As the accounting profession continues to struggle with a changing workforce and an increasingly stringent regulatory environment, automating business processes in an effort to boost productivity and improve client service will only grow more critical.
For the firm of the future, this means a rise in cloud-based computing and enhanced mobility.
"I believe that in the future, work is what you do and not where you go," said Gary Boomer, chief executive officer of Manhattan, Kan.-based Boomer Consulting Inc. He was quoting from the book, Why Work Sucks and How to Fix It by Cali Ressler and Jody Thompson, which examines what happens when companies change their focus from hours to outcomes.
That notion seems to certainly hold true for the CPA firm of the future - and judging by the findings of a survey commissioned by financial and tax software and products provider CCH, a Wolters Kluwer business, the profession is already heading in this direction.
The poll, conducted by Opinion Research Corp., found that nearly 25 percent of what they defined as "high-performing" firms report having staff working remotely, and they are putting in place solutions to support a growing number of mobile workers.
For example, 72 percent report supporting wireless laptops; 60 percent support BlackBerries, iPhones or other PDAs and smartphones; and 25 percent support wireless minis/netbooks.
Furthermore, high-performing firms are significantly more likely to leverage technologies that support paperless processes and mobile workers, including Software-as-a-Service solutions. SaaS is a form of cloud computing where scalable resources are provided as a service over the Internet. Roughly 30 percent of high-performing firms reported using one or more SaaS applications, and that is expected to grow to 55 percent within three years, according to the CCH poll.
While industry sources have a few differing thoughts on what technologies will drive the firm of the future, most agree that cloud computing tops the list. Simply put, cloud computing means that a company can access everything they need to run the business through Web browsers such as Windows Explorer, Firefox or Safari.
"Right now, those firms on the cutting edge of technology, they are there. The masses aren't embracing it yet, but they will," said Jim Bourke, partner and director of internal technology at New Jersey-based WithumSmith+Brown, referring to cloud computing. "The days of sending out CDs will be gone."
John Higgins, strategic advisor with CPA Crossings, added, "The value proposition [of cloud computing] is so strong that it will continue to dominate," and he predicted that over the next five to 10 years, the majority of applications will be SaaS.
Boomer believes that firms' total information technology spending over the next three years will go down and firms will gain greater access to data and resources as they move to the cloud - which can be a fraction of the cost of an on-premise solution and frees up internal resources.
VIRTUAL FIRM
Another cost reducer that is seen by at least one industry member as a natural bridge to the cloud is virtualization.
Virtualization is aimed at improving the efficiency and availability of IT resources and permits a single physical server to run multiple server instances in isolation from each other as virtual machines.
"This is a real momentous shift, and virtualization is the steppingstone to get to a cloud-based or SaaS future," said Randy Johnston, executive vice president of Network Management Group Inc.
Whether it is an iPhone, BlackBerry or the new iPad, mobile devices are expected to become even more commonplace in the firm of the future, enabling professionals to multitask better and work remotely.
Boomer said that he recently got an iPad and he believes it's a "game-changer." It not only enables him to access all necessary documents remotely, but without a laptop, his briefcase weighs a fraction of what it did.
Automating the business processes within the firm of the future also involves implementing workflow management tools, which are gaining traction. However, Higgins predicts that five years from now workflow management tools will look even different than they do today. He believes that future workflow solutions will be even easier to use and more intuitive and flexible for the user.
Implementing a document management system to track and store electronic documents will also be critical for firms.
TOUGHER REGS
Meanwhile, the stringent regulatory environment around client privacy and security means that firms will need to deploy encryption technologies to protect data and implement technology to enable the sharing of client data.
For example, a sweeping new Massachusetts data security law (201 CMR 17.00), which went into effect March 1 of this year, is an example of the increasingly aggressive role that government is taking to protect client data. The privacy regulations, which carry harsh penalties, require that any person maintaining personal information of a Massachusetts resident, whether in paper or electronic form, develop and implement a written information security program (WISP). It also mandates the encryption of client data in motion and stationary, including on laptops and other portable devices.
The most logical solution for sharing sensitive client data, say industry sources, is a client portal.
"It will be a way for clients to get data, but it should be bi-directional so clients can upload data," said Bourke. "You will see more firms deploy technology to protect that bi-directional path."
What may be more interesting is that several industry members see the client portal as having the potential to significantly transform the CPA/client relationship and become a gateway to a client's entire breadth of information.
"I believe portals will take on new meaning and life," predicted Boomer. Currently, portals are mainly used to store static documents, but Boomer envisions that portals will eventually evolve to aggregate into one place all of a client's information like brokerage accounts, W-2s, bank accounts, and credit card statements.
Higgins agreed: "The potential is to get it as a gateway to all of the client's information. The killer app is a true shared accounting system ... that sets up a model where the CPA can be like a virtual CFO or controller."
More firms, especially smaller firms, will likely make greater use of social media platforms like blogs, Twitter and Facebook as they realize the potential marketing benefits, suggested Tom Hood, chief executive officer of the Maryland Association of CPAs.
"The next few years we will see more firms using that and pulling ahead because they are out there first," he said. "This new generation into the workforce will show us new ways to collaborate better."
