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The 2019 Top New Products
There is no aspect of the accounting profession left untouched by technology, and no corner left unimproved; if there is any lesson to be drawn from the very wide range of tools our editors singled out as the Top New Products from the past 12 months, that is surely it.
From tools that create better methodologies for auditors to platforms that leverage the power of vast pools of data to help accountants offer insights to clients, and from solutions for soothing a client’s fears about an IRS notice to security tools you can carry in your wallet, this year’s picks reach into every part of the profession to make it more efficient, more valuable to clients, and more profitable for its members.
With that in mind, enjoy this year’s roster of the Top New Products!
AICPA names winners in startup accelerator competition
Three winners have been named by a startup accelerator sponsored by the Association of International Certified Professional Accountants and CPA.com.
Winner Gappify is a San Francisco company that uses bot technology – “dubbed Alan” – to automate time-consuming, repetitive tasks for corporate accounting teams in areas such as accounts receivable, accounts payable and general ledger.
Client Hub is based in Gainesville, Fla., and provides a communications platform for accountants and clients through an all-in-one workspace and mobile app, aimed at eliminating the need for email conversations and easing the delivery of critical data.
Finally Dryrun, based in Canada, make a cash flow solution, cash flow being one of the most critical pieces of information for small businesses.
“The value proposition for these companies is they get access to insights from senior leaders of the Association and CPA.com, as well as a panel of distinguished advisors with deep ties to the accounting profession,” said Lawson Carmichael, chief operating officer of the Association. “And for us, the program keeps us connected to front-line innovation.”
Each winner will be given the opportunity to present information about their company in June at AICPA ENGAGE, the American Institute of CPAs’ annual educational and networking conference (the Association of International Certified Professional Accountants is a joint venture between the AICPA and the Chartered Institute of Management Accountants, a professional member organization for U.K.-based accountants). They will also get a nominal funding investment and guidance from a panel of experts in the profession on marketplace needs.
The startup accelerator was set up two years ago to promote innovation in the accounting profession and give the Association and CPA.com more visibility into disruptive trends from emerging technologies.
“Early-stage technology companies are driving great innovation and new capabilities for the CPA profession,” said Erik Asgeirsson, president and CEO of CPA.com, the technology subsidiary of the AICPA. “We got great feedback from our first class of companies last year, and we expect to build on our progress with this current group of innovative startups.”
The future of audit lies at a point where assurance and advisory services converge, according to CPA.com president and CEO Erik Asgeirsson -- with technology driving the two together.
“It’s all about assurance and advisory,” Asgeirsson told attendees at the Digital CPA Conference in Washington, D.C., last week. “It’s about delivering trust plus insights.”
In his keynote, Asgeirsson described a new audit model that leverages the cloud to use automation, artificial intelligence and even blockchain to improve the audit and deliver more value to clients and markets.
“An AI-driven audit is going to provide greater assurance around the integrity of data,” he continued. “It’s going to provide great value to the capital markets.”
The cloud, and the ability to share information instantly and accurately that it provides, is fundamental to much of this change. “You couldn’t have cloud auditing until you had cloud accounting,” he noted, and reminded attendees, ”We’re only in the third inning in the cloud accounting transformation.”
More power for accountants
In many ways, the technology has only just begun to enable the kind of convergence Asgeirsson described.
“We’ve just reached the point where the technology is allowing us to fully realize the CAS vision,” said Aaron Harris, senior vice president and head of engineering and technology at Sage Intacct, who joined Asgeirrson on stage at the conference. “CFOs and accountants have been held back by periodic repetitive tasks. All of that is not giving them enough time to work on what we got into the profession for in the first place – helping organizations to thrive.”
What’s more, there’s now an unprecedented amount of raw horsepower being applied to handling basic tasks and freeing up accountants and finance professionals. “The idea of unlimited computing power is driving a lot of what we’re doing in technology,” he continued. “Of the 10,000 CPUs we have running, only about 30 percent are devoted to humans – the rest are dedicated to automation.”
All of that has allowed technology to develop systems that do more than just handle the basics. “The last generation of finance products was about making sure you had enough information to work on,” Harris said. “Now we want systems to optimize performance – to find the answers you need. The future is about what you do in situations where you don’t know what questions to ask. That will give us the opportunity to look to the future, to identify risks and opportunities, and to help leadership prepare for those.”
These kinds of technology-enabled solutions will offer firms the ability to move many of their services up the value chain.
“Audit can become a strategic value-add for organizations, whereas today it’s mostly viewed as something I have to do for compliance,” Harris concluded. “The $40 billion the Big Four make on audits will become $100 billion in added-value audits.”
The AI-driven audit
Focusing on audits, Asgeirsson described a new model where data flows automatically through the cloud into an advanced platform for an AI- and data-driven audit.
To create that platform, the American Institute of CPAs has raised money from the top tier of accounting firms and partnered with audit software developer CaseWare to build a Dynamic Audit Solution.
The DAS will take advantage of enhanced data flows, the use of artificial intelligence to make predictions, and improved methods for continuous auditing to make audits more efficient, and more valuable to clients.
“We don’t want to automate the audit to the point where people aren’t involved,” said Karen deSouza, head of product at CaseWare, who joined Asgeirsson during his keynote. “We want AI to point out risks and help.”
With the vast amounts of data currently available, AI systems can learn to identify data and how it’s usually classified.
“We’re looking at using AI to tag client information as it flows into the audit system – that will save a lot of time and improve quality,” said deSouza, “but risk is where AI can really deliver value – learning from all transactions where the risk lies.”
By tagging data appropriately, recognizing patterns in data and comparing them to millions of previous situations, smart audit systems should be able autopopulate engagement documentation and identify areas of risk for human auditors to concentrate on.
“The AI-driven audit should improve audit efficiency and improve the quality and the value we bring back to the client,” said deSouza.
For accountants who embrace these technologies and focus on bringing them to their niches, there are tremendous opportunities, Asgeirsson told conference attendees.
“It’s never been more important to specialize and to deliver insights, value and trust,” he said.
From audits to firm structure, accountants need to start disrupting most aspects of their profession, or they risk being left behind, according to American Institute of CPAs president and CEO Barry Melancon.
In a keynote address on the state of the accounting profession at last week’s Digital CPA conference in Washington, D.C., Melancon told attendees, “Just because we are where we are and we’ve earned a great position, we can’t stop. You can’t hit the pause button.”
“Being in a great position doesn’t mean we get to be here forever,” he continued. “Even with audit, even though it’s written into all state laws that only CPAs can perform them – that doesn’t have to be forever.
Melancon cited the example of Sears – a company that was both highly innovative (it pioneered mail-order, for instance, and more recently helped create an early Internet service, Prodidy) and a cornerstone of the economy – that failed to keep up the pace.
“They were on the leading edge, but for some reason, in the span of a moment, they missed, they stopped – and they paid the ultimate business price,” he said.
To underscore his point, Melancon noted that since 2000, 41 percent of consumer-centric companies in the S&P 500 have been acquired or gone out of business – while over the same period, 39 percent of members of the AICPA’s Major Firms Group were either merged or acquired out of existence.
Given the pace of change in technology and the broader economy, he explained, it is incumbent on the profession to take up the hard work of disrupting itself based on the profession’s premiere asset: trust.
“We have an incredibly important role in providing trust – we as a society don’t trust anything. We don’t trust our government to a large degree, we don’t trust our media, we don’t trust big companies, we don’t trust religious leaders, we don’t trust the Internet,” he explained. “Accountants have the highest trust factor – right now, today, in today’s fast-paced world, we have earned and enjoy trust we can build on to help the world and to help our clients sort things out. That’s our opportunity – but that means we have to take some risks.”
Risks and opportunities
The profession has already begun exploring new areas, particularly in audit, Melancon noted, and those explorations are themselves pointing to further opportunities.
“Today, tens of thousands of SOC reports are being issued, and we’re looking at building out from that experience to create new services – on smart contracts, for instance, or blockchain,” he said. “So when someone says, ‘My blockchain service does x,’ people will want attestation that it really does.”
To go further, though, will require the profession to create and embrace change.
Barry Melancon addressing the 2018 Digital CPA conference
“When we look at our core services, like auditing – do we have the guts to disrupt those? I think we do,” he said, citing the OnPoint PCR tool created by the AICPA and CPA.com, which puts artificial intelligence and cutting-edge technology at the disposal of smaller firms.
The AICPA has also raised $45 million from the top 80 firms below the Big Four to create a Dynamic Audit Solution aimed at applying the technologies of the future to this core service of the profession. “We went to the next 80 firms and said, ‘Do you want to do something in a new way? And look at it in a big new way?’” Melancon explained.
Audit and beyond
While building its own tech will help the profession manage its own disruption, that isn’t all it will have to do, Melancon warned.
“Reimagining the audit is going to require us to rethink our competencies. We’re going to have to have a thick skin and commit to this change,” he said. “You don’t get permission to evolve what an audit is if you’re not delivering right now – so we’ve had a focus on improving audit quality for the next five years. We have to have that quality to experiment going forward.”
That quality, tied to the profession’s trusted advisor status, should open plenty of doors in the future. “We believe regulators and the consuming public will come to require third-party attestation on whether companies are doing the right thing in cybersecurity,” Melancon offered as an example. “Don’t we as a profession have an obligation to think about how we attest to a broad range of things – what about sustainability, integrated reporting and so on?”
10 years down the road
Looking beyond the near-term, Melancon extrapolated on current trends, like the fact that among the Top 100 Firms (excluding the Big Four), only about 20 percent of service personnel are CPAs.
“How do we actually define ‘CPA?’” he asked, positing a world where changing client needs and demographics lead more and more firms to hire non-CPAs, leading to firms that are CPA-led, as opposed to having CPAs all through the staff.
He also envisioned major changes in the core skill sets of the profession. “In a decade, there won’t be a need for us to have deep learning of an accounting standard,” he said. “We’ll have bots for that. We’ll need higher-level skills.”
Perhaps most important, he thinks accountants will need to be ready to radically reimagine the field.
“In the early days of the profession, tax wasn’t part of our work. It was only after the income tax amendment that we saw the opportunity to bring it in as a core part of our profession. Audit wasn’t either, but in the 1930s, we took that in as a core part of our profession,” he explained. “Our challenge is to see the new opportunities, and to take those on. If we don’t do that, we aren’t guaranteed our space. But if we take them on, our opportunities are endless.”
15th Annual Tax and Accounting Technology Innovation Awards Announced in Los Angeles
The top technologies for tax and accounting professionals were honored on Tuesday at the Los Angeles Convention Center. The 15th annual Technology Innovation Awards were presented by CPA Practice Advisor during a special ceremony at the Accounting & Business Show - LA. The event, held July 25-26, gathered more than 2,000 financial professionals from across the country for accounting and tax education topics and keynote speakers.
The Tax & Accounting Technology Innovation Awards honor new technologies that help accounting firms and their small business clients operate more efficiently and profitably through improved workflow, increased accessibility, or enhanced collaboration.
“These awards recognize new technologies that can benefit tax and accounting professionals, and their clients” said CPA Practice Advisor Editor-in-Chief Gail Perry, CPA. “As the profession continues to embrace new workflows and processes that optimize the potentials of these technologies, firms are improving their efficiency and focusing their practices on more profitable service offerings that, at the same time, are more beneficial to the small businesses that rely on them for advice and strategy." Perry also manages a tax practice and is the author of more than 30 books, including Mint.com for Dummies, and Idiot's Guide to Introductory Accounting.
CPA Practice Advisor provides a variety of independent digital and print resources for accounting professionals, including practice resources, technology reviews, interactive tools and content that helps firms achieve greater productivity.
In addition to the winners and finalists, more than 40 technology products and services were nominated for this year's Innovation Awards.
Learn more about the Innovation Award winners and finalists in the August issue of CPA Practice Advisor.
