Whether you're a certified techie, or your IT knowledge extends little beyond the PC on-off switch, implementing new technology remains one of the more vital decisions facing CPA firms.But depending on whom you ask, CPAs are either dragging their heels in adopting beneficial business technology, or they are embracing the newest tools for their trade.

J. Carlton Collins, CPA and president of Atlanta-based accounting software consulting company Accounting Software Adviser, for example, considers the average CPA a "laggard" when it comes to adopting technology.

"I think there is a lot of new technology they are not adopting. They're falling short," said Collins. "Because CPAs charge for time, they put value in activities that generate money, and don't put money or stock in things like technology that will help them be more productive."

Gary Boomer, chief executive officer of Kansas-based technology consulting firm Boomer Consulting Inc., doesn't agree with Collins, yet he has data showing that technology spending (including money spent on training, maintenance and telephone systems) at CPA firms of all sizes dropped from an average of 6.06 percent in 2002, to 5.15 percent in 2004.

However, Boomer, projected that this industry average will increase in 2005 as document management systems become customary and Microsoft licensing fees continuing to rise.

The "sweet spot" for percentage of revenue spent on technology, according to Jim Bourke, director of MIS at New Jersey-based CPA firm WithumSmith+Brown, ranges from 5 percent to 7 percent for a CPA firm.

While IT spending may have waned, some experts opine that CPAs are becoming more comfortable with technology.

For firms planning on investing in technology this year, consultants and tech-savvy firm executives offered five criteria to ensure successful implementation and deployment of new technology and software.

1. Identify the problem. Sitting down and identifying the problem will lead to a more cohesive and well-thought-out decision on which type of technology or software will fix that issue, said Plante Moran chief information officer Doug Brady, and Michael Dickson, CPA, CITP and manager of the technology consulting and solutions group at the same firm.

2. Research. Once the issue is established, doing extensive "homework" on the available technology is necessary, including the cost effectiveness. Gene Marks, president of the Marks Group PC, a Pennsylvania-based technology consulting firm, suggested that CPAs ask themselves if the new features and functions are worth the price to replace the old system.

"Are you better off by upgrading or bringing in an experienced specialist?" he asked. "What adds more to your bottom line, not the vendor's bottom line?"

3. Training. If the firm decides to implement new software or technology, training on the new technology must be extensive and all-inclusive. When a new technology is implemented, i.e. a new e-mail system, the effects can be felt in other processes and applications as well, i.e. a customer relationship management system. Training in all of the programs that the new technology effects must be provided so the system succeeds in curing the problem the firm originally determined needed fixing, said Collins.

"If you had a jet parked in your driveway and you tried to use it without the proper training, you'd crash and burn - it's the same thing with new technology," said Collins. "You have all these buttons and icons that could make you far more productive, but if you don't get trained, more than likely, you are not getting anything at all."

4. Implementation. After everyone in the firm is trained, everyone must back the decision to implement the new technology and continue to use it.

"It's the biggest reason for failure," said WS+B's Bourke. "The community implements the new technology and doesn't get the buy-in or support from top management. You can't have guys bucking the ship. All have to agree it's good and use it, or it will fail."

"Some people expect technology to be the panacea, but the problem may be bad workflow processes or insufficient training, it may not be the technology," warned CPA John Higgins, chairman of the Michigan Association of CPAs and strategic advisor at CPA Crossings, a Rochester, Mich.-based IT firm for accountants.

5. Analysis. Once a suitable amount of time has passed, the CPA firm should analyze whether the new technology indeed saved time and money, or increased productivity.

"Establish clear, quantifiable goals and objectives, and develop a detailed implementation plan," advised Mark T. Warren, a partner in the finance and enterprise solutions group at Smart and Associates LLP, a business advisory and accounting firm in Devon, Pa. "Establish metrics to measure your success and continually monitor these metrics to ensure you meet your objectives."

One of the first software systems from which accountants received a large return on investment was time and billing. Today, these systems are fairly commonplace, even at small and midsized firms, Bourke said. The next big software change is installing document management and content management systems. "Document management systems are really hot right now. Firms that didn't previously make the jump on it in the early stages are jumping on it now," he said. "I get lots of calls from other firms that want to know how it's been working at our firm."

However, in order to make a leap from reviewing forms on paper to computer screens, accountants first have to ensure that the right hardware and servers are in place to handle the new systems, warned Boomer. For a number of firms, updating their servers, hardware and back-up systems to accommodate a new DMS system costs far more than buying into a hosted model for their new software.

"We're seeing a higher level of CPAs in [application service provider] and hosted models. They are starting to realize the benefits of working with an organization that hosts these applications to provide the right data record control for these solutions," said CPA Crossings' Higgins. "The adoption rate is much higher this year."

Staying in touch

One reason for the high adoption rate, beyond the cost savings, said Higgins, is the remote-access feature, which accountants are beginning to appreciate when away from their offices.

Many firms have realized the importance of connecting to their databases or automated client folders through a wireless connection on either their PDAs or laptops through wireless cards. But regular wireless card connections can only be established at a location where a wireless router is present, like a client's office or a CPA's home, or at a WiFi hot spot like a Starbucks unit or certain airport terminals (which can cost extra).

Most IT experts agreed that the next step in technology investment and remote access for CPAs is wide-area wireless services like Verizon Wireless' BroadbandAccess or Intel's WiMax. Both services offer small PC cards that CPAs can plug directly into their laptops and automatically connect to the Internet. Users pay a monthly fee, and can connect wherever they can obtain a signal, the same way a cell phone does.

"Right now, we're quite mobile by anyone's standards, but we're required to connect to a ground-based [router] using WiFi," said Brady. "The next step, available at a fairly decent price point, is WiFi wide-area networking. These connections are fast enough to support [virtual private network] connections to the office's databases ... and will replace the slower-speed WiFi connections over the next few years."

"There is no question CPAs are becoming more advanced," said Matt Camden, chief information officer for UHY Advisors, a tax and business advisory consulting group. "The change from 10 years ago in knowledge and comfort level with technology and how it's viewed as a client-service tool is huge."

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