stroy the margins of the future. Accountants
are trained that time is money, but clients
are in the results economy and not the effort
economy. This is an area that firms must ad-
dress and move to fixed-price agreements
that define the scope of the work, terms of
payment and client responsibilities. A change
order clause should also be included, e.g.,
“Services outside the scope of this agree-
ment may be contracted for with the use of
a change order approved prior to doing the
work and additional fees for change orders
are due 50 percent at signing and 50 percent
Staff should be trained to recognize op-
portunities and see that change orders are
utilized. This can be part of staff and part-
ners’ balanced scorecard or performance
plans. The construction industry profits sig-
nificantly from change orders and firms can
do so as well.
By defining processes and scope, firms
reduce their risk and increase their chances
of winning the contract. Clients do not like
agreements with “hours times dollars” clauses. They feel they are taking all of the risk and
there is no reward for efficiency.
Another method of pricing that works is
“matrix pricing,” where certain criteria — e.g.,
size in revenue, number of employees, or locations — determine the fixed price. Some
firms offer a menu of services to include in
the fixed-price agreement where the client
selects and pays monthly (often in advance).
Clients view this process favorably, as it limits
their expense to a known amount prior to
the engagement. Change orders protect both
parties by not increasing price to account for
the unknown or increasing the price for inclusive services that may not be required. The
key is discussing pricing up front and using a
well-defined fixed-price agreement.
FROM PAGE 23
Technology is the performance accelerator.
Often a gap exists between IT profession-
als and business owners. The CPA’s position
as “trusted business advisor” can provide
extreme value in bridging this gap. Owners
need to understand how technology can
benefit them and IT professionals need to
understand the company’s vision. We call
this bridging the gap. The rapid growth of
“cloud computing” is changing the rules of
the game. Practice partners need to under-
stand that technology is a strategic asset and
a differentiator. Clients expect the CPA/trust-
ed advisor to be knowledgeable in the area
of technology. This knowledge should gener-
ally come from a team approach.
on the right
is on the
left side of
You must learn and implement the technology as you name, package and price these
value-added services. The accounting firm
will have the opportunity to own the system
and processes, rather than work with multiple systems owned by the clients and often
managed by poorly trained or incompetent
personnel. The American Institute of CPAs,
through CPA2Biz, and other vendors such as
Accountants World, Thomson Reuters and
CCH are all at various stages of providing
firms with these capabilities.
Virtualization and ubiquitous bandwidth
will enable firms and clients (the community)
to share resources and expand capabilities.
This requires a different type of IT leadership,
one that focuses on innovation, increased
revenue and improved communications.
Firms must also grow their people through
additional IT and soft skills — a training/
MOVE UP THE VALUE CHAIN
The first four strategies will allow you to move
up the value chain, while continuing to provide clients with value at increasing margins.
Process improvement, packaging, naming
and pricing are all strategies that impact margins. Technology and change orders provide
efficiency and protect margins. Moving up
the value chain from payroll, write-up and
tax return preparation to controllership and
CFO functions such as budgeting and business planning are certainly within the reach
of the majority of firms. These services are
typically valued higher by the client than are
the compliance-based services.
Clients can generally source these services at rates that are favorable to both the
firm and the client. The cloud allows much
of this work to be done from anywhere at
any time, so it provides another favorable
dimension. Increasing value and innovation requires different thinking, along with
planning, processes and people to execute.
Today’s economy and emerging technology
put the CPA in an enviable position as the
most trusted business adviser to capitalize on
this opportunity. Pricing these services at a
fixed monthly fee with a provision for change
orders is an attractive business proposition to
most small and midsized companies.
You must simply ensure you have the capabilities and match those capabilities with the
opportunities. Your Web site can be a valuable asset in creating a client-friendly community utilizing portals, aggregation of information and resources. To date, most firms
have only focused on portals as storage sites
for documents. The real value comes from
the aggregation of information at the start of
the project. This can often be automated with
triggers that automate notices, and improve
workflow and project management.
These strategies should be part of the firm’s
strategic plan. A strategy is nothing more than
a set of hypotheses about how a firm expects
to achieve its desired results. Next you will
need champions who are willing to be held
accountable. This requires resource allocation and the authority to go along with the
A team effort and buy-in to the firm’s vision
are critical. As Jim Collins states in Good to
Great, you must get the wrong people off the
bus, the right people on the bus and in the
right seats. If this is a problem in your firm,
utilize the resources and tools to quickly
determine the players that are in the wrong
positions or need to be traded.
Deal with the issues and don’t procrastinate. AT
INTACCT TAPS MACDONALD
TO HEAD CHANNEL
SAN JOSE, CALIF. — In a move to accelerate
its value-added reseller and CPA channel initiatives, cloud accounting provider
Intacct has hired channel veteran Taylor
Macdonald as its new vice president of
channels. Macdonald has over 20 years
of experience in the accounting and
enterprise resource planning software
channel space, from running his own tech
consulting and reseller firm — Macdonald Consulting Group — to heading up
channel programs at Sage and Deltek.
Intacct formalized its channel program
ASI OFFERS NEW BUSINESS
LAKE FOREST, CALIF. — Advanced Systems
Integration Inc. is now offering its new AX
Smart BI product for Microsoft Dynamics AX. The new solution is powered by
timeXtender, QuickCubes and Targit. It is
designed to streamline the business intelligence design process by auto-generating the underlying project code.
ASi’s new BI Suite allows users to
select from various templates and adapters designed to auto-generate data
warehouses and cubes for Dynamics AX
using the visual drag-and-drop approach.
The solution permits organizations to
combine data from Dynamics AX with
information from other sources as well.
The adapter synchronizes with Dynamics AX, keeping information current at all
times. ASi’s new BI suite is compatible
with most reporting tools, as well as other
ERP business systems.
BROADPOINT AND TENSOFT
SAN JOSE, CALIF./BETHESDA, MD. — Tensoft,
an ERP and supply chain solution provider for the semiconductor, software and
high tech industries, has formed a partnership with BroadPoint Technologies.
BroadPoint will promote and deliver
the Tensoft Revenue Cycle Management
Suite. The agreement was facilitated
through Microsoft’s partner channel
builder program, which is designed to
foster successful business relationships
among Microsoft partners. The Tensoft
Revenue Cycle Management Suite brings
together revenue, billing and contract
management functionality for software
and other technology companies.