Category: accounting professional

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The CPA for Small Business: Proactive, Responsive, and Helps Paint a Beautiful Picture

chartI once read an article written by Doug Sleeter which describing the findings of a published report titled What SMBs Want from Their CPA.  The report was a summary of results from a study conducted by The Sleeter Group, and was intended to help accounting professionals understand the factors in the market which influence business use of professional accounting services.  While adoption and use of technology was not named as the top item on the list, capabilities which can be rendered only if such adoption occurs were.  In short, it’s not the technology that clients demand, but the level of service that professionals can only deliver by embracing advancements in technology and applying them to the client engagement.

The report and article placed a specific focus on trends relating to technology adoption and use in the professional practice, and establishes a foundation for firms to understand why technology is and always has been a key factor in the success of the CPA-client relationship.  It’s not that the accounting professional must become a skilled technologist and promote high technology to the client.  Rather, the success factor rests with the firm’s motivation to implement technologies and tools which will improve their ability to deliver more (and more valuable) service to the client in a more direct and timely manner.

The survey’s two critical questions posed to small business owners who use the services of a CPA were 1. What factors played a role in your decision to leave your former CPA?, and 2. What types of services would you like to receive from your CPA?   Both questions are pretty straightforward, and the top responses from surveyed SMBs were equally unambiguous.

To the first question (factors playing into a decision to leave former CPA), the top two answers indicated that reactive and/or unresponsive are the problems which ultimately cause a small business owner to change accounting professionals.  The top response was “Former CPA didn’t give proactive advice, only reactive”.  The close second response was “Former CPA had poor responsiveness”.

Unfortunately, these responses more than accurately describe many professional firms and their approach to client service.  These firms are perfectly content with waiting for clients to deliver after-the-fact information, delivering reports long after their relevance has past, and providing no sense of urgency in helping clients address business issues facing them here and now.  These firms are content to work with their write-up and trial balance solutions, depreciation and amortization and tax products – and give little consideration to how they could adjust their operation to a better, more relevant and rapid delivery of service and insight to the client.

The second question, “What services do SMBs want from their CPAs?”, was met with the same responses professionals have been hearing for years; small business owners need help with business planning and business strategy and they wish the help would come from their CPA.   It is surprising how many accounting professionals list business planning and strategy among the services they promote on their websites, and then just sit back and wait for clients to ask.  Communication with clients remains relegated to annual reminders for tax information, or maybe slightly more frequent notes about other tax or compliance work to be done.  It may be a bit unfair to place all the blame on the professional.  Regulatory and reporting impacts on business are increasing and are increasingly complicated.  Many professionals find it challenging enough simply to keep up with changes relating to the services they currently and regularly provide.

This is where practitioners should seriously take notice, and accept that the ability to meet changing market and customer demands is by intelligently leveraging technology to accomplish what people and process cannot do alone.

  • It takes information technology to speed up the bookkeeping, accounting and reporting processes; technology is required to help turn information into useful and relevant data;
  • technology facilitates the faster collection of information from and the delivery of information to clients;
  • technology is applied to reflecting numbers as pictures and helping users visualize the meaning of the data, and
  • technology enables the collection and analysis of “big data”, which leads to AI advancements and greater intelligence delivered through the applications businesses use.

The Sleeter Group report clearly demonstrated that small business owners continue to need and want more than just tax returns and post-facto reports from their accounting professionals, and that the lack of attention in these areas pose a direct threat to the small business/CPA relationship.  Professionals can remove the threat by working closer with their small business clients, applying technology and process controls to get better information in a more timely manner, and returning the result with greater insight.  Be proactive and be responsive, and apply the necessary technologies and business philosophy to get there before the client base looks for satisfaction elsewhere.

I’ve said before that small business owners don’t care about the numbers, they care about the picture the numbers paint, and they care about getting to a place where the picture is absolutely beautiful.  With the right tools in place, their CPA can help guide them there.

jmbunnyfeetMake Sense?

J

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Why #Accountants Should Implement #Cloud Services | QuickBooks and Beyond

Why Accountants Should Implement Cloud Services

Most professional accounting service providers, accounting pros included, are recognizing that customers are increasingly demanding lower costs for service but want more flexible methods for obtaining the service. Where the business value of the service provided used to be enough, providers are now expected to deliver their services how and when clients want them delivered.

Evidence of the mobile and social impacts of technology is visible everywhere, and no business is immune to the requirement to adapt or perish. Rather than viewing the shift in technology application and use as a threat to previous well-rehearsed process models, wise practitioners are finding opportunity to change things around a bit, facilitating workflow and process improvements and creating new opportunities where they didn’t previously exist.

Breaking Down Time and Distance Barriers

via Why Accountants Should Implement Cloud Services | QuickBooks and Beyond.

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Client Experience and Perceived Value: It’s Looking Cloudy for Accountants Working with Small Business

Client Experience and Perceived Value: It’s Looking Cloudy for Accountants Working with Small Business

Every day it seems there is another professional accounting or bookkeeping firm asking questions about how to get new clients for their new “online accounting” business.  Most of these professionals are likely missing the point that their current clients are probably already looking at online accounting solutions and services. Just like in the days when QuickBooks was beginning to take the lead in the market; today’s increasingly popular online accounting solutions are gaining popularity with the direct users, and are bringing those solutions to the professional community (not the other way around).  Professionals who wish to build their businesses on what the market demands would do well to recognize that the push to the cloud coming from their clients is a reflection of past activities, and firms riding the wave are much more likely to see success than those fighting it.

In reflection, remember that QuickBooks, unlike the other business accounting and financial products at the time, was a retail product marketed to and sold via retail and direct-to-customer outlets rather than via a channel or reseller approach.  At that time, State of the Art Software (which became Peachtree and then Sage 50) was the solution preferred by most accounting professionals, yet more and more small business owners would come to the professionals with the QuickBooks product already in hand, so accountants threw up their hands and adopted (if not embraced) the software.  Over the years, QuickBooks became the “go to” software for small business accounting, and many professional firms didn’t just gear up to work with it, but went as far as developing standards and practices based on the product.

With the introduction of high-speed broadband access, business Internet connectivity and affordable remote/mobile service, businesses are now finding that their options for shopping for, purchasing and implementing various solutions to business problems is possible at any time and from anywhere.  Even more, social computing and the blurring of the lines between personal and business use has made it all but assured that new business owners will seek online solutions where they can access business information and perform business-related activities regardless of location or mode of access.  This is what they have come to expect as consumers of information and services, and the expectation extends no less into their small businesses.

Professional firms must recognize that these evolving paradigms represent opportunity, taking advantage of cloud-based, real-time collaboration models to provide more timely value to their clients.  Where the more traditional on-premises and paper-based models have flourished, the online working models representing lean process and sustainability become the focus.

The movement to the cloud for small business accounting started with the consumer, who ultimately became the small business, and who may eventually become the big business. The professionals who recognize the value of and wisely adopt cloud technologies and online application services in their businesses – specifically in terms of how they work with clients and deliver value – are the firms which recognize that the client experience and perception of value delivered are the most important elements of all.

jmbunnyfeetMake Sense?

J

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Why Accounting in the Cloud?

Why Accounting in the Cloud?

Business owners and managers need to keep close control of their financial data.  They need to know where they stand at all times, and having information available to make business decisions is essential.  When the financial information is in the office but the owner isn’t, how can wise decisions be made without access to supporting data?  They can’t, and that’s a problem.  The solution is simple: work in the cloud.

A cloud computing model properly applied to accounting and bookkeeping systems helps businesses of any size keep their financial data and accounting applications in a safe a secure environment, yet accessible to those who need it.  By locating the business applications and data in a protected central location, access to programs and data sets can be provided to authorized users regardless of location or computing platform.  For a small business owner, this means that working from home or on vacation can be as productive as working in the office.  In larger businesses, cloud-based accounting means the accounting department, CFO and financial advisers might all access the same financial records and applications no matter where they work from.

Cloud computing and hosted application models applied to accounting and bookkeeping represent a viable option for managing, securing and providing access to critical financial information.  Businesses outsourcing their accounting or bookkeeping work find that cloud based approaches offer workflow and process efficiencies to help get the necessary information in the hands of those who need it, quickly and efficiently.

Keeping accounting and bookkeeping systems safe yet available, providing business decision makers with the flexibility of accessing their financial data from anywhere and at any time is a highly valuable service. Accounting and finance professionals can act as the trusted adviser to their clients, providing important business insight and information, with guidance in developing cloud computing and online accounting approaches being among the benefits the firm offers.   Working closer with clients allows professionals to produce better, more accurate and insightful results.   Cloud computing models remove distance barriers and allow professionals and their clients to work more collaboratively with applications and data than ever before.

Many firms are just recently discovering the relationship between technology adoption and business competitiveness.  Those that embrace new computing paradigms gain the ability to meet client requirements in innovative, efficient and timely ways while those that do not adopt these new models continue to struggle, unable to communicate value and differentiation in their service offerings.

There are some recognized truths in business, and one is that is isn’t what you know but who you know.  Another truth, an understanding that is just now being fully recognized, is that it’s not what you do, but how you do it that matters.  Accounting and bookkeeping for business is absolutely an area where cloud computing and the wise application of technology and service can improve cost efficiency, accuracy and turnaround times, allowing the firm to provide a higher level of service to clients.  Accounting in the cloud is a technology-enabled approach which propels the firm into an entirely new range of capabilities and potential service offerings, reaching higher levels of performance and profitability.

Joanie Mann Bunny FeetMake Sense?

J

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Efficiency and Value with Cloud Accounting

For some accounting professionals, the problem is finding a way to provide services that are valuable to the client, and doing it in a way that makes it profitable for the provider.  Outsourced and online accounting models are the answer, employing innovative tools in the practice and with clients: tools and resources necessary to get more informed and run the business better.

accountingCloud

With online accounting solutions the firm is able to increase profitability with the range of services offered, often adding clients and work without hiring more personnel.  Online solutions allow professionals and their clients to work from anywhere at any time, providing both with the freedom to focus on core business capabilities (and lifestyle).

Reducing the requirement for sophisticated on-premises technology may mean providing everyone with the ease of use and security of server-based computing models, which is among the benefits of a cloud IT approach.  Centralizing and managing applications, protecting valuable data resources, and streamlining business processes are among the benefits to be achieved with an outsourced, managed application hosting solution.  Businesses who outsource their IT management often realize an increased capacity to do business simply by leveraging the cloud to make the current working models more efficient and effective.

Leveraging mobility and real time access is also about increasing the overall range of opportunity to deliver value.  Contractors, employees and clients all find improvements in getting the information they need when it matters, and the firm finds a greater agility in meeting client demands and expanding service offerings.

Cloud computing and online accounting solutions have proven the viability of anytime, anywhere working models, and professional accounting practices of all sizes and orientations are realizing the benefits of working closer with their clients by applying them to the engagement.

Cloud accounting is really about improving the profitability of the accounting practice while delivering higher levels of service to the client.  The movement of information from one place to another; translating data from one form to another – these are the processes representing the cost and inefficiency in the practice, and are specific areas where a collaborative, online approach may introduce new service efficiency and value.

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It is worth noting that “cloud accounting” and online accounting models do not necessarily require the use of a SaaS solution.  QuickBooks Online, Xero, Freshbooks – these are new small business offerings that exist purely on the web.  QuickBooks desktop editions can be “cloudy”, too, when they’re hosted by an authorized QuickBooks hosting provider.  The point is not necessarily to use web software, but to approach IT management and systems from an outsourced perspective, allowing for centralized management and administration and delivering secure remote and mobile access.  The systems should facilitate the working model, not force it.

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The Productivity Paradox: Accounting for Returns on IT Investments

The Productivity Paradox: Accounting for Returns on IT Investments

There has always been somewhat of a struggle between the IT department and “management”, much of the difficulty existing with the need to demonstrate clear returns on investments for IT purchases.  Unfortunately, expenditures in information technology are often the result of short-term views of long-standing problems, applying “solutions” that do not fully address the requirement or which do not deliver the productivity or performance gains expected, particularly in a dynamic and rapidly changing business environment. The assumption is that a wise investment in information technology will result with improved profitability and performance.  Demonstrating this on paper is not always easily accomplished.

There is a great deal of research on the subject of accounting for returns on IT investments.  Some of this research describes “The Productivity Paradox”, referring to early studies on the “relationship between information technology and productivity, and finding an absence of a positive relationship between spending on IT and productivity or profitability”. [1]  Previous to the emergence of cloud computing and widely available remote and mobile technologies (and now possibly even more with the prevalence of available options), businesses invest heavily in IT infrastructure and applications which deliver nominal benefit to the business when measured against the cost of acquisition and implementation.  Heavy IT investments are made with little or no measurable benefit to profitability, even if operational performance improvements are created.  In many cases, the difficulty in “proving” benefit from information technology investments rests with the lack of information relating to impacts in non-operational areas, such as with investors, auditors or analysts.

The early research has become a foundation for making the argument that accounting professionals should be more directly involved in determining the value and impacts of IT investments – due largely to the fact that accounting professionals are generally familiar with the variety of formulas and approaches which become relevant in measuring the effects of IT purchases.  Information technology spending will result in short-term impacts, but will impress on the business over the longer view as well. With a foundation in accounting principles, valuation and analysis, and accompanied by IT knowledge and experience, management accounting benefits from an improved ability to recognize the relevance and value in IT implementations even where no direct profit improvement is visible.

Can difference in firm performance be explained by differences in IT investments?
Can differences in firm performance be explained by differences in IT investments?

Emerging technology models are having huge impacts in business capability as well as risk, and this new paradigm requires that accounting professionals apply their skills to understanding more fully the influences from and results of IT spending in the enterprise.

Having a basis for studying valuation and recognizing the good and bad of focusing on various key measurements (return on assets vs equity vs sales vs investment…) is essential in developing a “formula” for predicting impacts of and potential returns from IT spending, and solving the puzzle that is the productivity paradox.

jmbunnyfeetMake Sense?

J

[1] Journal of Information Systems Vol. 16; “Returns on Investments in Information Technology: a Research Synthesis”