Business intelligence has emerged as a valuable and easy-to-use tool to improve efficiencies for accounting firms, as well as their clients.
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What's more, with the availability of lower-cost offerings, and a user base that is more educated about what business intelligence is and can do for them, there's been a rise in the use of BI tools and software at the firm level.
Below are three examples of how firms have been using BI to better their practices and gain new business.
Firm: Clark Nuber / Bellevue, Wash.
Size: 142 people
Product: SharePoint plus SQL Reporting Services (Microsoft)
Commencement date: 2007
On record: Chief information officer Peter Henley
Challenge/objective: The firm wanted to streamline operations, acquire new clients and better serve existing ones. Within those parameters, Henley knew that finding out more about what the firm does for every client at a moderate-sized firm was a challenge, and they needed to discover which industries were being served well and which were not.
Amount spent: SQL Reporting Services is free with SharePoint. The firm paid $5,000 for the SQL server and client access license. For small firms, there is a free SharePoint tool (SharePoint Foundation).
Process: The firm's practice management software has all of the firm's time-and-billing information in it. SharePoint and the Reporting Service were used as a search engine for all client documents in the system. SharePoint was also used as a document management tool, as well as the firm's intranet. Henley noted that there was minimal training needed for the system - just the time to roll it out to everyone who needed to use it and get them used to the system.
"The tough part wasn't figuring out how to use the system, it was standardizing the process," he said. "Once you digitize it and create the workflow, it makes a change because a good portion of the staff never did it that way or you see the problems in the old way."
In a short time, Henley and his team began to look closely at each process of streamlining the firm's operations, including simple tasks that they wanted to automate, such as the process of sending an audit engagement letter. "If SharePoint is the main extraction tool, SQL Reporting Service is the engine and the Web browser is the front end to it all. Those three tools helped us make up the BI we do," he said.
Results: The tools used helped the firm create two large workflows with hundreds of components, the biggest being the production of a tax return from beginning to end. The creation of an engagement letter was also made easier.
"In the old way, you had client numbers instead of names, everyone had to look those up, go into the time-and-billing system, look up the client, see the address of the letter, and construct it from there," said Henley. "Now you can just go into SharePoint, and it can access the practice management database, fill in the particulars and start the workflow. Then a document gets created and at the end you have a document that can be mailed to the client and they can sign it."
Henley also noted that, in terms of return on investment, firms looking to invest in business intelligence tools need to consider not the cost, but the objective. "As you expose more of the intelligence, employees will interact with clients differently," he said. "If you expose this data and act on it, how smart is it going to make your people? You can't write an ROI for that."
Next steps: Later this year the firm is planning to unveil an audit workflow that will be based in its SharePoint system.
Firm: WithumSmith+Brown / Princeton, N.J.
Size: 400 people
Product: ProfitCents (Sageworks Inc.)
Commencement date: 2005
On record: Partner Jim Bourke
Challenge/objective: The firm had clients in many different industries, and often conducted its own benchmarking during the comparatively slower summer season, but needed a better way of doing it beyond simply using Excel.
Amount spent: The firm received ProfitCents free as a test, but basic pricing ranges from $948 to $1,668.
Process: Bourke was introduced to ProfitCents at a technology conference and saw the detailed industry and market data that the product provided. He realized that the firm was spending too much time trying to produce what ProfitCents already provided. He decided that WS+B needed to have ProfitCents and selected an "internal champion" to help install it and train the staff. The decision was made to deploy it slowly through the firm, and Bourke used his own office in Red Bank, N.J., to conduct initial testing during that summer. By the end of the summer, the firm was able to show reports to some clients and "they loved the data," according to Bourke.
Shortly after, more offices began training and use. Within two years, everyone in the firm was able to use the product, and many started to use it for audit engagements in an effort to win new clients.
Results: "ProfitCents gives you the database to access tremendous industry-specific data. Initially it was as a replacement to our internal benchmarking, but now with all the data we can use it within the firm," explained Bourke. "Even for non-clients such as an industry we don't know as well, or have no clients in, we can go to ProfitCents, grab the industry data we need and put it in our audit engagements. We're become more intelligent about an industry, and this is something we could never do before."
Bourke also said that WS+B uses ProfitCents to review financial statements and when conducting reviews for clients. Today, the firm uses it for nearly every audit and review it has, particularly when it wants to look for unusual trends in data, detect irregularities, and advise clients on areas where they differ dramatically from their competition.
"Just last week we had a large engineering client, and compared their data over several years. We conducted a board presentation using ProfitCents information in a PowerPoint to help explain the company's financial information," said Bourke. "We didn't even have to open up the financial statements. Too many CPA firms don't use BI tools - they just go through balance statements, and the client isn't really getting the true value of what you can do for them."
Next steps: The firm is looking for better ways to get more data out of its T&B system to help better manage and measure growth and past performance. At present, the firm uses Excel and CaseWare's IDEA to pull this data out, and it wants a better way to help its new niche development teams "take their performance to the next level."
Firm: Armanino McKenna / San Ramon, Calif.
Size: 285 people
Product: CCH ProSystem fx Practice Intelligence (CCH)
Commencement date: 2010
On record: Chief operating officer Matt Armanino
Challenge/objective: The firm realized that it faced the same challenges as its clients, and wanted to know more about particular practice areas. But it had been spending too much time trying to aggregate information for monthly partner meetings. The firm decided it was time to build a BI dashboard that everyone in the firm could use.
Amount spent: Pricing is $10,500 for five users, and $25,463 for 25 users, which includes: one production server license and first-year maintenance, user licenses for a designated number of users, the Practice Intelligence dashboard, the Practice Intelligence deployment service, and training sessions.
Process: The firm designed and developed the product internally over six weeks. A dashboard was created that specifically focused on the key performance indicators of its business, utilization of employees, billing, work in process, accounts receivable, and how various practice areas were performing. The dashboard integrated with its time-and-billing system and general ledger. After seeing "how powerful it was," the dashboard was rolled out to other partners to answer questions about their particular practice areas.
Armanino later presented the application at a conference, where CCH North America president and chief executive Mike Sabbatis was in attendance. "Mike came to me wanting to know more about it. He said, 'You are already using our [practice management] system with this product and we need to talk how we can partner,'" recalled Armanino. "We then had a series of conversations to define a product strategy for CCH using the Armanino dashboard we created and how to apply it to their system and bring it to market as ProSystem fx Practice Intelligence."