BY L. GARY BOOMER
Can you get there from here?
‘Accounting firms are a business,” said Lynette Downing, business analyst at the CPA firm of HLB
Tauges Redpath, in White Bear Lake, Minn.
A very profound statement, yet the systems
that most firms utilize don’t integrate to support a business. Take a moment and think
about how everyone, including the vendors,
has talked about an integrated system for
the past ten or more years. Are we any closer
today than we were 10 years ago? I am confident I can find differing opinions. Why is
this the case, and what should firms do to
break through the ceiling of complexity and
simplify their processes in order to leverage
today’s and future technology?
Vendors like CCH and Thomson have been
investing millions of dollars into next-genera-tion systems, but they have the unenviable
task of maintaining legacy technology and
can’t totally focus on Software-as-a-Service.
The vendors’ investments plus the resources
firms have expended in an attempt to make
integration work make me ask the question:
Can firms get there from here?
HLB evaluated their systems and determined that they were not going to be able to
make the pieces fit and operate efficiently
without going to an ERP-type system. They
chose Maconomy and are in the process of
implementation. This is a very good firm,
with great IT skills and leadership, yet they
will readily admit that changing paradigms
and processes is not an easy task. You can
see how complex the problem is by making
an inventory of all the applications that your
firm uses, from core applications to the back
office. My guess is the number will likely exceed 50 if you include QuickBooks versions
used by clients and supported by the firm.
Dan Sullivan, my coach and founder of The
Strategic Coach, has always said, “You must
simplify in order to break through the ceil-
ing of complexity,” and I believe his visionary
statement applies when it comes to devel-
oping a system for today’s accounting firm.
Developing a requirements list with priori-
ties classified as “must have,” “nice to have,”
and “didn’t even know we could do that” is
not an easy task for even a seasoned business
analyst like Downing.
Data aggregation — eliminating data
entry.
Privacy and security.
Flexibility.
Hardware-agnostic.
From a quick review of this list, I am sure
you will conclude that it is incomplete and
that most firms don’t currently have many of
these systems and features today — so why
do they need them in the future?
Given the fact the old client/server ap-
proach hasn’t provided integration for the
past 10-15 years, why should we believe the
it happening on a global front, rather than
just in the U.S. It is time for firms to change
attitudes toward how to make the cloud work,
rather than why it won’t work.
It sounds smart to be
negative about change.
FOLLOWING THE U.S.’S LEAD
We used to have an edge in the U. S., but I am
seeing firms from other parts of the world
move forward by leveraging the cloud and
integrating systems that leverage new technology, processes and a global workforce.
I recently visited New Zealand to review
Xero, after researching them for several
months. I was thinking of Xero as a viable solution for client accounting and firms moving
up the food chain into more controller and
CFO-type services. I was pleased to see Xero
not only does client accounting in a more efficient manner, but it also solves many of the
firm’s problems by integrating cloud-based
solutions with the accounting engine. I was
skeptical and thought only the smaller firms
that did client accounting were using this type
of solution. I must admit, I was pleasantly
surprised to learn that members of the Big
Four and larger regional firms are using the
solution in New Zealand, Australia and the
U.K., with some early pioneers in the US.
While cloud-based systems won’t meet
all of the needs of a U.S. firm today, they will
meet many of the requirements, like e-mail,
document management, knowledge management, firm management and performance
management. In order to get the concept, you
must change your thinking and focus on how
firms can eliminate or automate those com-moditized services that provide little or no
value, even if they are necessary (e.g., data
entry and expense reporting). By focusing on
higher-valued services like real-time reporting and business intelligence, the value of the
CPA increases exponentially.
Gary Boomer, CPA, is the president of
Boomer Consulting, in Manhattan, Kan.
Let me provide a brief checklist of features
today’s systems need in order to meet the
needs of a growing accounting firm:
Scalability.
Easy to use.
Affordable.
Remote access.
Database-driven.
Integration with the general ledger, time
& billing, accounts payable and receivable.
Online billing, collections (credit cards
and ACH payments), and bill payment.
Workflow.
Document management.
Records retention.
Portals.
Project management.
E-mail management.
Integrated with MS Office-SharePoint.
Client relationship management.
Reporting.
Business intelligence.
International currency conversion.
Integration with core applications like tax
and financial reporting.
Knowledge management.
Research.
Talent management and development.
Web site, marketing and community.
Performance management.
vendors will resolve these problems and challenges with outdated tools? Enter the Internet, the cloud and new systems based upon
these tools. In the cloud world, some vendors
are linking their software at the server level
so that they can simply turn on integration.
This eliminates the risk, costs and stress of
integrating various applications internally.
Are they all ready for prime time? No, but the
benefits are promising and other industries
are rapidly leveraging Web-based systems.
It is time to think differently and focus on
faster-better-cheaper-easier. That means we
are going to have to evaluate everything; it is
going to take everyone’s focus and commitment to compete in today’s economy.
What we have is a paradigm shift, and it is
difficult for many CPAs to leave the comfort
of the past and venture into the future with a
different set of opportunities and risks. This
is not new to the accounting profession, starting with mini computers, personal computers
and networks. Change is constant and accelerating. Yes, privacy, data security and bandwidth are all issues that need to be addressed;
however, what I am learning about the cloud
is that it is far more connected and easier to
integrate systems that are far more intelligent.
It sounds smart to be negative about change,
but ultimately change does happen and I see
OUTDATED PARADIGMS
Even if the technology were all available to-
day, most firms would be unable to properly
leverage this asset due to old paradigms:
Time determines value. (Clients deter-
mine value, not time or effort.)
