Drake Software — Drake Tax

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From the April/May 2008 Review of Tax Compliance Suites

Drake Software’s all-in-one tax preparation system has a very loyal following of professional users who have enthusiastically voted for the system in our annual Readers’ Choice Awards, making it the most favored tax prep system for two years running. After the Big 3 vendors (CCH, Intuit and Thomson), Drake places at the top of tax prep vendors in terms of market share with 10 percent. The tax preparation system includes unlimited free e-filing for all taxable entities (individual, corp, s-corp, fiduciary, partnership, non-profit) along with all states that have annual tax reporting requirements for these entities. The program, priced at $1,395 ($995 renewals), allows multiple users in the same office at no additional cost, and includes a document management system, tax planning, client write-up, appointment scheduling, client communication tools, client organizers, a basic website and access to RIA’s Checkpoint for research. Drake also continues to offer the system on a pay-per-return basis.

General Operations/ Ease-of-Use -- 4 Stars
Drake opens within a crisp and resizable window that provides traditional icons for starting or opening returns, printing, performing batch calculations, accessing Help and support, performing research tasks, managing clients and working with the appointment scheduler. The split-view work area keeps a jump-to list of recently worked on returns on the left, along with pending appointments and the Message Center, which provides program status updates and other information. During initial program installation, the program prompts and guides the user through setup of letterhead, clients, pricing rates, document management and other default settings.

Returns are easily accessed via several methods, including from the Recent Files list, the Client Status Manager or through the Open/New icon, which offers a spreadsheet list that displays existing client returns that are filterable by entity type and sortable by either name or TIN. A search function allows looking up returns by name or SSN/EIN, and if no return is found the system prompts the user to start a new client return. The Client Status Manager provides a much more comprehensive spreadsheet overview of client returns, displaying status, preparer, refund/balance, AR information, and other data, which can be customized to show specific data in the order the user wants it.

During initial entry of taxpayer demographic or general business information, which takes place on a default plain, slate-grey data-entry sheet (colors can be customized), Drake includes a Smart ZIP Code function that prompts for the ZIP first, and then automatically fills out city, county and state. The program does not provide a Save or Next function on this screen; instead, users either use the ESC key or click the X to close the screen. For heads-down users, this process should be welcome, but for users accustomed to mouse-driven navigation, it may not be as intuitive. The remaining data-entry processes are performed on interview sheets that resemble the document, with calculations automatically processed as data is entered. Forms-based entry is not available, but a Form View function allows the user to visually review a return set. Data can not be entered from this view. Screen-focused assistance is available throughout, providing an overview of the task in process.

Workflow & Productivity Tools -- 4 Stars
After entering initial “demographic” information, Drake offers a menu for accessing return information sheets for the selected entity/form. This menu essentially acts as the hub for activity within a specific client return, allowing the preparer to quickly move between areas, with tabbed access to various data categories, such as General, Income, Adjustments, Credits, Taxes, Other and State information. Likewise, the Client Status Manager provides the central point of activity for viewing general client summaries. In previous years, I have noted Drake’s interface as being minimalistic in the sense that it provides basic interview sheet entry and limited graphical elements. This interface actually enhances the productivity of the system by streamlining use and letting users get straight to the work product, providing easy access whether entering data heads-up or heads-down. Form data is automatically calculated and transferred as needed, including calculation of SSI and Medicare withholding, allowing overriding as necessary and noting those lines which have been changed from the calculated amount. Drake supports filing to multiple states.

The program can be networked and used by any number of professionals within the same office at no additional cost, and Drake also has a system for managing firms with multiple branch locations. The program includes several bank product options for firms that provide refund loans and debit card refunds. The Drake Tax system also includes several great built-in features, including a built-in Appointment Scheduler function that can manage multiple preparer’s schedules, diagnostics tools, document management, client billing and communications, and write-up with live and after-the-fact payroll capabilities. A free firm e-mail account is included with the ability to send and receive from within the system. File backup options, label and envelope printing, and an amortization schedule creator are also included. The program’s e-mail functionality also enables the creation of mailing lists and has contact lists and address books. One of the more notable but easily overlooked features in Drake is an SSN validation system that can help prevent errors before they result in rejected returns. Professional firms using Drake can also set up a free website using a simple system that requires no web experience. Drake users have access to RIA’s Checkpoint tax research system.