Technology Infrastructure of a Next Generation Accounting Firm

Transcription

1 Technology Infrastructure of a Next Generation Accounting Firm A Practical Guide for Firm Owners and Managers by M. Darren Root 1 Rootworks.com

2 Technology Infrastructure of a Next Generation Accounting Firm A Practical Guide for Firm Owners and Managers M. Darren Root One of the key components of the Next Generation Accounting Firm (NGAF) journey is the design of your business model, which Rootworks defines as: Who you want to serve, What you want to do for them, and How you will deliver your products. The How of your business model is comprised of your technologies, systems and processes woven together to create a well-defined, tightly integrated machine that serves as an engine, driving you closer to your vision. The technologies of a NGAF evolve as the right technologies become available and more reliable. But like all of the NGAF concepts, it is important to begin with the end goal in mind. Therefore, prior to developing your business model and selecting the technologies to support it, you must clearly articulate your vision (aka your desired future). Starting with the end in mind will reduce the pain of technology implementation. Technology should be considered a tool to help you accomplish your end goal, not the end goal itself. As such, each part of your firm s technological infrastructure should be a carefully considered prior to implementation because the wrong selection can be very costly in terms of lost productivity, wasted energy and the frustration of your team. An equally important element in the success of your business model is how thorough the implementation of your selected technologies is. Incomplete or improper implementation of technology becomes a real distraction creating frustration and inefficiencies. Many of us will agree that the various stages associated with technology changes are painful. The conversion process, the implementation phase, the learning curve and staff training these stages are generally annoying, to say the least. So you want to do all that you can to minimize their negative impact on your firm. There are two important steps you should consider to help reduce the pain and effort related to the adoption of new technology: 1. Start with a thoroughly vetted solution one that is the right decision, given your firm s end goal. 2. Develop a comprehensive implementation strategy including a defined implementation schedule. This is really important! Don t allow your implementation to drag out for a long period of time; otherwise, all you will do is prolong the pain. The technological foundation of your NGAF business model Now let s take a look at how the technologies of a NGAF serve as the foundation of your business model. Your business model is comprised of the following 2

3 components: your firm s infrastructure, practice management tools, and web and mobile solutions. These components provide support that enables you to deliver the What of your business model the welldefined products and services that meet the needs of your ideal clients. Let s explore each component of the business model in more detail: Infrastructure Systems Infrastructure systems are the systems you use for , telephone, video conferencing, printing, technology hardware, conference rooms, system backups and your primary firm network architecture. It s important to develop a strategy for your infrastructure systems before moving on to the next component. As you think about your infrastructure strategy consider the following three approaches and which one might work for your firm: The in-house approach This involves housing all of your technology solutions within the confines of your firm s four walls. This includes your computer servers, backup solutions, telephone and video conferencing hardware, etc. This approach is challenging without the in-house technology talent available to manage it. The cloud-based approach This approach requires you to research and identify the cloud-based vendors that can solve each of your specific needs. It may include a server hosted at a data center; cloud-based phone, video conferencing and solutions; and an off-site cloud backup solution. More and more businesses are embracing the cloud-based approach, but you need to consider the challenges of connectivity from one cloud vendor to another as you plan your overall strategy. The hybrid approach As you may have guessed, the hybrid approach is a combination of the inhouse and cloud-based approaches. You may choose to have your hosted on the cloud, The wrong solutions can be costly in terms of lost productivity, wasted energy and team frustration. 3 while your phone system is securely locked in your phone closet at your office. This is the most popular approach today because many entrepreneurs are in the process of moving some of their systems from being in-house to cloud-based, but again, you need to consider the challenges of connectivity from one cloud vendor to another as you plan your overall strategy. Four criteria you can use to select your NGAF technologies Integration You should consider integration as a key decision point with any solution you evaluate as part of your overall business model. For example, when considering the solution you choose for managing your company contacts (e.g. MS Outlook hosted on Office365) think about how well your solution will integrate with your phone system if that s important to your workflow. Another example: If you choose to have your tax software hosted by a vendor, consider how well the chosen software will integrate with other solutions you may want to implement that will need to access to your tax data. Ease of Use Do not confuse basic solutions with those that are easy to use. The best technologies do not require you to sacrifice functionality or sophistication for intuitive usability. Look for solutions that truly fulfill your needs but are also designed to be easy to use. Access Consider how important access to the information within the system is to you and your team. Data accessibility is becoming one of the most important decision points for entrepreneurs. Access to information anytime, anywhere and on any device is becoming a standard expectation for many clients. Even if you think access is not overly important to your organization today, given the rate of technology change and adoption, it is worth thinking ahead to how important access may be for you and your team in the future. Functionality Vet each solution you consider thoroughly for its overall functionality based on your needs. Too often, I see entrepreneurs casually select

4 solutions without doing due diligence. If the solution is not right, you will waste countless hours during implementation only to find the solution is not a good fit. If you implement an ill-fitting solution, productivity and team satisfaction will suffer as a result. Practice management: The cornerstone of your NGAF platform Practice management is the hub of your accounting firm and includes components such as: A single client database (SCDB), which refers to a database that requires you to enter your client or contact only data once and it is then integrated everywhere you need it to be. This has been an extremely difficult challenge for accounting technology vendors, but it can, for the most part, be accomplished using a few solutions most notably those developed by Thomson Reuters which have advanced data sharing. The SCDB starts with a contact, connects to a client, then to portals, document management, accounting, and tax solutions. Contacts are also synchronized to your mobile devices. Any application that you consider adding to your platform should be evaluated in the context of how well it works within a single-client database infrastructure. A client contact management solution with the functionality to store and easily access client-specific data like usernames for client logins and, potentially, passwords and client notes. A document management solution allowing you to keep all documents organized, accessible and connected within your practice management system. Data accessibility is one of the most important decision points for entrepreneurs. on the list for an effective practice management system. Each member of your team should have the ability to see the status of any given project at any time. Your project management component should drive the firm s workflow. When one task in a project is complete, the project workflow should automatically trigger the next step in the process to be worked on. The ability to monitor workflow and to report on the status of each project is critical to a firm s efficiency. Web and mobile: Your firm s digital doorway Your website is a place to do business Just as your practice management system is the hub of your internal firm operations, your website serves as the hub of your connection to clients and prospects. Your web presence should clearly articulate your story as a firm, what you do, how you do it, and whom you do it for. Your brand identity is on the world stage and you should be proud of it. Your website is the new front door to your firm, so do not waste the opportunity to put your best foot forward. When you operate a NGAF, the purpose of your firm s website is to provide a place for your clients, and those connected to your clients (i.e. their employees), to do business with your firm. As such, your business model should incorporate an online Client Center as an integrated part of your website. The Client Center will serve as a seamless and secure gateway to all of the solutions that create the platform supporting your business model. This may include a connection to components such as a hosted or online accounting solution, an accounts payable module, or a document management system. Time and billing functionality integrated with your SCDB, which allows for real-time data entry and billing using fixed fee and/or hourly billing options. You should be able to easily access reports showing realization by engagement type, project, staff person and client. Project tracking and task management is next The key takeaway here is that each solution should be seamlessly connected for an elegant client experience. Documents presented via your website must also be easily integrated with your practice and document management solutions. Your web presence should also serve as an information and connection center. This means making it 4

5 easy for clients and prospects to schedule meetings with you online, or even initiate a quick chat session with someone on your team. In addition, you should also consider how to make valuable information easily accessible for your clients and prospects with the ability to connect via video conference for a richer client experience. Your website is the hub for your firm s connection to the outside world. As we move to a more mobiledependent culture, your website must easily adapt to this environment with a responsive design. None of us know what the future holds, so it s also important that your website platform gives you the flexibility to adopt new technologies that will enhance your firm s client experience. Products vs. Services Accounting firms have often considered themselves service providers. However, I refer to them as product providers because I think it s important for accounting firms to design their offerings as products rather than services. Products are more easily defined and the concept of a tangible product is easier to understand, especially when your goal is to deliver them using a systematic approach. As we consider the products delivered by accounting firms, we can divide them in three general categories: accounting, payroll and tax. Whether your firm provides individual or business tax, financial statement or collaborative client accounting, audits, business valuations, consulting and/or payroll, you can group any of these products into these three general areas of expertise. As you consider the technology infrastructure that supports your products, it s important to consider them in the context of Rootworks Who, What and How Service Builder Worksheets. These worksheets walk you through Who you want to serve, What you want to provide for them, and exactly How you want to deliver your offerings. As I mentioned before, it s the How that will shine a bright light on the technologies needed to execute on your business model. An integrated technology infrastructure is the ultimate goal As you start to look at the specific technology options available to you, it s important that you don t evaluate your products independently of one another. The technologies that support your products should 5 be tightly integrated across all your offerings. For example, do not look at a payroll technology without considering the integration between payroll and your client accounting system. Along the same line, when evaluating your payroll technology you must also consider questions such as: If your goal is to deliver a paperless payroll solution, where will the final employee check stub reside? Will the check stubs be accessible and integrated within your website? Will the check stubs for those employees, who are also clients, reside with that client s other documents, like their tax return? As you can see, there is much to consider in regard to the technologies associated with your products. As such, you should approach your technology selections from the perspective of building a solid foundation for your NGAF, as discussed earlier in this document, incorporating your core infrastructure, practice management, and web and mobile strategies. Below is an outline of the types of technologies to consider as you seek to identify the solutions needed to execute your business model that supports your overall vision of the future you want. Remember to consider the solutions you choose based on the integrated infrastructure strategy you have identified. About the Author M. Darren Root, CPA, CITP, CGMA, is the CEO of Rootworks, a professional organization comprising more than 500 member firms throughout North America. Rootworks helps accountants transform their practices into Next Generation Accounting Firms through entrepreneurial thinking and business modeling. Darren also has more than 30 years of practical experience at the helm of his own accounting firm, Root & Associates. A productive writer, he is former executive editor of CPA Practice Advisor; coauthor of The E-Myth Accountant, and Youtility for Accountants, author of The Intentional Accountant. Darren has consistently been recognized as a top thought leader in the accounting profession, having been named to the Top 25 Most Influential Thought Leaders and Top 100 Most Influential People lists by industry trade journals. darrenroot.com rootworks.com Copyright 2015, M. Darren Root. No part of this work may be reproduced, retransmitted or redistributed without written permission from the author. No express or implicit warranty is made regarding the information presented herein. No liability is assumed for damages resulting in use of information contained herein.