3 Technologies CPA Firms Must Leverage in 2023
With more work to do than staff can deliver, deploying new technologies is key to meeting client demands—here are three to consider.
Now more than ever, technology is essential to CPA firm growth and business development. Whether it’s automating mundane, time-consuming tasks or enabling access to more data and insights, the new technologies available today can help CPA firms elevate their roles as trusted business advisors and meet ever-growing client demands.
“If you aren’t moving forward with new technologies to improve workflow and add value for your clients, you’re effectively going backward relative to your competitors,” says LeeJay Stewart, CEO and managing director of StratusComm, a provider of fully managed IT services and support for the financial services and other industries.
With that in mind, here’s a brief look at three technologies CPA firms can leverage in 2023 to bring value-added services to their clients.
1. CLOUD HOSTING
A typical CPA firm today uses more than 100 different software applications for various practice management and accounting-related tasks, including the familiar productivity tools like Microsoft Office, web browsers, Zoom, and Teams.
According to Roman Kepczyk, CPA, CITP, CGMA, director of firm technology strategy at Right Networks LLC—a cloud service provider focused exclusively on the accounting profession—about two-thirds of these programs are now available via software-as-a-service (SaaS) or cloud services. Just consider many of the leading applications used by CPA firms today, like those offered by Intuit, CCH/Wolters Kluwer, Sage, and Thomson Reuters.
What this means for CPA firms is that they can now access and run these applications using a mix of web browsers and remote-access tools that, to the user, provide the same desktop user experience but eliminate many of the burdens of the firm’s IT staff maintaining the applications.
For instance, key updates to applications are applied quickly and uniformly by the cloud provider. “If Congress passes a law with tax consequences, the major accounting software providers have to quickly update their software, often several times a week throughout tax season, which can be challenging for some internal IT departments not experienced with these accounting and finance applications to keep up with,” Kepczyk says. “With a cloud hosting provider, a firm doesn’t need to worry about this and also gains the ability to easily ramp up users as needed during busy season and downsize afterward.”
To successfully move your applications to a cloud hosting service, Kepczyk recommends using a cloud hosting provider that works with accounting firms, either exclusively or as one of their vertical markets: “Evaluate the providers—find one that does or can host all your applications and is certified with government and industry security and privacy regulations.”
Since accounting-related cloud hosting providers likely already host all the applications CPA firms typically use, Kepczyk says the migration process should be straightforward. “There’s no code migration or development involved,” he notes. “Meaning, once a pre-sales assessment is done and the contract is signed, it typically takes about two-to-six weeks to match your application and infrastructure configuration requirements, migrate any software licenses, copy your data, and transition everyone over to the cloud-hosted system.”
2. DIGITAL TRANSFORMATION
“Digital transformation can refer to taking anything being done manually, or with manual processing, whether from paper or human entry, and turning that into digital transactions,” Stewart says. “But digital transformation goes beyond simply making information available to users through online portals and workflow, analytics, and other software. It must combine information and processes to help analyze the data and provide summaries, highlight exceptions, suggest actions, and more.”
When considering a firm’s current activities, digital transformation can reduce task turnaround and employee time-per-task and provide customers with better service. For example:
- What had once been a 10-step manual process involving several people might become a single click from a dashboard by one person.
- When a client calls, emails, or texts, a CPA can instantly see a client's information with action items highlighted.
- A client can login to a firm’s website to check for information, request forms, e-sign documents, and more.
Overall, Stewart stresses that digital transformation allows an organization to be nimbler: “You can make quicker adjustments, faster changes.”
When information changes from paper to digital form, tasks also become less tied to a specific individual in a specific location and, similarly, eliminates the need to access physical forms or documents, which COVID-19 and other work-from-home factors have made increasingly essential.
Additionally, digital transformation allows CPA firms and their teams to provide higher levels of advice (i.e., customer-facing services and analysis that can help clients improve and grow their businesses), which could add new revenue streams or allow different business models to flourish.
Stewart notes that the time and cost to digitally transform a given process depends on many factors, including the number of transactions being processed, what needs to be automated, how many people are involved, and the maturity of the existing process: “For simpler processes and smaller organizations, it may take less than a month, but in more complex situations, it may take up to a year to fully automate a process.”
3. ROBOTIC PROCESS AUTOMATION
Robot process automation (RPA), also known as robotic accounting, means turning manual accounting tasks into computerized, “fewer-click” ones. RPA allows tasks that are typically multiple steps of data entry to be encoded as a set of rules and actions—like Excel macros with the exception that it can work with and across multiple applications.
According to Blackline, which provides cloud software that automates and controls critical accounting processes, “RPA shines when running discrete, simple, high-volume tasks that would usually require little human supervision, such as invoice processing, entering sales orders, processing refunds, and automating customer service responses.”
“If you’re a CPA firm doing work for property management or real estate companies, trying to analyze data from Excel spreadsheets across multiple systems manually could take you up to 40 hours,” says Todd Cooper, senior manager of Channels at CPA.com. “But with RPA, you may be able to pull that same data in less than an hour.”
Within the past year or so, RPA tools have begun incorporating new technologies like artificial intelligence, machine learning, and natural language processing. Combined, more intelligent RPA tools are helping firms automate business processes faster and less costly than in the past, while also allowing more sophisticated and higher-value tasks to be automated.
At minimum, CPA firms need to explore RPA because it can reduce staff time and involvement in accounting tasks, help provide faster responses to clients’ requests, improve accuracy, and monitor compliance.
“Automating accounting tasks helps eliminate errors—if the process is repeatable then automating it can help eliminate errors,” Stewart says. “Generally speaking, having the right information available at the right time also lets CPAs and clients make decisions faster.”
RPA can be implemented with automation platforms (e.g., Automation Anywhere, Blue Prism, and UiPath) that connect to a firm’s existing systems, rather than requiring them to be replaced. Notably, the more cloud-based a firm’s IT architecture already is, the easier it is to implement RPA solutions. Also, depending on a firm’s size and IT preferences, the implementation may be outsourced to the RPA tool provider. However, be prepared for RPA implementation to take time, particularly the first test cases. Allowing sufficient time ensures that not only the processes work as intended, but that safety in terms of data privacy, security, and compliance are top of mind.
CPAs used to just be bookkeepers. Today, they’re expected to be clients’ most trusted and strategic business advisors. As more CPA firms develop and deploy advanced technologies to support their value-added and expanded client accounting services, the more critical it’ll be for every other firm to keep up. For CPA firms looking to embrace these new technologies, the best advice seems to be to start with specific, well-bounded tasks and processes, and then build on success.
Remember, cloud hosting, digital transformation, and RPA are interrelated. Ultimately, the more CPAs and their firms move their applications and data into the cloud, the easier and more effective implementing a complete digital transformation supported by RPA will become.
Daniel P. Dern is a Boston-based freelance technology and business writer.