Practice management software is an essential part of an accounting firm’s tech stack.
If you’ve been looking for a solution, chances are that you’ve come across TaxDome and Canopy. Both are popular practice management solutions for accounting, tax, and bookkeeping firms, with features like:
Project management
Workflow management
Best-practice workflow templates
Client management and communication
Team management and collaboration
Document management
Time tracking
Billing and payments
Reporting
Integrations with leading business and accounting software
While the two platforms are similar in many ways, they are not created equal. For example, TaxDome is built with sole tax practitioners and small firms in mind, and Canopy is more tailored towards mid-sized specialist tax firms based in the US.
If you are new to both, take a look at the 11 best accounting practice management software guide for an introductory overview of what each product offers and their pros and cons (including other alternatives you might like to consider).
But if you’ve already narrowed down your choices to TaxDome and Canopy, see how they compare across nine key features for tax and accounting practice management:
🥇 A tie between Canopy and TaxDome
🏆 Best alternative: Karbon
TaxDome and Canopy both have essential project management and workflow automation capabilities like tasks and subtasks, assigning tasks and due dates to team members, task list views, repeating work schedulers, and task dependencies.
They also offer built-in custom client/tax organizers to help streamline the information collection process for tax preparation. For tax professionals, this is a handy feature that saves time and reduces the client chase.
With that said, if your firm’s focus isn’t on tax, Karbon is a great alternative for full-service accounting, tax, and bookkeeping firms for project and workflow management.
Beyond the standard features mentioned above, Karbon also boasts:
highly versatile drag-and-drop Kanban boards
a library of 250+ workflow templates that showcases best practices from client onboarding to month-end close.
Here’s a closer look at Karbon’s full workflow management capabilities.
🥇 Winner: Canopy
🏆 Best alternative: Karbon
Both TaxDome and Canopy offer collaboration and communication features like embedded emails, @mentions, and comments. But the way they’ve executed these features is different.
TaxDome only syncs emails from clients already in your CRM, which means you can only @mention or comment on emails from a known client. For new clients and all other non-client-related emails, you still need to go back to your primary email inbox.
This often adds more inbox clutter than reduces it. In fact, TaxDome’s collaboration feature, also called Inbox+, is so counterintuitive that one Capterra reviewer named it his least favorite feature.
In contrast, Canopy syncs with all of your emails and you can @mention a colleague and comment on any email right from within the platform.
This is a significant advantage over TaxDome as you have full visibility inside Canopy and can give teammates the context they need without switching back and forth between your tax practice management software and your email inbox.
Though Canopy has the edge over TaxDome on collaboration, neither platform is as strong in this area as Karbon. Karbon has email management, @mentions, comments, notes, and calendar integrations just like TaxDome and Canopy. But it’s designed and built into your workflow in a much more intuitive way.
You can @mention colleagues and comment on every email, plus every task, subtask, and client. And all your conversations are collated as threads, which is much easier to use. For large teams that work interdependently, Karbon is the go-to choice for streamlined collaboration.
🥇 A tie between Canopy and TaxDome
TaxDome and Canopy have comparable client portal features that allow firms to effectively collaborate with their clients. These features include requesting information, sending documents for eSignature, exchanging documents, issuing invoices and collecting payments.
TaxDome and Canopy also have client-facing mobile apps (available on iPhone and Android), which creates a modern, secure, and convenient client experience.
🥇 A tie between Canopy and TaxDome
Canopy and TaxDome both have built-in document management systems that enable you to store files in the platform. They also have built-in eSignature and PDF editing capabilities like previewing, annotating, and combining multiple PDFs into one file.
For smaller firms that don’t want to purchase a separate document management system, Canopy and TaxDome’s document management features may be sufficient for your basic document storage and management needs.
But if your firm is larger or growing, and you have an enterprise document management system like Dropbox, you may want to consider a platform that integrates with these apps, like Karbon.
🥇 Winner: Canopy
🏆 Best alternative: Karbon
When it comes to reporting and business intelligence, Canopy outperforms TaxDome, especially after it released Insights—a new feature that gives you in-platform analytics dashboards on tasks, clients, and time.
With these three dashboards, practice owners can quickly visualize and analyze critical data like YTD revenue, percentage of outstanding invoices by age, total billed hours and more.
In comparison, TaxDome’s only true reporting capability is an export of timesheets as a .CSV or Excel file—not quite the level of sophistication needed for real insights.
It’s worth noting that Canopy’s Insights feature is still in beta mode. It’s launching with the platform’s Pro Plan, which isn’t available as of July, 2023.
If you are looking for a practice management platform that has a readily available practice intelligence feature today, consider Karbon as an alternative.
Karbon’s business intelligence and reporting feature—Karbon Practice Intelligence (KPI)—is an innovative data analytics tool that gives accounting firms unparalleled insights into their business performance.
With KPI, you not only have access to data, you can also use it to gain actionable insights like:
What’s the average number of days waiting on client records?
How many client engagements are over budget?
How much work is ready to start, in progress, in review, or completed?
The flexibility and capabilities of KPI makes it a leader in the accounting practice management space.
🥇 A tie between TaxDome and Canopy
🏆 Best alternative: Karbon
Canopy and TaxDome both integrate with some of the most popular business and accounting apps:
Outlook
Gmail
QuickBooks Online
Zapier (which connects you with thousands of apps via a third-party integration)
They each also have unique integrations that appeal to different types of tax firms.
For example, TaxDome integrates directly with Stripe and CPACharge for payment processing. If you use either payment gateway software, TaxDome is clearly a better choice.
On the other hand, Canopy has a direct integration with the IRS for pulling transcripts on a one-off or recurring basis. For tax firms that handle a high volume of complex tax resolution cases, this integration is a major timesaver.
If your firm isn’t heavily focused on tax, you may find Karbon to be a better alternative to both Canopy and TaxDome as it integrates with all the apps listed above, plus other popular tools like:
XPM
Ignition
GoProposal
Liscio
Google calendar
Outlook calendar
OneDrive
Dropbox
VXT
See Karbon’s full library of integrations here.
🥇 Winner: Canopy
🏆 Best alternative: Karbon
Canopy has recently released a ChatGPT-powered email drafting feature while TaxDome has publicly stated that they have no set plans to implement AI.
With that in mind, the team at TaxDome might change their minds in the future.
Though Canopy takes the lead over TaxDome on AI, it isn’t the only practice management solution with built-in AI capabilities.
Karbon, for example, released GPT-powered Karbon AI that can draft and reply to emails, plus:
Summarize long email threads into succinct bullet lists (including comments)
Provide personalized updates to your clients as their job progresses
Improve your writing
Compared to Canopy’s current AI offering, Karbon AI is a more robust and in-depth AI tool.
Canopy: $$$$
TaxDome: $$
It’s hard to say who wins this category because they have completely different approaches when it comes to naming their prices.
TaxDome offers one pricing tier: TaxDome Pro.
The monthly price depends on how many years you sign up for (payment is required upfront):
3 years: $50 USD/month per user
2 years: $58 USD/month per user
1 year: $66 USD/month per user
For a 5-user firm on a 1-year contract, the total price would be $330 USD/month.
Canopy, in comparison, charges by modules that you need to add on to access features like document management and workflow.
Comparable pricing for a 5-user firm (billed annually):
TaxDome Pro: $330 USD/month
Canopy: $746 USD/month
Note: To achieve a comparable comparison, this includes all of Canopy's essential features, plus 1,000 active contacts.
🥇 Winner: Canopy
Because TaxDome and Canopy are both comprehensive practice management tools, they come with a learning curve. This is why quality onboarding and customer support is critical.
TaxDome’s customer support is geared towards DIYers and self-starters.
Their in-house onboarding and implementation services are limited, with many customers requiring a third party certified TaxDome consultant to set them up.
The rest of TaxDome’s customer education is largely through support articles and a self-paced online learning platform called TaxDome Academy.
As for Canopy, they offer an in-house, guided onboarding and implementation program for new customers in addition to the standard knowledge base, and self-guided training videos.
There is an implementation fee associated with this premium service, but for larger firms with more data to migrate, it might be worth the cost to save you valuable time.
Now that you have had an in-depth review of TaxDome and Canopy, you should have a better idea about which option best suits your practice.
If neither is exactly what you’re looking for and you’d like to check out Karbon, you can learn more or book a demo.
To see how professional services firms save an average of 16.5 hours per employee each week, you can learn about the Karbon Effect. Or you can use the Karbon ROI calculator to see what your return on investment could be.
You can also hear directly from Karbon customers about what Karbon is enabling them to do at their firm (and for their clients).
