For several years now, the specter of change has hovered over the accounting profession, driven largely by shifts in how its clients work and, of course, in technology and processes. But what haunts the profession most these days is not just change itself, but change management.

This was one of the main themes on accountants’ minds and discussed by CPA profession leaders, including AICPA Chairman Barry Melancon, here at the association’s Practitioners Symposium and TECH+ Conference.

In his own words, “change management, not just change itself, has become a major concern among CPAs,” said Melancon. He also stressed that, for small firms in particular, the AICPA and CPA.com were doing their best to ensure they enable relevancy in the marketplace.

As for how firms can best adapt and specifically manage the changes impacting the profession the most, Melancon advised that “the evolution of CPA core services is a must in order to keep position of trust relevant in a changing world.”

It has been hammered on accountants time and time again that simply providing compliance services may not be enough to sustain their relevancy to clients. But what tools are they given outside of trying out new products that will, in theory, help expand their service offering and “evolve,” as Melancon noted? This is likely where so-called “soft skills” or “success skills,” as some are calling it here at the conference, comes into play.

Author, speaker, and CPA Bill Reeb of the Succession Institute regularly works with accountants on the aforementioned skills and took the time to address attendees in a keynote here at the event. He touted CPAs as “natural overachievers” who often can’t get out of their own way and, ultimately, “get stuck.”

“Common wisdom is to develop your strengths and surround yourself with people whose strengths are your weaknesses,” said Reeb. “You can’t go through an evaluation of things you do when you are frustrated. As soon as you think I should be further along or I’m failing, that’s when you get stuck.”

Reeb went on to note that accountants need to take the time to understand what they are trying to achieve, and more importantly, if they do decide to make changes in their firm, to be realistic regarding expectations.

“If you are not failing at the things you try, you aren’t getting better,” said Reeb. “There will never be a ‘right time’ to make the changes you need for your firm.”

Useful sound bites aside, the fact still stands that no one in the profession is coming to a conference to say the same. In the same right, accountants don’t necessarily want to be constantly told “to change.” They want to know how and, moreover, how to manage that change. This again was a major theme here at the conference and I suspect at more to come.

As ever, your thoughts on the issue are what matter most.

Greetings from App Watch headquarters, where over the past week we heard about a new financial document clearinghouse from CPA.com; new fraud detecting capabilities from Incisive; and some international language and integration functions from FieldAware.

To be fair, this column is not out to break any news nor regurgitate press releases from the vendor community. App Watch is, however, a weekly snapshot of product vendor and service provider news as it pertains or is of potential interest to accounting professionals and their clients. We also provide a bit of additional insight into what the news means, or could mean, to you and your clients.

Comfy? Ok, let’s go...

News: CPA.com Unveils Financial Information Exchange for Private Companies

CPA.com, a business subsidiary of the AICPA, has partnered with Confirmation.com to officially launch the RIVIO (Repository of Intelligent Validated Inputs and Outputs) Clearinghouse, which assists with CPA source-validated financial documents such as audited financial statements to bankers, shareholders and other investors. RIVIO makes documents available through a secure, cloud-based platform that offers comparatively stronger fraud prevention and more sophisticated controls than existing delivery methods. The product also acts similarly to EDGAR for public companies, creating a secure, central repository for private company financial information. The RIVIO Clearinghouse is designed to validate that a financial document has been uploaded by a licensed CPA firm; allow companies control over who can view the information, so financial data remains private; and protect private company information with encryption and an IT architecture tested by security audits. The clearinghouse does not replace or compete with firm or bank portals, since it was designed specifically for transferring information between three distinct user groups with features relevant to each. In time, the RIVIO Clearinghouse can be integrated into these portals.

Views: OK so on first sight, you may say “what is the importance of this?” Knowing this product fairly well, I can say there are multiple scenarios where it could be of use to a CPA firm and its clients, but the most basic is this: You have a small business client going for some level of financing, be it through a bank, venture capital or some form of private equity. The financier is going to require that business to provide financial documents and an audit statement – which a CPA firm will likely be asked to provide. The issues here are both process and privty. The current process of gathering and exchanging these documents is by all counts antiquated, not to mention open to fraud. It is slow, it restricts certain parties from being able to communicate directly with each other (i.e. if the financier needs a certain document they can’t directly contact the CPA firm and vise versa). Then there’s the issue of these documents potentially being altered, say verbiage being copied and pasted from the Web or even a CPA firm logo pasted onto a document which is then either faxed, emailed or mailed to the lender/financier. I could go on, but the bottom line here is there needs to be a better way to do all of this, CPA.com via RIVIO is offering it.

News: Incisive Adds New Capabilities to Detect Spreadsheet Fraud

Spreadsheet management technology provider Incisive Software Corp. has new capabilities designed to make it easier for organizations to identify fraudulent behavior. The company’s flagship Xcellerator product is now enabled with automated detection capabilities that locate hidden and misrepresented data within spreadsheets. This update also delivers additional performance improvements designed to reduce the amount of time it takes to scan spreadsheets for risk. Xcellerator can now discover hidden cells by height/width, so that it identifies rows and/or columns that are significantly reduced in size; monitors merged cell activity to ensure data is not accidentally or intentionally hidden; and support for Windows 10 and Microsoft Office 2016. 

Views: Look, for good or bad, most of you still work in spreadsheets and, as such, errors can and will occur. This could be through no fault of your own, or your client’s, or…but then again, it could be. Either way some of these errors and misinformation can of course lead down the path to fraud. Having a tool that can locate, verify and “unhide” data and identify areas of risk doesn’t seem like a bad thing to have in your corner.

News: FieldAware Adds International and Integration Functions

The latest release from cloud and mobile field service automation tool maker FieldAware includes integration to several accounting software packages including Sage, Xero, QuickBooks Online and desktop, as well as French language localization. With the integration of FieldAware’s mobile solution the aforementioned accounting platforms, when a work order is complete, and a job is closed-out on a field worker’s mobile device, an invoice can be automatically generated in the back office. The invoice includes all costs related to the work order, such as the cost of service and any parts/inventory consumed, and can be sent to the customer immediately. Integration of FieldAware with a customer’s accounting system also means that new companies, contacts and parts can be created in either system and automatically synced to both platforms. In addition, French is the first language to be released as part of FieldAware’s language localization and international expansion strategy. Available on both the FieldAware web-based app and mobile app, it allows French-speaking businesses to immediately take advantage of the mobile-first field service offering provided by FieldAware. Additional languages will be added with each new quarterly feature release.

Views: OK I was probably going to let this one go, but with the increase of the mobile work force it is highly likely that you have clients this product would be relevant for. Maybe the French language component isn’t quite as relevant, but the fact that it’s moving more international has to be a plus. The real reason for this getting an App Watch mention too is the integration with many of the top accounting platforms your clients are likely using. How well that integration actually works is, of course, one of those try it for yourself moments.

Until next week, we welcome your feedback and submissions openly.

Change management is an indispensable part of today’s business landscape, yet it remains a difficult concept to grasp, or is, at worst, simply overlooked. Furthering one’s firm is always part of the equation, but whose responsibility is it to manage the schedule for change and evolution? Is it strictly a managing partner’s job? A shared responsibility among firm leadership? Or should the responsibility be more widely diffused?

In 2016, there still isn’t a clear answer as to who exactly controls the pace of change in a firm. However, there are a number of factors that every firm can keep in mind to make sure that their rate of change is outrunning their clients’. When a firm recognizes what particular factors to pay attention to, they learn why change management is important for not only anticipating the future, but making themselves more marketable.

SQUARE ONE

Perhaps one of the biggest obstacles to change management is deciding how to first initiate a conversation. But getting the ball rolling can be easier than you think.

Carl Peterson, vice president of small firms at the American Institute of CPAs, argues that when talking change management in a place with limited resources, you should seek a connection with similar firms in order to move forward together: “I think the best thing they could do is participate in networking groups. The AICPA has networking groups, and change management is one of those things that comes up all the time, and when they find out what other people are doing and learn to implement it, that’s probably one of the best resources.”

Erik Asgeirsson, president and CEO of CPA.com, believes that the right state of mind is what drives change management inside a business. “I think, broadly, change management is all about having that progressive mindset,” he said. “What we’re seeing in successful firms — [no matter] what size or type — is it’s the progressive firms that are really making the most of these new opportunities that are possible due to this digital revolution that we’re in. They’re saying, ‘Let’s look at this through the different aspects of our organization: how we interact with clients, internal processing, how we’re delivering the service, the types of service that we’re providing.’”

Chris Alger, managing director in BDO Consulting’s Pittsburgh office, echoed this need for a progressive state of mind. “Strong, comprehensive change management programs are actually risk management programs focused on human performance and the human condition in the context of managed disruption,” he said. “Culturally, firms operating within a dramatically changing business environment need leaders that not only embrace change, but are capable of harnessing the value of the business opportunities created by these disruptive situations or forces. These firms will benefit from a formal center of excellence with core capabilities focused on providing the deep competence and methods that help institutionalize and cement the change culture.”

Alger says that such firms will be able to control change factors including, but not limited to, executive sponsorship methods and disciplines; stakeholder analysis and management (change preparedness); communications strategy, planning and execution; workforce development (training and education); and performance management, rewards and recognition.

WHO’S THE BOSS?

Since change management has not often been a conscious concern at firms, there’s rarely a single person identified as being in charge of implementing change. What may be more important than naming a specific spearhead of change, though, is to simply be open to evolution itself. If a leader, any leader, in a firm pushes a progressive mindset, it can set the tone for the firm and its future.

“Change management starts at the top, the idea of setting the groundwork for change,” said Peterson. “I think you have to have a managing partner make some of those hard decisions for the firm, but [there’s] really an opportunity to have inclusion of all staff levels. You can have input from all levels — it doesn’t just have to be the managing partner, it doesn’t have to be just the managers. If you think about the young professionals today, if they have input on what their future’s going to be, the environment or technology they’re going to use, it’s really going to build that team and that culture.”

Actively seeking out that champion of change in your firm may prove more fruitful than laying all expectations on the managing partner. When you find that open mind, our experts argue, it’s worth the investment.

“Your leaders can either act as defenders of the status quo or as enablers of the future way of doing business,” added Alger. “Positioning your firm as a proactive enabler of or catalyst for change can be a significant differentiator in the marketplace. But remember [that] the role of change agent or change manager is not in the DNA of most accountants. Thus, find out who are your natural change leaders and invest in their development and technical capability.”

“I think as you go to the larger firms, they’re having success with someone dedicated like an innovation officer in that role,” added Asgeirsson. “When you’re dealing with the small to midsized firms, you’re not going to have a dedicated resource, but I think you can identify a champion for innovation. I also think that it’s a good idea to have somebody who’s a younger member of the firm partnered with a more seasoned person who has the progressive mindset to doing things differently.”

THE ONLY CONSTANT

Change management doesn’t have to be as strenuous as many seem to think. A good leader with a progressive mindset — or one who seeks out that mindset internally — coupled with an awareness of how the business landscape is constantly shifting will lay the basic groundwork for successful firm evolution. Change starts not with an investment or practice, but a belief that it’s necessary.

“Humans are naturally averse to change,” said Alger. “Only a few fully embrace change in either their personal or professional lives. ... To an accountant, business change equals business risk, and risks are to be mitigated and managed. Seldom do you find strong agents of change in an accounting firm.”

“I don’t think we can follow that old path of every three to five years we’ll be making major changes,” said Peterson. “Change management should ultimately become part of your process as a firm. You do that every single year — you have a process in place where you can continually evolve and adapt and tweak. It’s an ongoing thing; you don’t want to be reacting to everything.”

Hello and welcome back to another edition of App Watch, the weekly column that gives you – the accounting professional – a quick snapshot of what was announced in the application and service provider world that we have deemed relevant to you. We also offer a bit on insight as to the importance of the news for you and, at times, the accountant-focused tech world at large.

This week’s Watch should come as little surprise. We’re neck deep into tax season and, as such, some familiar (and some not) tax product vendors have some news to share that could be pertinent to this season and beyond. So, without further adieu…

News: Small Firm Tax Research Tool Hits the Market

Metakite Software has released MetaTax, a tax research tool built for small firms and sole practitioners available on the Web and iOS. The company claims it has has over 100 tax topics covering the most common issues encountered while working with individual and small business clients. All content in MetaTax is fully searchable and cross-referenced. All information in MetaTax can be tied back to IRS forms, revenue procedures, notices, and other IRS guidance. Citations are available upon request. Sole practitioners can pay $9.99 per month for the product, while a small firm can pay $19.99 for up to 3 members.

Views: On first pass, who wouldn’t want a relatively inexpensive tax research tool. If you are a sole prac or very small firm, you’re probably just on Google or some other web search for what you need, maybe even the IRS site. Sure there’s the tax research tools offered by the major tax and practice management software makers, but it may not be viable if you’re an extremely small tax practice. If this tool does all it says it can, it seems worth examining.

News: Bloomberg BNA Updates State Tax Analyzer

The new version of Bloomberg BNA’s State Tax Analyzer is out and features NOL Manager, a new way to predict the impact state net operating losses (NOLs) will have on cash, the effective tax rate (ETR), and corporate earnings per share. The NOL Manager feature automatically computes the generation, utilization, carrybacks, and carryforwards of state net operating losses across multiple years and multiple scenarios. NOL Manager was also built to compute and document valuation allowances to withstand internal and external scrutiny; show impacts of IRS and state tax audits on NOLs; estimate taxes for financial statements and quarterly estimates; and calculate and track NOLs from the year 1998 forward for pre- and post-apportionment states

Views: So if any of your clients are dealing with net operating losses (they probably are), you know that while the federal code allows 20 years of NOL carry forwards and two years of NOL carrybacks, states vary greatly on their own NOL rules. As such, companies often have to navigate filing multiple entities in multiple states, forcing them to deal with hundreds or even thousands of returns in a single year. Not to mention, each filing requires its own NOL supporting schedule that could span upwards of 10 to 20 years. Sure, you’re in the middle of tax season now and you probably don’t have a lot of time to check out something new. But it seems this can help take away a pretty significant headache when it comes to state taxes.

News: Vertex SMB Inks Partnership With TaxCloud

Vertex SMB has formed a partnership with TaxCloud, a sales tax compliance service for online retailers. This partnership effectively expands TaxCloud’s geographic area of automated capabilities to include all U.S. and Canadian jurisdictions, while expanding e-commerce platform support for Vertex SMB – specifically to small online retailers. TaxCloud is certified to provide registration, filing, remittance, and audit response in the 24-member automated compliance states included in the Streamlined Sales and Use Tax Agreement.

Views: As with any growing business in this space, it’s good to build partnerships. And when you are a comparatively lesser known service provider, particularly when it comes to sales and use tax compliance, any such union is going to be a plus. Some of you may know that Vertex has a strategic partnership with CPA.com, the business/promotional subsidiary of the AICPA. That alliance alone looks to generate some awareness within the accounting community, now with this TaxCloud deal it adds further awareness and usefulness within the small business community.

That’s all for this week, as ever, if you have anything to add or some of your own commentary and insights feel free to do so below or post your own Any Answers or Blog post on our site.

Sales tax technology vendors have been expanding their efforts to help small and midsize businesses cope with the dizzying array of tax rates and rules across states, localities and countries.

“One of the things that we focus on is the SMB space,” said Marshal Kushniruk, executive vice president of business development at Avalara. “Even though we do some enterprise business, our major focus is the SMB space. We believe that the smaller businesses need to compete with the bigger guys and are really the ones that are driving the economy.”

Another sales tax technology vendor, Vertex, has set up a Vertex SMB unit to target small and midsize businesses with a streamlined version of its corporate offerings, according to Bradd Wildstein, director of channel sales. Thomson Reuters markets its ONESOURCE series of indirect tax products across the world to businesses of all sizes.

Demand for international capabilities has been growing among smaller businesses, particularly for ecommerce.

“We believe we have to develop a product or suite of products that allows us to take globalization for the little guy to the market,” said Kushniruk. “When these customers are selling across borders or across countries, they really have to worry about shipping it, with landed cost, duties, excise, and tax. They need to collect the right VAT or sales tax and most importantly pay the tax.”

Avalara and Vertex use connectors that are able to link their systems to outside accounting software, such as QuickBooks and Dynamics GP, or ecommerce technology such as Magento. ONESOURCE also integrates with outside systems like SAP.

“We have 500 different connectors that have been written, and they allow small businesses to essentially have an omnichannel type of presence,” said Kushniruk. “They may be doing invoices in QuickBooks and selling in a Magento shopping cart and a Shopify shopping cart. We’re consolidating all of the tax and helping them figure out the right tax that should be charged on the item, and paid in that particular jurisdiction, whether it’s the state of New York or Germany.”

Expanding internationally can be a challenge for any small business. “When clients go global they have to figure out first of all should they be registered in a country or not ship into that country,” said Kushniruk. “If they should be, what’s the correct VAT rate? On top of that, what is the product you are selling in that particular country or set of countries or states in the U.S. and how is that particular product taxed?”

Avalara is also offering specialized content for growing industries, like the sharing economy represented by companies like Airbnb and Uber. In recent years, it has also been forming alliances with state CPA societies, such as the Illinois CPA Society, the Kansas Society of CPAs, and the Maryland Association of CPAs. Vertex SMB has allied with the American Institute of CPAs’ CPA.com unit.

The calculations can be complex. “A baby carriage could be taxed at 24 percent in the U.K., and at a reduced rate in Germany, which is about half of their standard rate, and a zero rate in France, which is not a zero amount, but it’s essentially a tax holiday on it,” said Kushniruk. “In Louisiana, it could be 100 percent of the state rate, and then it could be in a tax holiday in New York State from August 1 to 14 because of back-to-school sales or something. All of that stuff goes into the determination, as well as landed cost. If I’m shipping a product from the U.K. into Ireland, is there an excise or a duty on top of that? For small businesses, the penalties are huge if they get it wrong.”