Keeping up with technology in accounting

Both in specific practice areas and for firms as a whole, technology is automating and streamlining accountants’ work, even as the tools themselves grow more integrated and more useful, according to industry experts from the CPA Consultants’ Alliance.

In “CPA Firm Technology Trends,” one of the CPACA’s “Issues and Answers” video series, members of the alliance examine how new developments are impacting every aspect of the modern accounting firm.

Starting in tax, the panelists pointed up the importance of technologies that organize the work, rather than those that prepare or file returns.

“What it really comes down to is having an integrated workflow tool,” said Roman Kepczyk, director of consulting at Xcentric. “When we consult with firms, we find that there are long-time processes for tracking all aspects of the process, but these all seem to be in different applications. We need a way to have everything centralized in one place, so anyone who’s authorized to see it in the firm has easy access to that. Workflow tools are the solution. In smaller firms, that may be practice management projects, which are modules that allow them to track all those steps pretty cohesively. The problem is that, as you get much larger, the sheer volume of returns, makes those somewhat kludgy, so we see firms implement dedicated workflow solutions.”

“Having a workflow solution is a no-brainer in tomorrow’s CPA firm,” added Dustin Hostetler, chief innovation officer at Boomer Consulting. “You can’t properly manage a tax practice without having that integrated workflow solution to automate the movement of the tax work through the office. We’re finally there where we can have that paperless tax process from engagement acceptance all the way through to e-filing of the return, which not only benefits us but gives our clients a much friendlier client experience.”

For the other major components of the traditional accounting practice – accounting and auditing – the impact of technology is often felt more at the level of the grunt work that bookkeepers and auditors slog through.

“Automation is the big word here,” Hostetler said. “More and more, the A&A side of firms is becoming more and more automated. You’re seeing some of the artificial intelligence software coming into the market. Some of the Big Four have their own homegrown solutions to automate more of the workpapers and work you traditionally do during fieldwork.”

Citing the growing availability of such tools for auditors and accountants at firms of all sizes, he added, “That’s going to change the mindset of the audit practice from compliance to consultative. As automation and efficiency get driven into the audit practice, there’s going to be downward pressure on fees” – and firms will need to counter that by moving to more value-added advisory services.

Kepczyk noted two technology trends that are streamlining access to audit and accounting data: “One trend would be the centralization of data so that it’s run on servers, and rather than checking out binders and working out in the field, all the work is done on the servers. Not only can the field auditor access it, but maybe a manager in a different location or the manager in the office can look at those workpapers. The other benefit of having everything centralized on the services is that, from a security perspective, there’s no more data residing on the local workstation, so if a laptop happens to be lost or stolen, the risks of a security breach are significantly reduced.”

“The other thing we want firms to take a look at is that we’re seeing a trend towards going to a single audit suite for not only the engagement binder, but also for the workpaper programs,” he added. “Can we put all of our information in one place? … We’re seeing vendors put everything in one bucket to eliminate the lack of integration between products.”

Sarah Johnson Dobek, president of Inovautus Consulting, took up the theme of integration as one that’s being felt all across tech-savvy firms.

“One of the challenges that many firms have had over the years is that all of the software you use on the tax and audit side tends not to talk to each other,” she said. “That’s gotten much better over the years, but a lot of the information still resides in these disparate programs and there hasn’t always been a way to get that.”

Now, she explained, more and more software vendors are developing special tools that allow information to flow out of their applications more freely. “We’re seeing firms really focus on integration of software so the data is being provided to the marketing and business development professionals that are charged with growing the firm, so it’s getting into CRM systems, and they’re building special integrations to allow all the information to come together.”

All of this is actually being felt beyond firms themselves.

“The other impact we’re seeing of combined technology is that it’s helping enhance the client experience,” Dobek continued. “This is a huge focus for CPA firms right now, to really look at what is their client experience. Because of the move toward building a much more consultative practice, client experience has really risen to the top in this move away from compliance-only services. A lot of firms are starting to focus on how they can do this better, and technology is going to be a huge aid in being able to figure out some of those touchpoints – everything from notifying clients where something is in process, to how they use the portal, to how your staff engages with it.”

The video covers a number of other critical technology trends, including cloud adoption, remote work, and more; it and the other three videos in the CPA CA “Issues and Answers” series are available on the alliance’s YouTube page.

Source: Accounting Today

Winning the coming divergence in accounting

There have always been differences between the biggest firms in accounting and the rest — the 97 or 98 percent of firms that have, say, fewer than 20 people. Both groups serve very different client bases, for instance, using different tools; they recruit employees in different ways and offer very different careers. Yet at bottom, accountants have always all been recognizably of the same tribe, with more similarities than differences, performing work that is — allowing for scale — much the same.

But that may not be the case for long, according to Illinois CPA Society president and CEO Todd Shapiro. A series of technological innovations — from big data, to artificial intelligence and machine learning, to Blockchain and robotic process automation — are in the midst of completely reshaping the services of the largest firms, and the skill sets of their employees. Already, the Big Four are looking to hire more entry-level staff with skills in data analysis, and the expectation is that being savvy in technology will soon be as valuable as more traditional accounting skills (if not more so) in looking for a job at the biggest 3 to 4 percent of firms.

But for the rest? Not so much, according to Shapiro: “If you talk to the 43,400 firms with less than 20 people who service Main Street America, they’re not using Blockchain,” he said. “It’s going to take time. It’s not now, not next year, not in seven years. ... Data analytics aren’t going to be for small businesses in the next seven years.”

And while the Big Four and their like have always adopted new technology more quickly, the major difference here is that the skills required of the accountants using the technology will be different, too, which was not the case before. And that’s going to lead to a major split in accounting over the next five to seven years, Shapiro suggested. “It’s going to be more of a divergent profession than we’ve had in the past,” he said. “Is a small firm going to be using computers to read contracts? Their reconciliations won’t be done by computers. And what if a Big Four person wants to go to a small firm? They’re going to say that a computer does most of those tasks, while the small firm will need someone who can do all those tasks. The small firm will say, ‘I don’t have drones doing inventory.’”

Over the next five to seven years, he suggested, this divergence between the staffing demands at the more tech-forward large firms, and those of the more traditional smaller practices, will lead to two different types of accountants, which will complicate many of the profession’s traditional pathways for the near- and mid-term.

In the long run, though, Shapiro believes that progressive midsized firms will drive a reconvergence, hiring the new kind of accountant from the Big Four, and smaller firms will eventually follow along, driven in no small part by their small-business clients: “Even the corner grocery store 15 years from now will have sold out to younger generations that are more tech-savvy,” he explained. “And those businesses will begin to adopt RPA for inventory, accounting, and so on. So who’s going to take care of those businesses?”

His analysis of the future is compelling, if slightly sobering. But my question is this: Do small firms have to wait? Can’t they start diving into these new technologies and services now?

Yes, the expense currently involved in some of them can be prohibitive — but that won’t always be the case, and there are many tools (in data analysis particularly) that are affordable right now. Why not start building those skill sets and the base of those new service offerings sooner, rather than later? One of the beauties of technology is how it lowers barriers to entry — if you’re willing to try.

The time to win the divergence is now, for firms of all sizes.

Source: Accounting Today

Ted on Tech: When the power goes out

Daniel Acker/Bloomberg

With the United States under siege by hurricanes this season, individuals, businesses and accounting firms in affected regions are finding their disaster plans tested to their limits. While firms can back up data, operate in a cloud hosted environment, invest in generators and take other such measures, there are always gaps during disasters of scale that make it difficult to continue operations seamlessly. What’s the solution?

I have to admit (and tempt the fates) that I’ve been pretty lucky over the years as far as power failures go. Through blizzards, superstorms and hurricanes, I’ve suffered the occasional blackout and power outage. But for the most part, they haven’t lasted more than a day or so. At the time I was originally writing this, I was thinking about coming up with a more formal plan for those times when the power goes away.

When the power goes out, it’s a real pain. I have several UPS systems on my network, but to be honest, they aren’t really helpful except to let me power down the PCs that are connected to them. But about a week after I originally submitted this blog entry, Texas was hit by Hurricane Harvey. Then Hurricane Irma decimated the Caribbean and large areas of Florida. Given the magnitude of the disasters, it was time to rethink my initial blog entry.

My main concern is that just about all of my work is done on computer, and a good deal of that necessitates using the Internet and especially email. So when the power goes down, I can work on a laptop, at least to some degree. But my entire network goes down since very few of the switches, access points, or my cable modem are on a UPS. And without the network, my Internet access also disappears. Even more problematic is that my Internet gateway/router is a server mounted on a server rack in the basement. There’s an APCC UPS proving backup power, but it’s not going to keep the gateway server running for very long even if I have a UPS on the cable modem. Creating a low power-draw network with a second router in parallel with the current one is a possibility, but kind of defeats the whole purpose of having the gateway on a server.

So I need to think about a new strategy. APCC sent me an new 50 watt BackUPS-Connect model that has a built-in removable battery pack which can be used to charge a cell phone or tablet. It’s going between my Griffin Technology Power Dock and the wall outlet. The Power Dock is a neat little storage device that holds five tablets vertically and lets you plug in all of the power cords from the tablets into the base. A single power supply then plugs into the wall outlet and keeps everything charged. I’ve had this for several years, it’s relatively inexpensive, and it works great for organizing and powering my tablet collection.

It should work even better with a UPS to keep the charging current going during a power failure. One of my tablets is an iPad Air with a keyboard case that has a much longer battery run time (when fully charged) than my laptop. Another is a Microsoft Surface 3, again with a keyboard. So between the two of them I actually have several days of usable computing time.

I can keep working for a day or two during a power outage using a laptop and/or tablet plugged into a hefty UPS to keep the laptop battery topped off. And that might be an affordable power plan for some of you with fairly simple computing needs.

But Internet access is the part where I get stuck. In the past, I’ve occasionally turned my iPhone into a hotspot that connects to my cellular service and provides Wi-Fi access to my laptop or tablet. If I plug my phone’s charger cable into the removable charger pack on the new APCC UPS, it should give me more than enough hours of connectivity. That’s a solution, but not an optimum one. Tethering to my phone provides internet service but it’s fairly slow, even at 4G cellular data speeds, and the data charges add up quickly on my plan. But it does provide Internet connectivity in many instances if I really need it. And the data charges are just something I have to eat if I need the Internet to finish an assignment or engagement, or need to use my email accounts. A stand-alone wireless hotspot is another option, but I don’t know if these work any better than just tethering my laptop or tablet to my iPhone. It doesn’t seem that they would, as both are 4G devices.

But given what happened in Texas and Florida, that’s not a guaranteed way to provide access to the Internet and your critical business emails. In a real disaster, the cellular infrastructure goes away along with the power. Your clients will probably understand if you have a disaster plan in place and need some time to recover. Contacting them, though, is a concern, especially if you don’t have access to your email.

There is a viable alternative, but it’s expensive and not 100 percent reliable — and that’s satellite phone and data. The Iridium network provides both voice and data accessibility, and is billed on a per minute basis. It’s not cheap, but there’s a large network of satellites orbiting the planet, so there’s usually one in range of your device. As a backup for critical communications, it’s worth looking at. The downside, aside from cost, is that in a real disaster there’s a fair chance that the available bandwidth will be swamped and you might not be able to get through or check email immediately. Still, it’s better than nothing.

Continuing to operate during a power outage that lasts beyond a few minutes or so is a real problem without a simple and affordable solution that I can see, especially if the infrastructure is damaged. With much of our livelihood so closely tied to the use of advanced technology, we’re in a real bind when the power goes out. We all need some sort of backup plan to deal with this kind of problem. I’ve yet to come up with a good affordable one for my set of needs and circumstances that I feel positive about.

Source: Accounting Today