/a FTax <1 n/a Base: All respondents using Personal Taxation software, weighted (649) Products with at least four users shown only. Market Penetration is the number of practices or offices using each product. Market Share is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms. n/a indicates no data included in the 2007 report. a gain of five or more percentage points from 2007 a loss of five or more percentage points from

17 Chart 17 Personal Tax software brand share by number of partners Weighted Base TaxCalc Drummohr Tax Assistant PTP TaxReturn Sage Personal Tax IRIS Personal Tax Digita Personal Tax (Thomson Reuters) CCH Personal Tax (Taxpoint) CCH Personal Tax (PerTax) CCH Personal Tax (new product) No. of partners Note: weighted data shown for all brands with 30 or more users in the unweighted sample Performance New CCH Personal Tax fails to boost user recommendations There is clear differentiation between Personal Tax software products: IRIS products perform well, as does Drummohr Tax Assistant (another product now owned by IRIS), but one in five Drummohr Tax Assistant users plan to replace this product in the next 12 months. CCH products fall below the market average and the introduction of a new CCH Personal Tax product is reflected in a reduced likelihood to recommend the older products. The new CCH Personal Tax suffers from poor performance scores and a relatively low endorsement rate (80 compared with over 90 for some brands). As might be expected, given that users have only relatively recently acquired it, a much smaller proportion of the new CCH Personal Tax product is planning to replace it in the next 12 months compared with CCH Personal Tax (Taxpoint). More than one in ten PTP TaxReturn users reported a business critical failure in the last two years, despite average performance scores. Chart 18 Personal Tax performance scorecard Overall score/ rating CCH Personal Tax (PerTax) CCH Personal Tax (Taxpoint) CCH Personal Tax (new product) Digita Personal Tax (Thomson Reuters) Drummohr Tax Assistant IRIS Personal Tax PTP TaxReturn Sage Personal Tax TaxCalc n= 690 (568) 74 (76) 30 (41) (34) 30 (35) 190 (159) 70 (65) 65 (46) 36 Total score (max 100) 84 (84) 80 (84) 77 (80) (88) 89 (90) 86 (86) 86 (91) 81 (76) 91 Performance Reliability Ease of use Initial service Ongoing support Business critical failure 2 (6) 5 (1) 7 (2) 10 3 (0) 0 (0) 4 (3) 13 (0) 9 (13) 3 Would recommend 89 (90) 76 (93) 67 (90) (94) 90 (100) 96 (95) 87 (97) 86 (80) 100 Plans to replace in next 12 months Base: all brands with at least 30 users, unweighted, main and boost samples as shown Results from 2007 have been added where available (in brackets) positive difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating negative Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

18 Corporation Tax software Market penetration and share IRIS retains market lead IRIS Business Tax continues its market lead but has experienced a fall in penetration since 2007, while Sage Corporation Tax or Corporation Tax Lite shows an upward shift in penetration. There is little change in market share, apart from a decline for CCH Corporation Tax (CorTAX) and an improvement for Digita Corporation Tax. Most products are used by practices of all sizes, although some brands are favoured more by the smaller firms (such as TaxCalc Business or Business Plus) and others are more prevalent in the larger firms, notably TCSL Alphatax where 97 of users are based in firms with seven or more partners. Chart 19 Corporation tax software market penetration and share Market Penetration Market Share IRIS Business Tax IRIS Business Tax PTP CT Platform TCSL Alphatax Sage Corporation Tax / Corporation Tax Lite 13 8 Sage Corporation Tax / Corporation Tax Lite 12 9 Digita Corporation Tax (Thomson Reuters) 8 5 CCH Corporation Tax (CorTAX) TaxCalc Business Or Business Plus 5 2 Digita Corporation Tax (Thomson Reuters) 10 4 TCSL Alphatax 5 4 PTP CT Platform 8 6 CCH Corporation Tax (CorTAX) 5 6 TaxCalc Business or Business Plus 2 1 Keytime Corporation Tax 3 3 Keytime Corporation Tax 1 1 Absolute Tax 3 n/a Other Corporation Tax software 1 1 Other Corporation Tax software 3 4 Forbes ProTax CTSA 1 n/a Forbes ProTax CTSA 3 4 Drummohr Tax Company Tax 1 3 Drummohr Tax Company Tax 2 5 Absolute Tax 1 n/a CCH Taxmaster 1 4 CCH Taxmaster 1 3 FTax 1 n/a HMRC <1 n/a HMRC 1 n/a FTax <1 n/a Base: all respondents using Corporation Tax software, weighted (519) Products with at least four users shown only. Market Penetration is the number of practices or offices using each product. Market Share is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms. n/a indicates no data included in the 2007 report. a gain of five or more percentage points from 2007 a loss of five or more percentage points from

19 Chart 20 Corporation Tax software brand share by number of partners Weighted Base TaxCalc Business or Business Plus PTP CT Platform Sage Corporation Tax / Corporation Tax Lite IRIS Business Tax Digita Corporation Tax (Thomson Reuters) CCH Corporation Tax (CorTAX) TCSL Alphatax No. of partners Note: weighted data shown for all brands with 30 or more users in the unweighted sample Performance Generally good performance across all brands, but CCH and Sage lag Performance scores are relatively good for most products, with little deviation from the category average. However, there has been an increase in CCH Corporation Tax (CorTAX) business critical failures since Sage Corporation Tax or Corporation Tax Lite, although still relatively low in performance scores, shows some improvement since 2007 for the total performance score and likelihood to recommend. Chart 21 Corporation tax performance scorecard Overall score/ rating CCH Corporation Tax (CorTAX) Digita Corporation Tax (Thomson Reuters) IRIS Business Tax PTP CT Platform TaxCalc Business or Business Plus TCSL Alphatax Sage Corporation Tax/ Corporation Tax Lite n= 600 (472) 56 (49) (158) 63 (45) (33) 75 (37) Total score (max 100) 83 (83) 78 (78) (86) 83 (88) (83) 78 (71) Performance Reliability Ease of use Initial service Ongoing support Business critical failure 5 (3) 9 (0) 4 3 (1) 5 (2) 7 2 (0) 0 (8) Would recommend 85 (84) 84 (86) (94) 83 (93) (82) 79 (62) Plans to replace in next 12 months Base: all brands with at least 30 users, unweighted, main and boost samples as shown Results from 2007 have been added where available (in brackets) positive difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating negative Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

20 Practice Management software Market penetration and share IRIS maintains its position as market leader Since 2007 there have been shifts in the Practice Management software market share and penetration. IRIS Practice Management retains its lead, with an increase in share since Sage Practice Solution has improved penetration and share, but still lags IRIS Practice Management. Digita Practice Management was launched in 2006 and breaks into the market with penetration among one in twenty practices. CCH Practice Management (VPM) market share has dropped significantly (from a quarter in 2007 to less than one in ten in 2011), but this has been partly recovered by CCH Practice Management, which has jumped from 1 market share to 10. Few sole practitioners and single partner practices use dedicated Practice Management software, and the user market is predominantly composed of larger firms. The brands form into two groups: those that are prevalent among all practice sizes, and those that are more commonly used in larger firms, such as CCH Practice Management and Practice Engine. Chart 22 Practice management software market penetration and share Market Penetration Market Share IRIS Practice Management IRIS Practice Management Sage Practice Solution 13 4 Practice Engine CCH Practice Management (VPM) CCH Practice Management 10 1 Other Practice Management software 8 9 Star Practice Management 9 17 Star Practice Management 7 9 CCH Practice Management (VPM) 8 23 Digita Practice Management (Thomson Reuters) 5 <1 Sage Practice Solution 8 3 CCH Practice Management 5 2 APS Advance Practice Management 7 4 Practice Engine 4 4 Other Practice Management software 5 10 APS Advance Practice Management 3 2 Bespoke or Word/Excel etc 3 2 Bespoke or Word/Excel etc 2 3 Digita Practice Management (Thomson Reuters) 1 < Base: all respondents using Practice Management software, weighted (291) Products with at least four users shown only. Market Penetration is the number of practices or offices using each product. Market Share is an estimated adjustment of market penetration to account for multiple licences of one product in larger firms. n/a indicates no data included in the 2007 report. a gain of five or more percentage points from 2007 a loss of five or more percentage points from

21 Chart 23 Practice Management software brand share by number of partners Weighted Base Sage Practice Solution IRIS Practice Management CCH Practice Management (VPM) CCH Practice Management Practice Engine No. of partners Note: weighted data shown for all brands with 30 or more users in the unweighted sample Performance Sage Practice Solution receives lower than average performance scores In general, Practice Management software performance tends to be rated lower than software in other categories. Within this category, Sage Practice Solution is the weakest performer, with relatively low recommendation levels and a higher than average proportion of users planning to replace this product in the next 12 months. Although business critical failure rates have improved since 2007 for CCH Practice Management (VPM), the newer CCH Practice Management software has not taken this improvement any further. Practice Engine is used by relatively few firms, but its users rate it highly for reliability and initial service, which doubtless contributes to its recommendation level of 83. Chart 24 Practice Management performance scorecard Overall score/rating CCH Practice Management CCH Practice Management (VPM) IRIS Practice Management Practice Engine Sage Practice Solution n= 369 (267) (51) 116 (81) Total score (max 100) 76 (77) (77) 79 (78) Performance Reliability Ease of use Initial service Ongoing support Business critical failure 6 (7) 11 8 (18) 2 (6) 3 5 Would recommend 73 (75) (76) 84 (83) Plans to replace in next 12 months Base: all brands with at least 30 users, unweighted, main and boost samples as shown Results from 2007 have been added where available (in brackets) positive difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating negative Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

22 Specialist Practice Management software Few practices use any stand-alone software, if this is not included in a Practice Management suite. There is little change in these levels since Specialist Time and Fees software use remains stable and is used by 11 of practices; IRIS Time and Fees is most widely used, followed by a bespoke package or Word/Excel. Use of specialist Document Management software remains low at 8 of practices. Invu Document Management is the most widely used named brand. Chart 25 Specialist Practice Management software market penetration Stand-alone software, not included in a Practice Management suite Base using in 2011 Time and Fees Of those using specialist Time and Fees software: 76 IRIS Time and Fees 31 Bespoke or Word/Excel 20 Other Time and Fees software 18 Sage Time and Fees 15 Star TimeXpress 11 Eureka! TR 4 Practice Net Panache Time and Fees 1 Document Management Of those using specialist Document Management software: 53 Other Document Management software 47 Invu Document Management 24 Bespoke or Word/Excel 12 Docusoft 7 Singleview 4 Practice Net Rapport Document Management 5 CCH Document Management 1 Customer Relationship Management Base: all respondents, weighted (700) / All who do not use a software package for Practice Management or the package does not include specific components, weighted (as shown) 22

23 Cloud working Around a quarter of all firms said that they were considering replacing one or more software applications in the next 12 months, but cloud-based solutions are still a minority interest among firms just 2 of all firms would definitely consider a cloud-based alternative, and a further 6 are less certain. So far there is little available in the way of Software as a Service (SaaS) for mainstream practice software functions such as Accounts Production, Practice Management and Tax, and so this finding should come as no surprise. However, there is a wide variety of SaaS accounting (ie, Bookkeeping) software such as Xero and Kashflow now available, much of it targeted at accountancy practices and/or at businesses via their external accountant. Yet, even in that field, take-up is limited: the largest penetration by such a product (Xero) is a mere 1 of firms, with all other SaaS products combined accounting for another 2. It in accountancy practices survey report

24 Main software providers at a glance IRIS IRIS continues to be a strong player in the accountancy software market and maintains its lead position in the Accounts Production market. Market share has grown since 2007 in: Accounts Production Company Secretarial Personal Taxation Practice Management. In these areas, its market share has increased but generally not its market penetration; possibly reflecting a shift from smaller towards medium-sized firms. IRIS also retains its lead position in the Company Secretarial market, but penetration in the Payroll and Corporation Tax markets has fallen. IRIS product performance tends to be average, with no particularly high ratings but generally a high likelihood to recommend. Drummohr Tax Assistant bucks the trend with high scores for reliability and ease of use. Of the main providers that cover the whole field of traditional practice software (IRIS, Sage, CCH and Digita), IRIS products attract the best user ratings. Chart 26 IRIS at a glance Accounts Production Personal Tax Corporation Tax Practice Management IRIS Accounts Production IRIS Personal Tax IRIS Business Tax IRIS Practice Management SIZE Market share Market penetration a gain of five or more percentage points from 2007 a loss of five or more percentage points from 2007 PERFORMANCE RATINGS Unweighted base 191 (166) 190 (159) 189 (158) 116 (81) Total score (max 100) 84 (85) 86 (86) 84 (86) 79 (78) Performance Reliability Ease of use Initial service Ongoing support Business critical failure 8 (7) 4 (3) 3 (1) 2 (6) Would recommend 94 (92) 96 (95) 94 (94) 84 (83) Plans to replace in next 12 months positive negative difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. 24

25 SAGE Sage retains its position as market leader in Bookkeeping and Payroll software, although penetration has fallen in the Payroll market. In Accounts Production, Sage s SAP product has reduced market penetration and share, although Sage strengthens its penetration and share of the Practice Management market. Sage s user base is mixed, except where products are tailored towards the smaller or larger customer (ie, Sage Accounts Production (SAP) and Sage Accounts Production Advanced (SAPA)). Users tend to rate Sage products modestly, although some ratings fall below average, such as: Sage Accounts Production (SAP) likelihood to recommend Sage Accounts Production Advanced (SAPA) initial service and ongoing support, and higher than average business critical failure rate Sage Personal Tax ongoing support Sage Corporation Tax/Corporation Tax Lite ease of use Sage Practice Solution below average ratings across all product and service aspects, lower than average advocacy rates and above average plans to replace. Nonetheless, despite modest or below average ratings, there are improvements in Sage user ratings since 2007 when several products were poorly rated. Chart 27 Sage at a glance Accounts Production Personal Tax Corporation Tax Practice Management SAGE Accounts Production (SAP) SAGE Personal Tax SAGE Corporation Tax/ Corporation Tax Lite SAGE Practice Solution SIZE Market share Market penetration a gain of five or more percentage points from 2007 a loss of five or more percentage points from 2007 PERFORMANCE RATINGS Unweighted base 66 (103) 65 (46) 75 (37) 38 Total score (max 100) 78 (73) 81 (76) 78 (71) 69 Performance Reliability Ease of use Initial service Ongoing support Business critical failure 12 (5) 9 (13) 0 (8) 5 Would recommend 82 (83) 86 (80) 79 (62) 61 Plans to replace in next 12 months positive negative difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

26 Main software providers at a glance CCH CCH s market penetration and share is complicated by its number of legacy products in each software category still used by many practices. At the same time, CCH is also establishing its suite of.net products. CCH s customer base tends to be comprised of larger firms (seven-plus partners) and their performance ratings tend to be average; however, some products are rated lower than others. CCH Personal Tax all three products are rated below average for initial service and ongoing support. Taxpoint and the new CCH Personal Tax are also rated below average for product aspects. CCH Corporation Tax (CorTAX) and CCH Practice Management lower than average overall performance score. Chart 28 CCH at a glance Accounts Production Personal Tax Corporation Tax Practice Management CCH Accounts Production (VAP) CCH Personal Tax (PerTax) CCH Corporation Tax (CorTAX) CCH Practice Management SIZE Market share Market penetration a gain of five or more percentage points from 2007 a loss of five or more percentage points from 2007 PERFORMANCE RATINGS Unweighted base 50 (72) 74 (76) 56 (49) 35 Total score (max 100) 80 (79) 80 (84) 78 (78) 75 Performance Reliability Ease of use Initial service Ongoing support Business critical failure 8 (6) 5 (1) 9 (0) 11 Would recommend 86 (88) 76 (93) 84 (86) 71 Plans to replace in next 12 months positive negative difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. 26

27 Digita Digita offers no market leading products, but records strong market share gains in Accounts Production, Personal Taxation and Corporation Tax categories and increased market penetration in Practice Management software. Most Digita users are based in larger firms and rate the products modestly. The exception to this rule is found for Digita Accounts Production, where all areas but initial service are rated below average, and a business critical failure rate of one in five users is reported. Chart 29 Digita at a glance Accounts Production Personal Tax Corporation Tax Practice Management Digita Accounts Production (Thomson Reuters) Digita Personal Tax (Thomson Reuters) Digita Corporation Tax (Thomson Reuters) Digita Practice Management (Thomson Reuters) SIZE Market share Market penetration a gain of five or more percentage points from 2007 a loss of five or more percentage points from 2007 PERFORMANCE RATINGS Unweighted base (34) 52 Total score (max 100) (88) 85 Performance Reliability Ease of use Base too low Initial service to report Ongoing support Business critical failure 18 3 (0) 4 Would recommend (94) 92 Plans to replace in next 12 months positive negative difference of 0.3 or more points highlighted for performance, reliability, ease of use, initial service, ongoing support vs overall rating Difference of five or more points highlighted for total score, business critical failure, recommend, replace vs overall rating. It in accountancy practices survey report

28 ixbrl and filing to Companies House Just one in twenty practices use specialist ixbrl tagging software, as other practices ixbrl file generation is managed by their existing Accounts Production and/or Corporation Tax software. Generally, ixbrl tagging or conversion software would be used only when the practice is producing accounts from Excel and/or Word. Of the handful of firms who use such software, the product brands used vary greatly, though the most commonly used product is IRIS OpeniXBRL (five users). Among all practices which use ixbrl-enabled software (whether specialist or as part of their existing accounts production software), the majority of ixbrl accounts are produced only for HMRC (60 of firms using Accounts Production or tagging software); a further quarter produce ixbrl accounts for both HMRC and Companies House. However, it is possible that the numbers reportedly filing ixbrl accounts to Companies House may be overstated. Respondents were not asked to distinguish between the older XBRL format (which Companies House has been accepting for several years) and the newer Inline XBRL (ixbrl), and it is likely that some practices said they were using ixbrl when in fact they were using XBRL only. When firms do not use Accounts Production or ixbrl tagging software, they tend to file to Companies House online (mostly using the Companies House Webfiling service 41) or do not file online at all (40). Chart 30 Recipient of ixbrl accounts produced HMRC only 60 Both HMRC and Companies House 26 Neither HMRC nor Companies House 8 Companies House only Base: all respondents using accounts production or tagging software to produce ixbrl accounts, weighted (534) Mixed picture for ixbrl-enabled software use The transition to ixbrl-enabled software or processes presents a mixed picture: while a third of firms producing ixbrl-format accounts found it easy (rating four or five out of five), a quarter found it difficult (rating one or two out of five). Once the transition has been made, more than half of ixbrl users find the software and processes easy to use, although there is still a sizeable minority (13) who find it hard. Ease of use varies by Accounts Production software packages used for producing ixbrl-format accounts. Six in ten Sage Accounts Production Advanced (SAPA) users rate their product easy to use, despite showing relatively low Accounts Production performance ratings. The reason for the apparent inconsistency is that neither of Sage s accounts production software packages was ready to produce minimum tagged accounts in time for HMRC s 1 April 2011 deadline and, to date, are not listed on HMRC s website as recognised. Accordingly, SAPA and SAP users are benefiting from HMRC s soft landing concession, whereby incompletely tagged accounts are being accepted because the software was not ready on time. Therefore, SAPA users seem to be having an easier time than users of other products that comply much better with HMRC requirements. 28

29 Three in ten users of Digita Accounts Production, which does comply with HMRC requirements, find the process difficult. By comparison, 45 of CCH Accounts production (VAP) users rate this product easy to use, though a similar proportion (46) are neutral in their views. Overall, more than one in ten users are finding ixbrlenabled software or processes difficult and this is mainly due to the amount of additional time it takes to complete the preparation and filing processes; this may reduce as practices become more familiar with the software and processes. Chart 31 Ease of transition to and use of ixbrl-enabled software or processes Ease of transition Ease of use Extremely Easy Extremely Difficult Base: all respondents preparing year-end accounts and using either accounts production or ixbrl tagging software, weighted (562) Chart 32 Difficulties experienced in using ixbrl-enabled software or processes The process is too time consuming 45 Software has insufficient functionality 25 Software has bugs/produces errors 18 There are problems at the filing stage (to HMRC and/or Companies House) 14 Lack of training / information / helplines 12 Generally not good 11 The process is causing us too much additional cost 11 Too complicated 10 Difficulty with tagging 5 It is inflexible / Can t do tax returns after Not technologically advanced Base: all those who rated ixbrl difficult to use (1 2), weighted (74) It in accountancy practices survey report

30 Home and mobile working Over half of practices do not access any software or applications remotely, and these are predominantly sole practitioners. In fact, while the majority of sole practitioners and small firms with one partner (64) do not use remote access, this drops to 39 of firms with two to six partners. For those firms that do access files and software remotely, this tends to be to access general office software such as spreadsheets and word processing and client final accounts software. Traditional hardware (laptop or desktop devices) is generally used to access files or software remotely. However, in line with increased ownership and rapid advancements in Smartphone technology, almost one in five respondents use Smartphones for remote access, while a handful (6) use handheld tablets. Yet despite an increase in Smartphone and tablet use, Apps are not making inroads into the professional accountancy world: only 3 of firms say they use any accountancy-specific applications. Chart 33 Types of files and software accessed remotely Word processing or spreadsheet software or files 39 Client final accounts software 30 Client tax software 26 Corporation tax software 25 Client bookkeeping software 23 Client payroll software 18 Practice management systems 18 Company secretarial software 8 Don t access any software packages or applications remotely 54 Don t know 2 Base: all respondents, weighted (700) Chart 34 Devices used to access files or software remotely Laptop/notebook/netbook 48 Desktop PC/Mac 38 Smartphone eg, iphone, Blackberry, HTC, Galaxy etc 17 Tablet such as ipad, Blackberry Playbook, Galaxy Tab etc 6 None/Don t access 38 Don t know 5 Base: all respondents, weighted (700)

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32 About the IT in Accountancy Practices Survey The 2011 IT in Accountancy Practices survey updates similar surveys undertaken since 2000, and probes on member firms use and views of accountancy software. Where appropriate, this report provides comparisons with the last survey in Overview of methodology The report is based on 700 telephone interviews conducted during August and September 2011 with IT decision makers in member firms and offices in the UK. In addition, we carried out 121 boost interviews to obtain sufficient responses for comparative analysis of key software products. Data were weighted by size of practice (number of partners) to represent the overall population of ICAEW member firms. As in previous surveys, further weighting was applied to assess market share of software products; this is an estimated adjustment of market penetration (use) to account for multiple licences of one product in larger firms. Analysis of key software products is based on unweighted data to reflect user views. Further information For further information about ICAEW s IT Faculty or any technical matters relating to this survey, contact: Dr Paul Booth Technical & Development Manager, IT Faculty at ICAEW T +44(0) E [email protected] Yvonne Burr Head of Strategic Research at ICAEW T +44(0) E [email protected] Sarah Oliver Senior Strategic Research Manager at ICAEW T +44(0) E [email protected] ICAEW is a professional membership organisation, supporting over 136,000 chartered accountants around the world. Through our technical knowledge, skills and expertise, we provide insight and leadership to the global accountancy and finance profession. Our members provide financial knowledge and guidance based on the highest professional, technical and ethical standards. We develop and support individuals, organisations and communities to help them achieve long-term, sustainable economic value. Because of us, people can do business with confidence. ICAEW Chartered Accountants Hall Moorgate Place London EC2R 6EA UK T +44 (0) F +44 (0) E [email protected] icaew.com/itfac linkedin.com find ICAEW twitter.com/icaew facebook.com/icaew ICAEW 2011 MKTPLN /11