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.
Are you looking for new revenue-generating services without the need for a large IT investment?
Want to offer your clients additional value and grow your firm’s client accounting services practice?
If you answered “yes” to either question above, then web- or cloud-based accounting and financial solutions should be at the top of your list. Why?
For starters,cloud financials can enable higher-margin areas of service for your firm and increase client loyalty by boosting productivity, visibility and collaboration with clients. Which is why we are especially excited about ground-breaking new enhancements recently announced by our strategic business solutions partner, Intacct, a leading innovator in cloud-based financial solutions for CPAs.
Intacct’s new capabilities bring world-class financial management and reporting capabilities to CPA firms that will expand your services into new markets and target a broader range of small to medium-size business clients that would otherwise find these capabilities cost prohibitive or unattainable.
Intacct’s enhanced capabilities include:
Expanded Multi-Dimensional General Ledger and Detailed GAAP Reporting
Intacct’s new enhanced multi-dimensional general ledger allows CPA firms, like yours, to do more robust and granular financial and operational reporting, analysis, and real-time planning for clients. So now you can deliver better reports tailored to the unique needs of individual clients in all industries and markets. With more visibility into your clients’ financials, and an enhanced ability to interpret client data, your firm can provide higher-margin business and financial advisory services to your clients, thus increasing revenue and profits.
Enter or expand into specialized lucrative vertical markets such as not-for-profit, franchise, and property management. You can rename and repurpose dimensions to meet your client’s specific industry or business needs. This enables better planning, reporting, and analysis with the ability to drill down and pivot with deeper detail than ever before. Combine your vertical expertise with a financial management platform that lets you differentiate and highlight your firm’s strengths.
Here’s what Abraham Mathew, a senior consultant at LarsonAllen (an Intacct CPA partner) had to say about Intacct’s new enhanced multi-dimensional reporting capabilities:
"LarsonAllen services clients in a wide range of vertical industries and Intacct's enhanced multidimensional general ledger enables us to better service our clients by providing reports and deep operational analysis that were extremely hard to provide in the past. The added general ledger dimensions are critical for our clients in industries like not-for-profit or healthcare that have very complex and specialized reporting needs. In the past, we would have had to export the data into Excel spreadsheets and rework the information to create these types of advanced reports, which introduces extra layers of complexity and work. Now we can complete the operational reporting and analysis from directly within Intacct."
Web-Based Financial Processes & Employee Participation
Make it easier for any employee, anywhere, at anytime to actively participate in financial workflows. Enable clients to get away from manual process, poor controls, and the lack of data accessibility and visibility. Intacct’s cloud delivery model with enhanced workflows makes it easy for your clients’ employees to actively and collaboratively participate in financial processes, like purchasing and T&E expense reimbursements, while still ensuring proper financial controls and compliance.
With enhancements like the above, Intacct will enable you to better service your clients’ needs, increasing retention and satisfaction, boosting referrals, and expanding into new higher-margin markets. The best part? You can leverage this enhanced new functionality at a fraction of the cost and risk of traditional on-premises systems.
To learn more about the Intacct Accountants Program from CPA2Biz, click here.
If you are already benefiting from Intacct’s enhanced new capabilities, please share your experience with these new features here. Have you been able to expand into new higher-margin services? What are your thoughts and opinions on these new enhancements, especially the multi-dimensional general ledger? Please share your thoughts and opinions here.
One tip: Invest in a quality scanner!
With new cloud-based services, like Bill.com's paperless bill management solution and Copanion's paperless tax workflow system, accounting firms are finally moving closer and closer to a true paperless office. Cloud solutions like Bill.com and Copanion's GruntWorx let you quickly scan and upload client documents as soon as they land on your desk, where you can then process, manage and act on these documents in a timely manner.
One word of advice, especially for this tax season, invest in a quality scanner. In a recent AICPA CPA Insider article entitled, "Don't Skimp on Scanners" author Alexandra DeFelice provides some excellent advice and tips on choosing the right scanner for your firm's needs.
Are you using a scanner to upload, organize, store, process and manage client documents, from invoices to W-2s and 1099s and brokerage statements? Are you happy with the scanner you currently have? Finally, do you scan before processing or after the fact for simple archival purposes? What advice or recommendations would you have for CPAs shopping for a scanner? Please share your experiences here.
When you look at the advantages of cloud-based accounting solutions over traditional on-premise software, you might not consider Mother Nature as a key factor in the decision-making process. However, the recent experience of Harrod CPA, an accounting firm that was able to continue operations despite devastating hurricanes in Florida serves as confirmation of the unique benefits of adopting cloud-based solutions in your firm.
Not long ago, "…when there were three major hurricanes that devastated the central Florida area, Harrod's staff had to evacuate the state for several days. Fortunately, since Intacct's cloud accounting applications are accessible over the Internet, the firm could continue to operate and serve its clients without major disruption."
"We definitely had a competitive advantage due to the Intacct system," noted Harrod. "We reassured our clients, some of whom are scattered throughout the state of Florida, that their data was safe and secure at the IBM data center in California used by Intacct. Even though they were without power for days and their businesses sustained damage, we could continue to provide our service and the clients' financial systems never went down. Other clients not on Intacct were not so fortunate. Since then, many of these clients have migrated to Intacct due to these concerns and the need to mitigate future risk associated with hurricanes in the state."
You can read the recent press release and access the case study posted by Intacct on how the Move to Cloud Accounting With Intacct Helped Harrod CPA Improve Service and Increase Client Success.
If you have recently begun using cloud-based solutions, like Intacct or Bill.com, or are considering the move to the cloud, please share your experiences here, including the challenges of using traditional on-premise accounting software and the unique benefits your firm experienced with cloud-based solutions.