What Has 25 Years Changed?

Veterans cite changing relationships as much as technology innovation

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Twenty-five years ago, a magazine called Computers in Accounting hit the market with information about technology products for the professional tax and accounting market.

Along the way, its name became Accounting Technology. But in that first edition, other than containing the name of a lot of products that are no longer on the market, many of the stories had headlines that could fit articles in any technology publication today.

OK, "16-Bit Vs. 8-Bit: What are the advantages of each" is not an article that would be written today any more than an audio magazine would review gramophones.

Partner Insights

But compare "Free Software: It's Yours for the Asking" with "Tech Tools For Peanuts" in this issue of Accounting Technology. The review of eight general ledger programs for small business isn't all that different from this issue's "Products with Staying Power", except that small business software is much more powerful, less expensive and there are a lot fewer of them on the market.

Well, an article in that first year explaining what email is shows that some things but changed. But certainly "How to Protect Data from Accidental Destruction", and "Some Tips for Selecting Software for an Accounting Practice" show that firms still face many of the same basic issues today.

And they are not going away anytime soon.

But there has been change, although some of the industry veterans asked there view of what has been the major impact of technology in tax and accounting firms in the last 25 years produced some very people-oriented topics.

The things that have most changed the face of CPA firms have been the use of "technology to talk to clients at a very low level. Previously, client discussion was with partners," says Robert Spencer of Louisville, Ky., of Twenty Seconds into the Future.

Known as "Dr. Bob," Spencer, started in 1984 at the CPA firm, Saltmarsh, Cleaveland & Gund, CPAs, based in Pensacola, Fla., where he was principal, management and technology consulting, selection and implementation of account of accounting software solutions, technology audits and reviews. He worked there until 1995.

And that trend is continuing with the growth of social networking, a topic that causes clients to ask Spencer for advice on dealing with the phenomenon.

"It's about developing internal controls over what you can see and cannot say," says Spencer, who said that the basic premise for public statements is "do your company no harm."

Ken Garen, CEO of Universal Business Computing, agrees with that assessment.

"Today, you now have the work being done by the clients instead of accountants. It's a major force multiplier in terms what accountants get done, be it QuickBooks, be it an online portal," says Garen. "If all you have to do is click the magic wand (the mouse), you become attorney status in billable hours."

During that time, computer technology has moved from the control of data and applications by IT personnel, usually termed the "glass house" to desktop control by users, who have grown very accustomed to having data and applications in their own hands. That user-controlled culture has been one of the barriers slowing the adoption of Internet-based software.

Garen, who has been in the computer business since 1981, sees Software as a Service, as "a mainframe gone to the Internet and has all the strengths and weaknesses of that topology."

However, resistance has melted rapidly, says Garen.

"People are becoming more comfortable with not having stuff on their computers. People use it to do all their travel needs and banking. It's not an issue that comes up anymore," he says. "I don't get asked that question when I am talking with prospects."

Changing Platforms

The world has moved from floppies, the CP/M operating, PCs with little memory and limited storage, to one of ubiquitous computing with more and more power being crammed into smaller and small formats.

There's no reason that will change, says Dana "Ric" Richardson, who is known in the tax and accounting profession for his annual predictions regarding the direction of technology.

Richardson worked for Ernst & Young for 25 years where he was national director of technology and now is president of Richardson Media & Technology, a multi-media and strategic technology consulting company.

What he foresees is a change in leadership in the vendor market as computing moves increasingly to the one utilizing the Web.

"No technology company has been able to span more than one era. IBM did it for mainframe and Microsoft did for PCs. Google is clearly ahead in the Internet era," he says.

For some time, Richardson has foreseen the Internet as a basic challenge to Microsoft's technology philosophy, especially with the Internet's ability to make operating systems superfluous.

"In September 2006, what I said that before too long we are not going to have software on our desk tops. It would be in a cloud somewhere," he says. The reason SaaS challenges Microsoft's basic approach is that users can access applications and data "if they have a decent browser" and don't have to worry about what operating system is involved on either end of the process.

Staying in Touch

For Robert Carmines, his involvement with technology happened long before he became a CPA-he got his first taste in the sixth grade in Hampton, Va.

At his first job at Price Waterhouse in Norfolk, he purchased an Atari 800 computer with 32K RAM, which cost $1,600, and did random number generation and ran sample selection in audits. A couple of years later, he was using his first desktop tax preparation software program.

But not surprisingly Carmines, and probably most of the CPAs of a certain age, it was the electronic spreadsheet that he sees as the most revolutionary tool, the electronic spreadsheet.

He started with VisiCalc progressed through MultiPlan, Lotus 1-2-3 and Quattro Pro before settling on the almost universally used Microsoft Excel.

"The other thing that I've embraced is Internet," says Carmines, whose firm Carmines Robbins has operated in Virginia Beach since 1994. He links that with document management and said he purchased Thomson's FileCabinet CS when it first came out in 1999.

It's not hard to point out how document management has helped the business.

"I have a tax preparer in Kodiak, Alaska that does 250 returns for me," says Carmines. "I can go back and look at a 1984 W-2 without having to figure out what box it is in or what warehouse or whether we even have it."

When the threat of heavy snow closed area schools for one day, most of his staff was able to work from home.

Carmines sees client portals as the next big trend "as soon as the accountants understand them," he says. The firm makes portals available to all clients, although there has been some push back on their use.

Remember that 1984 data security story? Carmines now worries about any kind of security issue. What if your business data is in the electronic vaults of a company that goes out of business?

He's not worried about another Hurricane Katrina as much as "I am worried about financial problems wiping them out--and not having access to the data."

Carmine is an enthusiastic user of social networking and was always the person arranging for get togethers with members of his college fraternity. For the last 30 years, they have been getting doing at a different beach house and different beach annually. This year, eight families will be together.

But where once Carmines' letter writing spurred the togetherness, now his frat pals are staying in touch via Facebook.

"I bet I have 10 emails today and six to seven snide comments on my Facebook page," he says.

Relationship Altering

It wasn't just communication that was altered by technology, says Jennifer Wilson, a partner with ConvergenceCoaching, which provides business coaching and marketing advice to accounting firms.

"It's ridiculous and very straight forward but PCs and accounting software dramatically altered the relationship between CPAs and clients," she says. "CPAs went from bookkeepers to business advisors and less data-entry helpers to being able to help clients at a different level."

Wilson says she got in on the ground floor of the change and the resistance to it in 1984 when she joined a firm that sold Open Systems Accounting Software.

"I was able to see the denial, the people who said that technology was a flash in the pan," she says.

In 1989, Wilson joined State of the Art, which, along with its MAS 90 line, was purchased by Sage. She later worked with BDO as partner and director in the financial solutions group before founding ConvergenceCoaching.

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