Software - Time to Reevaluate

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#21
makbo  
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Tenletters wrote:"Drake Software generates $34.6K in revenue per employee [...] Drake Software's revenue is the ranked 9th among it's [sic] top 10 competitors."
I would love to know how they come by that figure. Drake is not publicly traded so their financial statements are not public. Come to think of it neither is their payroll. I would not put much stock in what must be a made up statistic / SWAG

The quote was about revenue, not payroll. The number of employees is probably easy to figure out, especially if you drive around their parking lot from time to time. And the revenue is pretty easy to figure out, given that Drake will publicly give some idea of the number of customers they have. I don't see any support for your accusation that the statistic is "made up" -- do you really think a large company can keep even the most basic facts about itself secret in this day and age?

I doubt all the Drake workers are full-time year-round, so that number probably includes a lot of seasonal help desk staff.

Do you think there is anyone out there who would actually want to buy Drake? :lol:
 

#22
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Yes I do. At last count Drake had about 55,000 tax offices as customers which translates into at least three times the revenue that web site guestimated. The revenue amount was so obviously wrong that the revenue per employee was surely nonsense.

Thomson Rueters has bought up other companies before giving their customers 2 or 3 years of discounted pricing on UltraTax. Why would they not do that again?
Because on T.A. ten was the most you were allowed
 

#23
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Tenletters wrote:Yes I do. At last count Drake had about 55,000 tax offices as customers which translates into at least three times the revenue that web site guestimated. The revenue amount was so obviously wrong that the revenue per employee was surely nonsense.

Thomson Rueters has bought up other companies before giving their customers 2 or 3 years of discounted pricing on UltraTax. Why would they not do that again?


From the perspective of Thomson Reuters, acquiring Drake would be an incredibly low ROI move unless they were able to move Drake users to the UT platform. Honestly, I'm a current UT user and I doubt TR would be unhappy at all if I switched; my firm is definitely not the "20" in "80/20".

I'm stereotyping here, but Drake's userbase is interested in cost first and value second. That's why they use the software, after all; it's inexpensive and they get a lot for the money they spend. Drake users would be likely to rebel if TR bought them out with the goal of migrating them to UT. Just think, there are a lot of firms doing 2,000+ returns per year in Drake and they pay less for their entire, unlimited everything package than they would pay for just UltraTax's unlimited 1040-only e-file.
 

#24
makbo  
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Tenletters wrote:Yes I do. At last count Drake had about 55,000 tax offices as customers which translates into at least three times the revenue that web site guestimated. The revenue amount was so obviously wrong that the revenue per employee was surely nonsense.

Thomson Rueters has bought up other companies before giving their customers 2 or 3 years of discounted pricing on UltraTax. Why would they not do that again?

I concede the previously linked revenue number per employee at Drake may be wildly inaccurate. It looks like you have to pay someone to get better data and analysis of the industry. I already mentioned the situation with TR -- that transaction was over ten years ago.

Not only would someone not want to buy Drake for its customer list (it would be like buying a tax practice where the average fee per return is $200), but they wouldn't want the software either. And, as I mentioned, Phil Drake is particular about who he does business with:

"Phil Drake is Founder and Chairman of Drake Enterprises, a group of 18 businesses based in Western North Carolina. The Enterprise group provides jobs to more than 450 individuals, making it one of the largest employers in the area. The company strives to demonstrate that biblical principles apply to every walk of life – including business decisions. Phil is also the Chief Technical Advisor to Drake Software, the flagship company of Drake Enterprises."

https://www.ncfgiving.com/leaders/
 

#25
adamant  
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+1 for UltraTax.

We used to use a regional solution called TaxWorks, that was pretty solid for Idaho and decent on Federal. HR Block bought their calculation engine, and then ran the company into non-existence, so we switched to ProSeries.

ProSeries was OK, but buggy, not very well researched (IMO). More than once we called them with mistakes in their form entry, carryovers, and general calculations. I get that Idaho isn't their target market, but pretty sad considering how large of a company they are.

Because we're gluttons for punishment, we decided to switch to UltraTax in December several years ago. We thought it was going to be a headache, but we were very much done with ProSeries and their customer support. It ended up being a breeze. Almost everything proforma'd with ease, and honestly, it was almost as if we had used UT the previous year.

Now that our 3-year discount is up, writing the check for UT and related products is painful every year, but consensus between the 4 partners is that at the end of the day, it is worth it. I have a lot of confidence in UT's team that is in charge of compliance and updating of forms. I know for a fact that have taken our feedback, and within a week, pushed an update to correct a mistake on the Idaho forms. Thomson is very proactive that way, and very much listens to the client.

At the end of the day, price is not a reason to go to UT, but quality is. Having said that, if I were a solo practitioner, paying for UT would be a pretty tough pill to swallow, it's really fairly pricey.

I have a thing with "Intuit" products, a bias, if you will; I very much dislike Intuit's patchwork quilt approach to their software. QuickBooks, ProSeries, etc.

I have no empirical evidence of this, but I'd venture to say that LaCerte's quality of offering wasn't improved when Intuit acquired them, so they start with one strike against them in my book.

FWIW
 

#26
JeffChr  
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I agree with TaxCuts review of Drake. I'd like to add that Drake also has a client portal which works really well. Fully automated emails to clients when you upload a file, printing from Drake directly to the portal, a document management system so anything can be uploaded to the a client portal, etc. Also has excellent encryption and authentication features.
 

#27
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Officially bought LaCerte today...good riddance UltraTax and Thomson Reuters, except for some reference materials.
Last edited by CornerstoneCPA on 23-Oct-2019 7:35am, edited 1 time in total.
 

#28
makbo  
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Thompson Reuters -> Thomson Reuters
 

#29
smtcpa  
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I did that 3 years ago. What a mistake I made. Came running back to UT by the summer. Good luck!

CornerstoneCPA wrote:Officially bought LaCerte today...good riddance UltraTax and Thompson Reuters, except for some reference materials.
 

#30
ATSMAN  
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How much testing and evaluation with your own returns do you guys do before making a firm decision to switch?
Last time I switched I spent the entire summer testing with my own returns.

Is pricing increase the main factor to trigger a switch?
 

#31
wel  
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Is pricing increase the main factor to trigger a switch?
The answer to this tends to depend upon the size of your tax practice - (# of clients / # of staff), your growth rate, and the complexity of the returns you prepare.

If you have a small staff, and relatively simple returns then pricing may be a big factor in the decision to switch.

If you're growing rapidly and the complexity of your clients' returns are increasing, then you may outgrow the software that you've been using - and find that you may need to spend a lot more money on software in order to increase efficiency so that you can continue to grow. (This can be a difficult pill to swallow - too much focus on price can slow your growth or lead to errors, etc. due to the less-expensive software not being up to the task.)

If you have a large staff and a large number of very complex returns, you'll be less likely to risk making a switch - it's unlikely that you'd be able to save enough to justify the hassle of the conversion process and training staff.
 

#32
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I tested some returns and calculations ended up being same. TR has pissed me off with how they charge for things that are already included in LaCerte (such as oil and gas). Everything about TR, except their support, annoys me. LaCerte is pricier in some regards, but I feel like I am getting more for my money and it also directly integrates with other software I have started using. Those were the drivers behind the change. Eventually I am going to go hosted route, and TR wants an absurd setup fee even though they charge a bit less per user each month.

LaCerte can't be that bad. It is widely used by some very large firms.

makbo wrote:Thompson Reuters -> Thomson Reuters


Corrected JUST FOR YOU. Seriously, WGAF that I accidentally added a P? Only you. :roll:
 

#33
Wiles  
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LaCerte -> Lacerte :twisted:
 

#34
smtcpa  
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I realized at some point that Lacerte users had used the program for decades. They did not know anything other than Lacerte. It does an ok job on federal returns, but had to override most multi-state returns. I found numerous state errors and even support could not fix the issues. I also loved the fact UT would send Elf Ack via email to clients and was suprised Lacerte did not do this. You need to check a lot more with Lacerte, just a heads up.

CornerstoneCPA wrote:I tested some returns and calculations ended up being same. TR has pissed me off with how they charge for things that are already included in LaCerte (such as oil and gas). Everything about TR, except their support, annoys me. LaCerte is pricier in some regards, but I feel like I am getting more for my money and it also directly integrates with other software I have started using. Those were the drivers behind the change. Eventually I am going to go hosted route, and TR wants an absurd setup fee even though they charge a bit less per user each month.

LaCerte can't be that bad. It is widely used by some very large firms.

makbo wrote:Thompson Reuters -> Thomson Reuters


Corrected JUST FOR YOU. Seriously, WGAF that I accidentally added a P? Only you. :roll:
 

#35
wel  
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Agree w/ SMT - I used Lacerte for ~ 10 years, and it's good. However, UT and CCH ProFx are better with multistate returns.
 

#36
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I am a Drake user for the last 3 years. Before that it was Lacerte. The only things I miss about Lacerte are the diagnostic and planning pages. I wish Drake or another software vendor would develop something similar as an add-on to Drake.

The only way I would go back to Lacerte would be if I started doing consolidated returns - currently, I do not have any.
 

#37
ATSMAN  
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Have you tried the Drake Planner to do "what if" returns? It is pretty handy.
 

#38
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ATSMAN wrote:Have you tried the Drake Planner to do "what if" returns? It is pretty handy.


Absolutely, use it a lot.

I don't know if you've ever used Lacerte but it would have several diagnostic pages that were 10 times better than the very basic diagnostics from Drake. Its "link backs" from the return (especially state returns) was a lot better too. Plus Lacerte had a planning page where it would make tax savings suggestions based on the return. IE, "if the TP contributes X to a SEP, TP will save X in tax." There was also a page that I called "the red flag page" - it would show things like the average deductions for returns with similar AGI compared to the return you were working on. I'd be willing to pay Drake an extra $1,000/year for the planning page alone.
 

#39
ATSMAN  
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>>> I'd be willing to pay Drake an extra $1,000/year for the planning page alone.

If you look at the latest software surveys, Drake appeals to budget minded, smaller prep shops, so I think most Drake users would have a problem paying an additional $1000 for a better Planner.
 

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