by L. Gary Boomer

Most accounting firms have trouble handling changes. Too often, partners look at change as a traumatic event that can be endured, until things get back to normal. Or that it's something that happens to others.

One of the problems with this thinking is that change is occurring more regularly and periods of stability are shorter.

In today's uncertainty with Enron, pressures from regulators and public scrutiny, many are concerned with how the profession will cope. I believe and am hopeful that the changes will be for the better.

I also believe that our biggest fear is that politicians and the press don't damage the image of the profession to the point that bright young people will no longer enter the profession. Accountants love to be in control and, today, there are many things occurring that are beyond the control of most partners in local and regional firms.

One of the advantages of working with a large number of leading firms is witnessing how the best get better! There are plenty of changes occurring in our profession that you could get involved in that would improve client services, as well as make your firm more efficient and profitable. The following list includes some of the more important areas that are facing firms.

Integrated financial reporting

Firms have dealt with this issue since the switch from DOS to Windows applications. Integrated financial reporting is how client data flows from  their systems into accounting work papers and on to the tax return and financial statements. In the majority of cases, the local firm is involved in the preparation of the financial statements, as well as any type of assurance and tax return preparation.

This is the core of most accounting firm's productivity and, yet, it is an area where there is significant redundancy, inefficiency and lack of standards
Some point the blame at the software vendors and many don't really have a good vision of how this could all be automated far more efficiently. Overseas firms are ahead of us in the United States. For example, in the United Kingdom, they call it accounts production and have developed integrated solutions.

I believe that the continued problem here stems from the fact that that most accountants and clerical personnel are comfortable with spreadsheet and word processor applications. Therefore, our profession has demanded (from the vendors) the capability to prepare financial statements from a spreadsheet and the footnotes from word processing.

While this is a step forward from the days of a pencil, paper and typewriter, it is not the ultimate or desired solution. Internationally, firms are using a database approach and, therefore, everything is linked and automated. When notes to the financial statements change, it is updated automatically. The database approach is even more relevant to those firms offering assurance services.

Monetary unit sampling and transaction testing are much easier in a data base environment. CaseWare International's IDEA software is one of the leading solutions in the U.S. market. Firms who have moved to applications that are Microsoft Excel and Word-based have found that most of their employees need significant training in these applications to reach proficiency.

They have also learned that these programs have significant hardware requirements. Go Audit from RIA and ePace from CCH are the leading programs that firms use to produce financial statements and footnotes with the Microsoft Office applications.

Client-centric software

The accounting profession has endured with application-based rather than client-centric software. Some leading firms are starting to implement client-based systems for billing, marketing, customer-relationship management, process improvement and even internal accounting. These systems are databases where the data is accessible from other applications, such as Microsoft Outlook. Information is accessible from a desktop or personal digital assistant.

Other firms are attempting to integrate their applications so they will talk to each other and data will flow bi-directionally. This can only happen with open architecture databases and well-designed applications.

This is an area where most firms should play from the hand that they currently hold. They can't afford, nor should they attempt, to start from scratch. Therefore, review of the existing situation is very important when developing a plan and strategy to move toward a client-centric system with less redundancy.

This is the only solution to the age-old problem of having to update multiple databases when simple client information, such as an address change occurs. Many firms were led to believe by major vendors that their own applications would share common data. To date, this has not happened to the degree that most had hoped.


Many in the accounting profession pride themselves on being rugged individuals, as well as generalists. This is even in light of the trend toward specialization for most accountants. In either case, teamwork is necessary today for continued success.

Teams generally require a game plan and coach to succeed consistently. With standards, policies and processes, ordinary people can produce extraordinary results. Without them, it requires extraordinary people to perform on a consistent basis.

The accounting and financial services industries are rapidly accepting what General Electric and many manufacturing companies have done over the past decade - defining processes, setting high standards and training people. Some of the more popular and basic areas that firms are assessing and developing standards for are:

  • Charge time policies and procedures;
  • Tax return processing including electronic filing of the majority of returns;
  • Financial reporting;
  • Remote access;
  • Internet usage;
  • Document management;
  • Hardware and software usage.

However, partners are typically difficult to change - especially when it comes to playing as a team. Typical compensation packages have not rewarded them for teamwork, developing processing and training but have rather only focused on production. While a production focus is good, it is not the only attribute that contributes quality.We frequently see examples where firms have set software standards, such as Excel, but one or more partners insist that they must have Lotus 1-2-3 on their machines or even the network due to the fact that they have an old spreadsheet that they must use on an existing client.
This sends the wrong message to the entire firm. With a few hours of training, partners will enhance their skills and probably be able to improve the spreadsheet and the services that they offer to clients.

Attitude has a great deal to do with how well people and firms deal with change. Firms with great leadership and training programs welcome change and operate with confidence in succeeding under any circumstances. Did I just define your firm?

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