Choosing the Right Software for Your Site

Many tax credit managers use computer software programs to help them manage their tax credit sites. A good software program should save time and money by making it easier to keep your site in compliance with tax credit rules and perform many other management functions.

If you're considering buying a software program for the first time or switching to a new one, you may be confused about what to look for. We have spoken to major vendors of software for tax credit sites, as well as software users, to find out what you should consider when choosing a software package. Based on that information, we have put together 11 questions to ask software vendors when you are choosing software for your site.

What to Ask Software Vendors

A good tax credit software program should be able to perform basic tax credit management and compliance monitoring tasks, such as processing move-in and certification paperwork. When you buy a software program, ask your software dealer the following questions:

1. Is Software Windows-Based or Web-Based?

Software vendors usually offer a variety of platforms, the most popular being Windows-based or Web-based, explains Neille Rechter of Yardi Systems, Inc. You will need to determine what is the best fit for your site by understanding the benefits and limitations of each system.

Windows-based systems. These require you to install software on your site's computers with CD-ROMs or discs. And all the data you input (for example, resident data) will be stored on your computers or your site's computer network.

Web-based systems. With a Web-based system, you access the software via the Internet. All the data you submit is maintained on the software provider's server (not on your computers or computer network). Web-based systems let multiple users access your site's data from multiple locations. Users aren't limited to using specific computers at your site.

Ask what security features vendors provide for Web-based systems (for example, is the data you submit password-protected?). You want to ensure that your site's information is kept private.

Keep in mind that Web-based systems require a high-speed Internet connection, says Mark Chrzanowski, training specialist at Gene B. Glick Co. Some smaller sites, and sites in remote areas, may not be able to get a high-speed Internet connection. And some sites simply can't afford the cost of Internet service. In these cases, a Windows-based system is a better option.

For a Windows-based system, be sure to find out whether your existing computer system is sufficient to run the software. For instance, ask how fast your processor must be, and how much RAM and hard drive storage are necessary to run the program.

2. Does Software Generate Required Reports for State HFA?

Ask whether the software allows the user to modify the verification forms for particular state housing finance agencies (HFAs). Each state requires a different format of the end-of-year report. Make sure the vendor is able to provide it in the format you need, such as in Excel, says Rechter.

3. Does Software Help You Ensure Income Eligibility?

Most software has a move-in program that helps you process applications and do initial income certifications. Ask about the particulars of this program, including whether it calculates income automatically, tracks third-party verifications, and helps in correctly setting rent levels and selecting units for move-in. How does the software handle raises over the compliance period to accurately project an applicant's annual income?

4. Does Software Track Compliance with Important Tax Credit Rules?

Find out how well the program monitors compliance. For instance, ask whether it analyzes household and unit data to show you whether each building is in compliance with all tax credit requirements, such as the minimum set-aside. Ask whether it red-flags potential violations of rent and income restrictions. Good programs will also track the annual recertification dates of each household and remind you as they draw near.

5. Does Software Perform Other Property Manage-ment, Accounting Functions?

In addition to reports required for tax credit purposes, you probably need to generate other reports. Some tax credit software programs perform these tasks for you, such as generating occupancy reports for your owner. You may have other software already installed for other purposes—for instance, to help manage compliance if your site participates in other programs, such as project-based Section 8 subsidies through HUD.

It is important to find out whether the tax credit software can interact with existing software that you currently use to manage compliance with other programs.

6. How Long Has Vendor Been in Business?

It is always a good idea to ask how long the software vendor has been in business, recommends Chrzanowski. Specifically, find out how long the vendor has been developing and selling software for the tax credit industry. Because good software is essential to managing your site and complying with tax credit rules, you will want to choose a software package from a vendor with a track record for creating good products, adds Rechter.

7. Does Vendor Keep Up with Regulatory Changes?

As a manager, you know that the rules affecting tax credit sites are constantly changing. Your software must be updated to include these changes. Therefore, you should ask software vendors what they do to stay on top of the changes that arise, says Chrzanowski.

For example, you should find out whether a potential software vendor is associated with any national tax credit organizations, recommends Rechter. Many of the better software vendors attend seminars to stay current with tax credit regulations and find out how to handle recent rule changes that may be confusing and not yet understood by the industry.

8. What's Vendor's Policy on Updates and Upgrades?

Your software must be updated to handle new rules and requirements. Ask your software vendor about its update policy.

First, find out what the updates cost. Many times, updates are provided in the ongoing maintenance included in your agreement. Some software vendors sell a maintenance package in which the price includes all updates at no additional cost, explains Rechter. Other software vendors charge a fee for each update. Be sure to ask the vendors about all the costs involved.

Second, ask each vendor how quickly it prepares updates and distributes them to you, says Chrzanowski. For Windows-based systems, sites must install updates on their computers or their computer network with a CD-ROM or disc. It's important to know how quickly vendors can deliver the CD-ROM or discs to your site.

If your site has Internet access, you may be able to download updates for Windows-based systems. Ask your software vendor whether it provides updates via the Internet for its Windows-based software.

Delivery of updates for Web-based systems may be faster because they can be downloaded from the Internet, says Rechter. If you have a Web-based system, ask whether the upgrades are downloaded automatically. In this instance, a user will see a pop-up message on the screen indicating that an update is ready to be installed. The user can click on a button to “accept” and install the update.

Although automatic downloads are convenient, you may not want an automatic download in some cases, cautions Chrzanowski. For example, some updates may require staff to be retrained in how to use the updated software. Find out whether the vendor can notify you when software updates require staff training.

9. What Technical Support Does Vendor Provide?

When using any software packages, you or your staff will run into problems. Find out what kind of technical support the vendor offers and how quickly it can respond to your requests for assistance.

For example, ask whether you can reach technical support by a toll-free telephone number or online only. Also ask whether technical support is available only during office hours or during extended hours. In some cases, vendors may provide technical support on-site if you experience more severe problems. Find out whether the software vendor you are considering offers on-site technical support and how much it costs.

Ask also whether “Help Desk” personnel have an understanding of the type of environment you work in, and learn the company policies toward client requests for program changes and additions.

10. What Kind of Training Does Vendor Provide?

To understand and use most software packages, you and your staff will need training. Ask vendors what kind of training they provide and at what cost, says Rechter.

Some vendors provide telephone training for their customers. Others come to your site and work with your staff directly. And some software vendors provide Webinar training, where staff can participate in a seminar that occurs live over the Internet. The type of training that works best for you will depend, among other things, on the number of employees who will be using the software, and their computer skills.

11. Does Vendor Offer Free Web Presentation?

Before you purchase software, it's a good idea to try it out to see whether it suits your site's needs. Some vendors offer free demo versions of their software on a CD-ROM. Other vendors offer a free Web presentation of their software, which you can access on the Internet. A Web presentation is interactive: You can ask questions about how the software works. Either tool can help you see how the software works so you can decide whether it's right for your site.

Insider Sources

Mark Chrzanowski: Training Specialist, Gene B. Glick Co.; Indianapolis, IN

Neille Rechter: Account Manager, Yardi Systems, Inc.; Norcross, GA