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Pricing Outsourced Accounting Services as a Value-Based Fixed Retainer Fee Model

Published September 7, 2012 

Jim BoomerNEW YORK (Sept. 7, 2012) –Many firms are taking advantage of the advancements in cloud technology to transform their client accounting service practices and offer higher value, outsourced CFO services to their clients.  However, one of the biggest struggles we see for firms is pricing.  Their natural instinct is to take the traditional model of rate times hour and try to apply it in this new environment. The problem is that model just doesn’t work here.  As you gain efficiencies with web technologies, you’ll actually spend less time on transactional processing.  More of your time will go towards true business advisory services and in an hourly billing model; you’ll likely find yourself losing money.

Value should be determined by the client, not by the hours invested in the project.  Firms need to step outside their comfort zone and force themselves to think more like entrepreneurs.  What would it cost the client to hire employees to perform these services internally?  What value will the client recognize from leveraging the firm’s technology platform and existing processes?  Thinking this way is not easy for CPA’s.  That is why many firms have hired someone with value creation skills to be responsible for pricing.  This person should also be placed in conversations with clients prior to delivery of services to carefully define scope and terms of the engagement.  Getting all this out in the open up front helps you maintain leverage.  In the old model, you give up all your leverage by naming your price after you’ve done all the work.

Change orders should also be an important part of pricing strategy.  When the engagement goes beyond what was outlined in the initial scope, change orders offer both protection and opportunities for additional work.  Finding these additional opportunities requires conversations with the client and discussing their dangers, opportunities and strengths.  This involves a different skillset than many accountants have depended on to do the transactional bookkeeping work in the past. Many firms are finding that they need a business analyst to fill this role. Transitioning client accounting services to the cloud is a huge opportunity for firms across the country with countless benefits.  The common mistake though is to jump right to the technology decision when the change management and business process issues are the challenges that need to be addressed up front.  Pricing is definitely one of these major issues and I hope you’ll join Jennifer Katrulya and me at the Digital CPA Conference (December 5-7, 2012) in Washington DC for our session on “Pricing Outsourced Accounting Services as a Value-Based Fixed Retainer Fee Model” to learn more.

Learn More about Digital CPA!

Posted by CPA2Biz on 09/ 7/2012 in Client Accounting, Cloud Financials, Data Security, On-Demand Financial Applications, Resources, SaaS, Video Blog, Workflow Solutions  |  Permalink  |  Comments (3)


Efficiency is the Name of the Game—How one organization made it happen!

As a trusted business advisor, you can take advantage of infrastructure efficiencies that allow you to focus on what you do best – advising your clients. Consider moving to cloud-based solution, and how an integrated bill management system, combined with a solid financial accounting system, may improve efficiencies within your firm. But, how do you do it? What are the benefits? And, how do your clients benefit? 

Recently the National Associate of Water Companies (NAWC) outlined how it accomplished noticeable efficiencies by moving to cloud-based solutions.  Along with the help from the staff at LarsonAllen, LLP, this water company improved collaboration and workflow efficiencies, while witnessing an increased benefit in the audit trail process, which aided in its annual audits.

You see, the NAWC was spending precious time twice per month dedicating time to meet with their LarsonAllen representative, reviewing, approving, and signing checks. The manual process, for this company of eight, fatigued dedicated and important resources. Once LarsonAllen moved to an integrated solution, the staff at NAWC could review, approve, and schedule online payments via check, ePayment/ACH, or PayPal with more flexibility and efficiency than ever before. And, best of all, the audit trail was built into the workflow solution.

Before the automated solution was put into place, NAWC staff would have to pull documentation and either email or fax it to LarsonAllen. With its cloud-based solution, users store documentation online, and the LarsonAllen staff can find answers on contracts and bills quickly. As a result, NAWC experienced a reduction in discovery hours and were able to provide faster, cleaner, and a more cost-effective audit trail.

Further, there was no more guessing about if or when bills were being paid. Mike Horner,

Director of Administration and Membership at NAWC, says, “Before [our automated solution was in place], I’d be walking the dog or taking a shower and I’d wonder if a certain bill had been paid. Because our [bill-pay solution] is cloud based, I can find the details immediately, on my home computer.”

So, rather than focusing their time on bill payment and management, the staff at NAWC is now more able to focus on their role at hand—educating the public on the safety of private tap water.

Learn more about how you can automate not only your firm’s bill paying processes, but also that of your clients; so they too can focus on what they do best—their business.

Read more case studies on how firms and their clients are implementing cloud-based solutions so they can focus on the business at hand.

Visit the Trusted Business Advisor Solution paperless bill management site today.

Posted by CPA2Biz on 10/10/2011 in Cloud Financials, Paperless Bill Management  |  Permalink  |  Comments (7)


Comments on 2011 AICPA Top Technology Initiatives Survey

Published April 06, 2011 

Click here for results from the survey.

Posted by CPA2Biz on 04/ 6/2011 in Client Accounting, Cloud Financials, Data Security, Resources, Video Blog, Workflow Solutions  |  Permalink  |  Comments (0)


Several Ways to Protect Your Firm and Your Clients from A/P Fraud using Cloud Computing

Some firms are using cloud computing to offer clients new consulting models. Is this the future of the CPA profession?

According to the 2010 Report to the Nations on Occupational Fraud & Abuse from the Association of Certified Fraud Examiners (ACFE), organizations around the world lose an estimated five percent of their annual revenues to fraud. To that end, it's not surprising there have been so many recently published internal fraud-related articles from well-know resources such as AccountingWeb, CPA Success, and CPA Insider.

Has internal fraud become more commonplace for your clients? Has it simply being talked about more openly through social media channels and with the mainstream media?

Listed are additional resources you may find helpful as you help your clients in preventing fraud.

In a recent interview, Jason Blumer, from Blumer and Associates, suggests small- to mid-size firms leverage the cloud, or web-based solutions, to help mitigate internal fraud with and for their clients. "Small businesses — those who don't have, or can't afford it — are disproportionately affected by fraud and lack the processes in place to prevent fraud," he said. "Preventing fraud on the front end is far less expensive than detection on the back end."

In a recent CPA2Biz webcast, featuring Jason Blumer and co-host Jeff Schultz from along with a video clip from Bob Harris, several tips were shared on ways in which a firm can leverage a cloud-based bill pay solution to help reduce fraud within its clients' workplace, including:

  • Establishing prevention procedures: Be aware. Identify key areas where your firm is most vulnerable and know who is accountable for each area. Determine the types of fraud that may occur and how they would likely be concealed. Then establish internal controls to keep these possibilities from becoming realities.
  • Going paperless. By preventing "lost" bills and invoices, you reduce the risk of manipulation and information theft, while maintaining an audit trail of access.
  • Enforcing separation of duties & payment control: Clearly define user access to the data, ensuring one single user does not authorize, process, and record financial transactions within the business. For example, an employee who enters bills into the accounting package should not have the ability to authorize payments for those bills. By segmenting role-based controls, you make sure that no one person has access to information and the ability to edit accounting data (vendor addresses, etc.).
  • Automating work processes: Enable different members of your staff to access client bill workflow, from data entry to verifying amounts to collaborating and providing transparency to the client. By automating payment deadline reminders and an audit trail, you ensure that nothing falls through the cracks.
  • Eliminating checks (incoming and outgoing): A single check contains every piece of information needed to access your money. By doing away with paper checks entirely, you protect client and firm account numbers, eliminate risk of lost, stolen or manipulated checks, and can access archived checks securely on instead of via email.
  • Performing more regular internal audits: Automated systems make regular audits much easier, creating an online audit trail with full remittance data, cleared check images and approval confirmations.

What are you doing to help your clients prevent fraud within their small- to mid-sized business?

Share your success stories here.

Posted by CPA2Biz on 02/14/2011 in Client Accounting, Cloud Financials, Data Security, Workflow Solutions  |  Permalink  |  Comments (13)


Press Release - AICPA Publishes Guidance on Next Generation of SAS 70

New Reporting Options Respond to Growth in Cloud Computing 

Published February 01, 2011 

NEW YORK (Feb. 1, 2011) – Cloud computing providers and healthcare claims processors are among the information system service organizations who will benefit from new CPA reporting options developed by the American Institute of Certified Public Accountants.

“The AICPA developed these new Service Organization Control reports in response to marketplace demand,” said Barry Melancon, AICPA president and CEO. “Service organizations have been vocal about their clients wanting assurance that they have effective controls for all their data – not just financial information. These reporting options will help them build that trust with their clients.”

“As accounting firms and their clients increasingly move to the cloud, greater confidence in data security, confidentiality and privacy is needed,” said Erik Asgeirsson, president and CEO of CPA2Biz, a leading cloud solutions provider and subsidiary of the AICPA. “This is a major evolution from SAS 70 that meets the need in the marketplace and will have a substantial impact on CPAs and their clients.”

The AICPA designed the new, illustrative Service Organization Control (SOC) reports to help companies that outsource tasks or functions to third party information system providers, such as Intacct or Data security risks require greater due diligence to avoid internal control breakdowns. Melancon provides an overview of how the guidance and reports were developed in an online video.

The new SOC reports, formerly called SAS 70 reports, provide a framework for CPAs to examine controls and to help senior management understand the related risks of outsourcing to a service provider.

Companies had misused SAS 70 to issue reports on controls related to outsourced non-financial data rather than the correct attest standard which was in place. The SOC reports clarify which standard needs to be used and how it should be implemented to meet specific user needs.

  • SOC 1 reports are primarily an auditor-to-auditor communication which addresses the controls at a service organization relevant to financial reporting. These reports are restricted use reports and therefore are not designed for promotional purposes.
  • SOC 2 reports are in response to the rapid growth in cloud computing  and data outsourcing, as well as the marketplace need for clarification on how reports on  non-financial controls regarding information, such as data security, confidentiality and privacy should be structured.
  • SOC 3 reports cover the same subject matter as SOC 2, but in a general use, short form format which may be freely distributed.

Service Organizations: New Reporting Options is now available for purchase for $29.00 for AICPA members; $36.25 for non-members.

Posted by CPA2Biz on 02/ 2/2011 in Client Accounting, Cloud Financials, Data Security, Resources, Video Blog  |  Permalink  |  Comments (1)

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