Jennifer Katrulya
CPA.CITP, CGMA, President & CEO, BMRG, LLC.
NEW YORK (Sept. 24, 2012) –Your clients and prospects WANT you on their team, providing them with the ongoing Outsourced Controller, CFO, transaction processing and back-office support services they need to not only compete but win in today’s challenging business environment. As Client Accounting Service (CAS) providers, CPA firms have access to web-based accounting and integrated technology solutions that give you the unprecedented ability to provide clients with these services in a real-time, collaborative environment. So how do you approach this in a way that will “wow” your clients and create a winning formula for success for your firm? The following are just a few of the things you’ll want to address as you build your CAS practice:
Client Needs Assessment
A Client Needs Assessment can be the key to building highly profitable client engagements. This Assessment follows the initial prospect qualification process, and is ideally structured as a short-term, required project that is completed before a firm agrees to provide long term Client Accounting Services (CAS). Using a standardized series of questions and analytics, you’ll gather information about the current pain points the client has and their existing processes and procedures. This becomes your “before” section of your report. You’ll then create the “after” section of your report, showing the client how the integrated technology solutions, workflows and best practices you provide can help them increase efficiencies, save money, and gain access to their most critical business information in a streamlined “dashboard” environment, from anywhere. As importantly, you’ll have the granular information you need about the client to determine the appropriate long term scope and pricing model for the engagement, so that you avoid jumping in with limited knowledge and encountering potentially unwelcome surprises.
Engagement Letter
Providing ongoing accounting services to clients means that you and your team are working “in the trenches” with your clients every day. It also means that you will be providing your clients with financial reports and other documents they need to make informed business decisions, interact with 3rd parties such as banks, insurance companies, attorneys, etc., and measure their business performance. How can you ensure that you are compliant with the most recent SOC report requirements, that you and your client both have a clear and documented understanding of the scope and limitations of your relationship? A well-documented Engagement Letter is critical to accomplishing this and much more. When combined with a Service Level Agreement that gives your client a clear understanding of how the engagement will be staffed, scheduled and what you will need the client to provide on an ongoing basis to ensure successful collaboration and communication, you are laying the best foundation for a successful long-term relationship.
Staffing
A firm may have a well-documented Business Plan, a Marketing Plan that seems to guarantee success, and a well-known brand. Successfully “fulfilling the promise” requires the most important asset of all – top performing staff. In today’s market the most qualified and motivated hires expect to be compensated for performance; they want to have clear opportunities for development and advancement; flexible work arrangements are increasingly important; and they want to be both inspired and appreciated by their managers. Ensuring that your firm is an “employer of choice” for top talent will most often mean the difference between a thriving, profitable firm and one that struggles to succeed.
Don’t miss the opportunity to address these issues and many more at the Digital CPA: 2012 CPA2Biz Cloud User Conference, being held December 5-7 in Washington, DC at the Gaylord National Hotel!
NEW 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.
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 Salesforce.com. 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.
Solutions
NEW 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.