Client Portal Opportunities
By Roman H. Kepczyk, CPA.CITP (November 20, 2008) 

More and more firms are transitioning towards a digital environment where all files are stored in an electronic format.  These same firms are finding out that requesting information from clients, and returning documents back to those clients in a digital format, streamlines production processes and makes documents more accessible to those that need them, when and whenever they are needed.  Today, there are many options for delivering these digital documents including digital fax, email, and physical delivery of CDs and USB fobs, but these solutions are expected to be eclipsed in the near future by today’s client portal solutions that provide more secure access and better control of documents.

According to the 2008 AAA Client Transfer Survey conducted by the Association for Accounting Administration (www.CPAAdmin.org), email was the most common tool utilized by firms today for transferring files both to and from clients.  The majority (77%) of the 74 survey respondents used email for this purpose and 74% also said they would forward documents to other outside parties at the request of clients.  Unfortunately email is not the most secure method of transferring files as it must often pass through multiple servers outside of the firm’s control before being delivered to the recipient.  While 41% of firms also utilized passwords or encryption for documents, this was mostly passwords contained within Adobe, Microsoft Word, and Microsoft Excel, which most people feel do not have the strongest encryption, with tools available to strip off or crack these passwords. 

The survey found that 39% of firms had a digital fax solution in place, which was an easy tool to utilize for small documents already in a paper format.  With most businesses also having access to email and PDF applications, the number of faxes being sent is declining as these organizations utilize email, portals, and FTP sites, instead.  Also, 73% of firms stated that they still had clients deliver information on CDs, Zip Disks and USB drives, oftentimes because these files were too large to be transferred via email due to file size limitations either from the client or the firm.  In addition, firms had to deal with either returning or disposing of this media once they downloaded the data.  Portals and FTP (file transfer protocol) sites solve this problem as there are virtually no limits on the size of files that can be transferred (think about the large QuickBooks files or audit binders in PDF format that are often sent).  Unfortunately many FTP products take additional maintenance to create each individual account, which usually takes more technical skills to setup and these tools usually do not integrate with the firm’s document management product, requiring staff to load and train on an additional application. 

This leads up to today’s recommended solution for transferring client files: client portals. Client portals are secure data directories accessed through an Internet connection that may either reside within the firm’s servers or through a hosted service provider.  Most often they are accessed through the firm’s website via a logon (often the client’s email address) and password.  Once the user is logged in, they are able to access only the data directories that they have been authorized to see and not any other client’s files or directories, if properly implemented.  Some FTP tools can lead to inadvertently exposing client data to unattended recipients that may also be logging in to transfer files, so it is important to evaluate the setup procedures required by the various tools and determine who would have the necessary skills to do the setup for both the portal and the adding of new client accounts.  The AAA survey found that two thirds of the firms utilized administrative personnel to setup client accounts, 19% of firms allowed tax and audit professional staff set up accounts, and in 34% of firms the IT staff were asked to do so.  Ease of setup and use is a critical client portal feature for firm’s to evaluate and those that are integrated with the firm’s document management application receive the highest marks.  Just over one third of recipients were using the CCH ProFx Portal that integrates with CCH ProFx Document Management.  This was followed by 19% of recipients using the Thomson GoFileRoom DM/Portal or Creative Solutions Virtual Office products.  The remaining firms were using tools such as SharePoint (build your own), Mozilla, and Service2Client to name a few.

The survey found that 43% of the firms already had a client portal in place with slightly more using an externally hosted solution as those that were hosting their own internally.  While most of these firms had setup less than 10% of existing clients, they felt this percentage would increase as the need to use the portal with other clients expanded.  Within the firms that did not have a portal in place, 55% had plans to add one during 2008 so the trend towards this solution is obvious. 

As mentioned above, ease of use for both clients and firm personnel is a critical feature and is optimized by having a portal solution that integrates natively with the firm’s document management application.  In addition, firms should consider evaluating the following features of the various portal products:

·        Bi-Directional Transfer: Files should be able to be seamlessly transferred both to and from clients with a product that is easy for clients to utilize.

·        Notification/Audit Trail: Firms should evaluate how the portal product notifies the firm/employee when a file is uploaded and what type of audit trail is kept as to whom accessed the files and when they were transferred.

·        Logon Provisioning: As clients logon, they should be able to view all of their accounts with a single logon.  If they own multiple entities, they should be able to see them all, while their employees within each entity should only be able to see those directories that they have been provisioned to access.

·        Security: IT personnel should review the security setup as well as review policies, procedures and training required for both personnel and clients.

·        Viewing Capabilities: Some portals allow files to be accessed in a read-only mode, while others allow the native (editable) file to be available for read and write capabilities; most firms will want both these capabilities.

·        Cost: Different products charge based on a flat license, number of clients, and volume of storage so it is imperative that firms project what their needs are for both setup and annual maintenance with growth projected for the next three years.

The “less paper” drive within our profession will push all information to a digital environment that makes information available to firms and clients at their convenience.  Client portals will provide the most robust solution with the best security, so firms should evaluate them now and plan on implementing them before the next busy season.

Roman H. Kepczyk, CPA.CITP is president of InfoTech Partners North America, Inc. and works exclusively with CPA firms to understand and implement today’s digital best practices within their tax, audit, client service and administrative departments.  This article is reprinted with the publisher's permission from the CPA Practice Management, Forum a journal published by CCH INCORPORATED. Copying or distribution without the publisher's permission is prohibited. To subscribe to the CPA Practice Management Forum or other CCH Journals please call 800-449-8114 or visit www.tax.cchgroup.com.

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