A workflow is the most basic building block of an organization, a sequence of connected steps in which unnecessary delays have been identified and removed.

The concept grew out of the study of manufacturing processes, but as new technologies emerged for business -- typewriters and copiers in particular -- the concept of workflow was extended to business and professional services as well. But while the management of workflow has been refined and extended in many other businesses, the accounting industry remained stuck in the 1980s. Workflow remained, in all but a few cases, a routing system that was performed manually.

Until five years ago.

"Five years ago, most accounting firms were still moving responsibilities around their offices using slips of paper," said Glen Keenan, president of XCM Solutions, a provider of digital workflow solutions. "But that began to change as new technologies emerged to make accounting work more efficient. With these technologies, it became possible to take a new perspective not only on the management of structured data like documents, but also unstructured data like e-mails and client conversations."

"For accountants," Keenan said, "workflow requires a combination of diverse technologies and tools with which to manage the flow of both unstructured and structured data."



Five specific technologies converged beginning in 2008 to drive this efficiency:

1. Document management. In 2008, Adobe Systems released its proprietary Portable Document Format as an open standard. This created a core technology for document management that resulted in an explosion of new products and concepts for the creation, storage and retrieval of documents.

2. Cloud computing. Software-as-a-Service, or SaaS, served as the initial impetus for a shift away from on-site software and document storage to secure storage "in the cloud" - a term for the Internet. This, in turn, made possible immediate, collaborative access to these documents and processes by multiple workers simultaneously from anywhere in the world.

3. Enhanced scanners. During this period, a new generation of enhanced scanners emerged as specialized tools capable of translating unstructured images and documents into PDF files, which in turn drove the use of more efficient and standardized client workbooks and folders.

4. Portals. Portals were created in order to provide a simple and straightforward interface for documents and unstructured data that are stored in the cloud. Some accounting firms prefer a unified portal, while others divide theirs into one portal for works in progress and archived copies, and another through which to share finished work and documents with clients.

5. Mobile computing. The ability to access data over the Internet created a need for new devices capable of anywhere/anytime access. These devices, which today include both smartphones and tablets, rely on wireless technologies and battery power to provide mobile access.

"When you look back over the past five years, it is clear that the pace of technology evolution has been staggering," said Mike Ritchie, director of product management for accounting, audit and workflow solutions at CCH. "Particularly in the areas of cloud and mobile computing."

"The lesson for accounting firms," Ritchie said, "Is that you have to invest in the hardware, the software and the training to keep pace with this evolution. This is a wave that accounting firms can't afford to miss. If it costs $100 to double the amount of RAM in a computer, but the additional memory improves efficiency by 30 percent, it is a good investment. Today's emerging hardware and software solutions for workflow pay for themselves very quickly."



Investing in the concepts and technology tools of workflow in order to enhance the accounting firm's efficiency, productivity and profitability might seem a natural move. But workflow as it is defined today brings its own set of issues, not the least of which is the need to change.

"Many firms are used to doing workflow the way they have always done it," explained Melissa Yard, product manager for engagement, trial balance and audit at Thomson Reuters. "And there is a reluctance to change. Not just in technology, but in all facets of the workflow. They do things the way they have always done them, though they have access to information and analytics that could enhance their client relationships."

In the small accounting firms (less than 10 employees) that make up an estimated 90 percent of the industry, according to small-business Web site Manta, the issue is even more complex. Small businesses must deal not only with the changes in technology and the investments they require, but also the demands of servicing clients with a small staff. The decision-makers are also the revenue-generators.

"Large firms have staff who can manage the implementation of a new workflow solution, including new policies and procedures," said Katrina Geety, a CPA and president of Accountants' Workflow Solutions Inc.

"Small firms are aware of the benefits, but are looking for someone to provide them with a comprehensive, 'turnkey' solution developed using best practices," said Geety. "While the cost of technology is a challenge, the lack of expertise in process management and the demands on a single managing partner are the main obstacles to adopting change. Workflow adjustments require an expertise in process management that many accountants do not have, as well as a large investment in time if the workflow solution must be customized for their firm."

"These firms are willing to rely on and adopt workflow and process recommendations from seasoned accountants and experienced workflow professionals," said Geety.

Finally, there is the issue of new employees entering the accounting profession.

"The new CPAs coming into the industry expect mobile support," said Cathy Wright, product line manager at CCH. "We are now seeing 'consumerization' appear within accounting firms; that is, an expectation that they will have the same level of technology in their accounting lives that they have in their personal lives. The challenge for the firm is how to leverage this ability to make use of technology."

None of these issues -- related to change, technology investment, management time and staffing -- is insurmountable. But together they may require a different way of viewing workflow -- and a different way of viewing the accounting firm.



The traditional structure of an accounting firm consists of silos and teams. That is, the firm is divided into departments that stand independently like silos -- tax, audit, business consulting, technology consulting, bookkeeping, payroll, etc. Since any given client will typically need more than one of these services, a "team" with members of the relevant departments is assigned to the client under the supervision of a partner.

While this structure has worked well for larger firms for more than three decades, it performs less well for small firms and those with multiple locations. And in fact one of the core tenets of workflow is that all workflows eventually become obsolete.

"Even the best workflow loses efficiency over time," said John Sapp, vice president of strategic development at Drake Software. "The traditional workflows for audit and tax in accounting offices have served the industry well, but are losing efficiency in the face of new technologies and the need to simplify processes for the clients. Our challenge is to take a more holistic view of the accounting firm today and design workflow strategies for today and the future."

"Many firms today see workflow as a single-point solution to a single problem, like tax flow," said XCM's Keenan. "The new shift is to move from a single-point solution to a broader solution. I use the term 'process management,' which is the use of technology and processes to deliver the product to the client as effectively and efficiently as possible."

"With the emergence of highly efficient firms that interconnect, many accounting functions will become commodities, in the same way that bookkeeping and payroll have become commodities," said Aaron Brady, a senior product manager at Intuit who focuses on innovations for accountants. "While client service is still the primary focus, accountants are paying more attention to optimizing the firm for profitability."

"Part of that optimization is connecting the workflows," Brady added. "When workflows are connected, efficiencies multiply because duplicate efforts are removed. Combining the workflows in an accounting firm can save 30 percent of the time it takes to respond to clients. And the clients are beginning to demand a higher level of interaction. Accountants must have immediate access to information and files, and the means to communicate with clients constantly. Firms that understand this are growing."

In this new view of the accounting firm, practice management has less to do with trial balance and engagement letters than the ability to simultaneously interconnect and manage the different workflows of the firm for greater efficiency.

This, in turn, reduces an administrative burden of data and document management, enabling the accountant to spend more time consulting with clients on a proactive basis, rather than in the more reactive mode of traditional accounting services.



If there is general agreement among solution providers about the changing nature of workflow and the role of technology, each has a differing view of what the priorities are for the next step forward.

"Our focus is on the ability to access all client information from a single location, a kind of workflow portal," said Intuit's Brady. "This single-point access to information is the foundation of the workflow strategy."

"We'll spend the coming years helping accounting and tax firms figure out how to use the new technologies, expanding the use of cloud and mobile computing," said Drake's Sapp. "That involves helping to define the accounting workflows, and interconnecting those workflows to enhance efficiency and client service."

"We are evolving the workflow into a single system in which the practitioner has to do less administrative and data-entry work," added Thomson Reuters' Yard. "Technology is helping to make work more standardized, and therefore the profits become more standardized. It is not just a case of managing data, but rather changing our thought processes to bring together the diverse parts of accounting in a single workflow."

"Scheduling is the next focal point for us," said Keenan of XCM. "Not just calendar scheduling, but also resource allocation scheduling to balance human and other resources. Determining rapidly who has capacity, so that you can assign work efficiently. Accountants first put the processes in place, then add other pieces to the system to drive additional benefits."

"I think we will be in a simpler place technologically, more cloud-based," said Thomson Reuters' Yard. "Less complicated, with processes that make client service simpler. Accountants will have the ability to make better sense of the data and give their clients better advice."

"The wave we are in will carry us for the next several years," said CCH's Ritchie. "Software companies will use those years to fine-tune their products, to refine the focus on a single point of access for all client information. They will use the time to adapt to the benefits of cloud and mobile computing. Within a few years, people will look back and say, 'Why did it take so long to get here?'"

And the first step for accounting firms?

"Firms just need to start," said Keenan. "There's no single starting point, and no single right answer. Don't wait for the industry to provide a single solution, because waiting simply means falling further behind the curve. Get started on it now."




Accountants' Workflow Solutions Version 2.6 Hosted

Accountants' Workflow Solutions Inc.

Severn, Md.

(410) 551-2380



CCH Axcess

CCH, a part of Wolters Kluwer

Riverwoods, Ill.

(800) 739-9998




Drake Software

Franklin, N.C.

(800) 830-9500



Intuit Practice Management

Intuit Inc.

Mountain View, Calif.

(866) 820-6382



Workpapers CS

Thomson Reuters

Dexter, Mich.

(800) 968-8900



XCM Version 10

XCM Solutions

Braintree, Mass.

(781) 356-5152


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