Академический Документы
Профессиональный Документы
Культура Документы
By Rick Telberg
Five Key Factors and Nine Management Strategies for Seizing the Advantage
This custom publication has been sponsored by Research In Motion Ltd. Copyright 2009. Bay Street Group. All rights reserved.
Table of Contents
Executive Summary ............................................................................................................. 3 Methodology....................................................................................................................... 3 Five Key Factors Driving New Opportunity............................................................................ 4 Key Factor 1: Crisis Creates Opportunity.......................................................................... 5 Key Factor 2: Recovery, Re-Regulation And New Rules.................................................... 5 Key Factor 3: Yes, New Taxes ......................................................................................... 7 Key Factor 4: The Talent Shift ......................................................................................... 8 Key Factor 5: Technology Drivers .................................................................................... 8 Nine Management Strategies for Seizing the Advantage....................................................... 10 1. Client Satisfaction ..................................................................................................... 10 2. Business Development............................................................................................. 10 3. Employee Recruitment and Retention ....................................................................... 10 4. Technology Management and Cost .......................................................................... 10 5. Expense Control ...................................................................................................... 11 6. Document Management........................................................................................... 11 7. Research ................................................................................................................. 11 8. Time and Billing ....................................................................................................... 11 9. Unified Messaging ................................................................................................... 11 Conclusion........................................................................................................................ 11 Appendix........................................................................................................................... 12 Research Survey ................................................................................................................ 12 Demographics ................................................................................................................... 12 Survey Results and Findings .............................................................................................. 13 1. Smartphones play a key role in helping accounting firms achieve important business objectives................................................................................... 13 2. The single, most important benefit stems from mobile, real-time connectivity ............. 13 3. Accountants commonly report instances of obtaining competitive advantage through smartphone use.......................................................................................... 14 4. Huge opportunities remain for accounting firms to leverage smartphone capabilities ... 15 5. Accounting firms support smartphone usage as a matter of business policy............... 15 6. BlackBerry is preferred .............................................................................................. 16 Conclusion........................................................................................................................ 16 Statement.......................................................................................................................... 17 Bay Street Group LLC........................................................................................................ 17
Executive Summary
The year 2009 will forever be remembered as a time when the global economy began a painful restructuring amid a cascade of systemic failures -- credit panic, stock market crash, and mortgage meltdown and business contraction. But some smart and able accounting firm decision-makers stand to benefit... if they can catch the right trends. In this research report, we examine five of the critical issues that are creating new opportunities for the accounting profession and nine key strategies for obtaining competitive advantage.
Methodology
For this research project, Bay Street Group LLC contacted and interviewed in depth more than two dozen acknowledged thought leaders in the profession. Highlights of some of those interviews are included here. In addition, Bay Street Group LLC conducted an online survey of professional accountants, focusing on decision- makers in mid-size to large accounting firms to assess their use of cell phones, smart phones and related mobility strategies. Some of those survey findings are presented here as well.
Already, accountants have become accustomed to throwing around phrases like TARP, TALF, PPIP and ARRA. The multi-trillion-dollar stimulus and recovery programs are mobilizing throngs of accounting talent; and accounting firms are actively and openly vying for a piece of the bailout oversight spending. President Obama is on record for a financial regulatory system with better enforcement, better oversight, better disclosure, and increased transparency. With the re-regulation of the accountingintensive financial sector, the profession expects new revenue streams for a long time to come. Its a time of tremendous opportunity, agreed David Costello, president of the National Association of State Boards of Accountancy, which represents the 54 U.S. jurisdictions that directly regulate accountant certification and licensure. We can expect increased and more complex regulations, which will drive up demand. And the premium placed on ethics, competency and integrity will naturally work in favor of the profession. In addition to complex new regulatory regimes, United States business executives are also facing the imminent prospect of abandoning a century of Generally Accepted Accounting Principles in favor of a new set of global rules -- International Financial Reporting Standards. The implementation timetable has been pushed back while the U.S. Securities and Exchange Commission wrestles with the financial crisis. But a single set of worldwide accounting standards is inevitable, according to Jim Reeves, senior vice president in charge of new product development for the PPC line of tax and accounting manuals at Thomson Reuters. Globalization simply cant be ignored. The competitive edge will belong to the professionals and the firms who can best identify the opportunities, often among their own client base. Indeed, 16 percent of U.S. corporate assets are already owned by foreign corporations, which are, of course, already using the new global standards. Leading-edge U.S. firms are finding fertile ground in gaining work at domestic subsidiaries of foreign companies by offering to translate GAAP into IFRS. Donald Applegarth, an audit partner at Schneider Downs, the nations 44th largest accounting firm, with 32 partners, 350 staffers and offices in Pittsburgh, Pa., and Columbus, Ohio, has been bracing clients for the costs of conversion to global standards. He says American companies, burdened with running both GAAP and IFRS simultaneously, could spend far in excess of the 0.05 percent of revenue European companies incurred. That may not sound like much, but an IFRS conversion could reap an accounting firm 5 to 10 times more billings than the average audit. U.S.-based global accounting firms have been gearing up for IFRS conversion for years. KPMG launched its effort in 2000, and, with 1,400 conversions so far, may be the leader. But Deloitte, Ernst & Young and PricewaterhouseCoopers are ceding nothing. Furthermore, conflict-of-interest rules make it problematic for companies to hire their own auditors, allowing a second firm to get its foot in the door. Often enough, that second firm is a smaller competitor eager to pick up ground-breaking work with a big-league client. Auditors at large and mid-size accounting firms are also gearing up for more changes to come. To name a few, in the shorthand auditors know: mandated XBRL data tagging; the advent of electronic confirmations; growing going-concern issues prompted by a tough economy; the extension to private companies of new rules FIN 48 on tax planning and SFAS 141R on business combinations; and new requirements for 403(b) audits at nonprofit organizations. In short, the compliance environment is exploding. With new regulatory rules, government audits, restructurings, workouts, bankruptcy activities, liquidations, fraud, and expert witness activitiesits hardly an overstatement to suggest accountants and auditors will be fully employed for the foreseeable future.
your staff sees it as freedom. Its freedom when you can attend your kids soccer game and still check your email on your BlackBerry. But old habits die hard. Traditionally, accountants apprenticed as auditors, where they were trained to look at the previous years workpapers and make sure they followed the same procedures again, noted Stephen Barrett, the partner in charge of technology at HKMP, a six-partner accounting firm in New York with 20 staffers. But you cant run a firm like that these days. At HKMP, he said, We try to take what we did last year, look at it, and find new ways to make it work better. As a result, HKMP has become the model of a modern accounting firm: There is no library; tax and accounting research is done online. There is no file room; all final records are scanned and stored electronically. The few file cabinets that remain in use at the firm generally contain snacks for the staff. (Look under G for the Granola bars.) The firm has automated every client process, created business dashboards for partners to check every morning, and made every document in the system available to whomever needs it, whenever, and wherever. HKMP has turned its passion for technology into a side business applying its own experiences to much larger accounting firms. For one such firm, HKMP automated the year-end closing process, saving about three-and-a-half hours per staffer per engagement. Barrett calculates the client is saving about $7 million a year. At the core of the HKMP system is a versatile, scalable document management system from Autonomy Interwoven, which is emerging as a market leader among mid-size to large firms. Most of our customers are what I would describe as progressive accounting firms, said Mark Jackson, senior product manager for accounting solutions at Autonomy Interwoven. They are pro-active at looking for ways to become more efficient and at improving their business processes. One of the strengths of the Autonomy Interwoven platform is the flexibility it provides developers in creating customized applications for use on handheld devices. Anything I do in the office, I can do at home, or on the road, or on my couch from my BlackBerry, Barrett said. With his BlackBerry, Barrett calculates his 40-minute, twice-a-day commute is worth $116,250 a year in billable time. Darren Root, founder of Root & Assoc. in Bloomington, IN, and executive editor of CPA Technology Advisor magazine, takes it one step further. For all the workflow economies that HKMP can build, the value is multiplied exponentially when it can all be done remotely, on a handheld device like a BlackBerry. Roots choice happens to be a BlackBerry Bold. With it, he can update his Salesforce.com customer relationship management system, which ties into his intact accounting system. He can practically start the invoicing process while talking to a client at a cocktail party with a drink in one hand and his BlackBerry in the other. But its more than that. We need to get to where were doing everything we can on our mobile devices, he said. Thats a whole new mindset for the firm of the future.
10
5. EXPENSE CONTROL: Smart cash managers know that capturing the travel, entertainment, meal and other routine expenses as soon as they are made is the way to assure accurate and timely accounting. Waiting days or weeks for an Excel spreadsheet to be submitted can wreak havoc with budgets. But expense recording applications designed for the BlackBerry platform allow partners and associates to capture expenses when they are incurred, allowing the firm to better manage expenses, speed up partner and associate reimbursements, and, of course, billbacks to clients. Exgis Time and Expense Pro, for example, tracks time, expense and mileage entries against clients, projects, locations, and, for international travelers, even foreign currencies. The data is exportable to a spreadsheet, which can be sent as an email back to the home office. 6. DOCUMENT MANAGEMENT: Roughly 40 percent of accountants say their firms send and receive documents via their smartphones. Plainly, access to critical work papers and client product is now standard at many leading firms. New BlackBerry smartphones, using tools like Documents to Go from DataViz, even offer the ability to edit, create and send Word, Excel, or PowerPoint documents and manage PDFs. And solution providers like Autonomy Interwoven deliver enterprise-level Worksite Mobility capabilities. 7. RESEARCH: Accountants with smartphones are taking their libraries and reference materials wherever theres a wireless connection. Some 40 percent are following business and financial news and checking competitive information on the web through a mobile browser. Some of most popular stops on the mobile web include Bloomberg, AP News, Thomson Reuters and the New York Times, which offer BlackBerry-optimized news readers. Meanwhile, major tax, accounting and legal research services such as CCH and Thomson are planning to follow their users with new mobile-based applications under development to meet burgeoning demand. 8. TIME AND BILLING: Nearly every smartphone user already maintains his or her calendar on their device, according to the survey. But if your firm is still tracking billable hours the same as 10 years ago, theres probably another firm thats doing it better and billing more. There are a bevy of time capture applications that simplify time keeping to yield more current updates to timesheets and greater visibility into resource effectiveness and availability. Airtime Manager, for example, prompts users after each call or email to book the time charges, capturing otherwise lost billings. 9. UNIFIED MESSAGING: With 99 percent of smartphone-equipped accountants using the device for phone calls and voicemail, the next big break-through in productivity is expected to be unified messaging. The BlackBerry Mobile Voice System merges the desk phone, the corporate PBX and the mobile BlackBerry smartphone. Calls are transferred seamlessly. The system drives down the cost of long distance charges and takes advantage of lower-cost landline charges. It also simplifies life for clients who need to recall only one phone number for their accountant. And it protects the firm by confining proprietary staff-client activity to a firm-owned device and database. With MVS, BlackBerry does for voice what it does for email.
CONCLUSION
The survey data and the in-depth interviews clearly reveal that the firms best prepared to capitalize on the current economic and business conditions will share several forward-thinking strategies. They will share new ways of working, flexible schedules, tight networking among colleagues and, of course, the right smartphone strategies.
11
Demographics
Responses were screened by two criteria: (1) Current and active smartphone users, and (2) Employed at mid-sized to large public accounting firms. The survey was closed when over 100 valid and demographically relevant responses were received. Breakdown as follows: Size of accounting firm 11 to 50 persons 51 to 100 persons 101 to 500 persons More than 500 persons Position/title of respondents Managing Partner/President/CEO/COO Partner/Senior Executive/ Senior Staff/General Management Mid-Level Staff/Auditor Junior Staff/Accountant Other, n.a., unknown 21% 49% 24% 2% 1% 3% 38% 26% 18% 18%
Of the respondents, 93% use a smartphone and an additional 7% use both a smartphone and a regular cell phone.
12
2. The single, most important benefit stems from mobile, real-time connectivity. When asked to identify the "single, most important" benefit of smartphone usage for their firms, accountants most often mention the constant connectivity that allows them to provide real-time client service and maintain efficient workflows. Sample verbatim comments: 1. Instant email notification and communication 2. 24/7 connectivity 3. Ability to react to issues more timely. 4. Ability to service a client when away from the office. 5. Access to the firm's lifeline of contacts and stockpiled emails and voicemails. Keeping those in check allow me to stay on top of them or they are like an unruly haircut. 6. Allows me to answer staff questions in a timely fashion. 7. Allows me to avoid missing appointments 8. Allows me to stay on top of office without being at home or in front of another computer. Freedom. 9. Allows us to be in contact with our clients outside of the office. 10. Allows us to be out of the office but still be able to handle work that needs to be done by people in the office and stay connected to our clients. 11. Allows us to be productive (billable) when we otherwise would not be. 12. Allows us to maintain real-time communications. 13. Almost instant communication and file sharing 14. Be responsive to clients while giving us the freedom to enjoy other parts of our life as well. 15. Client service and responsiveness. 16. Constant communication with co-workers to maintain productivity.
Copyright 2009 Bay Street Group LLC. All Rights Reserved
13
17. For me, the most important thing is having my calendar with me at all times, to update as needed while I am at a client, at home, etc. I put everything on there, personal, professional, volunteer work, etc. 18. It acts as a comprehensive Personal Assistant for email, phone calendar and contacts in order to act upon time-sensitive information and events. 19. It allows me to get my business e-mail pushed out to me when I'm on the road, so that I can deal with, and delegate, e-mails as they arrive during my downtime, rather than having to return to the office at the end of the day to have to deal with an Inbox full of e-mail. 20. Keep work moving and allow current changes in work assignments based on current changes in level of importance. 21. Keeping on top of things on a real time basis. Others aren't waiting a longer period for a response. 22. Keeps all my contacts and work performed for years 23. Make it possible to respond immediately to clients, making them think we are always available. 24. More clients treat e-mail like phone calls in that they expect a response in a very short period of time. When you are in meetings or on the road it helps stay in touch the way clients expect. 25. My phone allows me to go to manage staff and jobs without always being physically present. I provide better customer service when I am aware of my emails at all times.
3. Accountants commonly cited instances of obtaining competitive advantage through smartphone use. Respondents consistently reported that their use of a smartphone provides a discernible competitive edge. In one notable instance, a respondent reported: "Received notification of Madoff arrest before it was released to the media. That allowed me to call client/victims and alert them before they heard it on the news." Additional sample verbatim comments: 1. Yes, I would say that we have been able to respond more quickly than competitors to RFPs or other client requests because of connectivity. 2. Being able to answer client emails when out of town or not at the office has eased client concerns on numerous occasions. 3. Yes. We impress our clients with the ability to communicate and transmit information about their engagement while in the Weld. 4. Our timely response has convinced several new clients to use our firm. 5. Yes, I have been able to respond to clients and prospect immediately due to my having access to files, documents, and other resources. 6. We also can use it as a wireless device for our laptops. 7. Breaking news allowed faster response than competition. Continued dialog for negotiations while remote allowed better positioning. 8. Was able to tweak buyout spreadsheets for a client using Documents to Go. 9. Someone on vacation was able to check emails and respond or arrange for a response to a request for proposal. 10. The ability to respond quickly to developing client service opportunity by remotely receiving information via email and passing it on to another remote user via email who was able to coordinate with the prospect and respond quickly to secure the account.
14
4. Huge opportunities remain for accounting firms to leverage smartphone capabilities. While it is no surprise that accounting firms use smartphones primarily for phone calls, email, calendar and contacts, it is clear that many stand to gain from further leveraging their smartphone investment. How accounting firms use smartphones today Make and receive phone calls and voicemail. Send and receive email. Manage calendar, tasks and contacts. Text message or instant message. Sync with in-office applications. Receive and send documents. Surf the web. Follow business and financial news and issues. Play games. Watch video. Access/update customer relationship management (CRM) data. Research technical or professional questions. Monitor and manage document workflows Other Access accounting systems, ledgers, balances or bank accounts. Record time and billing. 99% 97% 94% 74% 58% 42% 42% 37% 16% 11% 8% 7% 6% 3% 2% 0%
In particular, applications and solutions are currently available to accounting firms to: 1. Manage documents and workflow 2. Access customer relationship management data, and 3. Record time and billing activities. 5. Accounting firms support smartphone usage as a matter of business policy. In cases where accounting firms have adopted smartphones, 24% of the firms issue devices to professionals hold the rank of senior staff or above. Another 26% of firms limit company-issued smartphones to partner-level personnel and 6% to only the managing partner. Who gets a "company-issued" smartphone in an accounting firm Managing Partner/President/CEO/COO Partner/Senior Executive -- and Higher Senior Staff/General Management -- and Higher Mid-Level Staff/Internal Auditor -- and Higher Junior Staff/Accountant/Administrator -- and Higher No one is issued a company-supported smartphone. 6% 26% 24% 4% 3% 28%
15
Survey results from smartphone users also indicate that 66% of accounting firms support smartphone usage by either buying the device directly (44%) or reimbursing the employee for all or part of the cost (22%). Who owns the device in an accounting firm It belongs to the user personally. It belongs to the firm. It belongs to the user but the firms helps cover the costs. 31% 44% 22%
Additionally, 50% of firms are willing to support both personally-owned and firm-owned devices. Smartphone spending policies are generally a high-level decision at accounting firms. Some 44% of firms lodge the power with the chief executive alone. Who makes the smartphone spending decision The CEO or Managing Partner A CFO, CTO, CIO or other C-Level Top Executive or Senior Partner A committee of senior managers and executives Other 6. BlackBerry is preferred. Among accounting firms with a preference, the BlackBerry mobile platform is preferred by more than a 2-to-1 margin over any other platform Accounting firms' preferred mobile platform No mobile platform used. No preference. BlackBerry preferred. Windows Mobile OS preferred. iPhone preferred. Palm OS preferred. Other 16% 20% 38% 14% 5% 5% 2% 44% 21% 28% 14%
Conclusion
Mid-sized and large accounting firms clearly see the value in equipping their senior client-service personnel with smartphones. And when they do, they most often turn to BlackBerry.
Research in Motion Ltd commissioned Bay Street Group LLC to conduct independent research and analysis in the accounting profession. The content of this report is the product of Bay Street Group LLC and is based on independent, unbiased research not tied to any vendor product or solution. Although every effort has been made to verify the accuracy of this information, neither Bay Street Group nor the sponsor of this report can accept any responsibility or liability for reliance by any person on this research or any of the information, opinions, or conclusions set out in the report.
16
Statement
New York June 2009 Bay Street Group LLC prepared this CPA Trendlines Special Report to (1) assess emerging risks and opportunities relevant to mid-size and large accounting firms in light of recent business and economic events and (2) to assess the state of smartphone usage and policies at such firms. For this research project, Bay Street Group LLC contacted and interviewed in depth more than two dozen acknowledged thought leaders in the profession and conducted an online survey of accounting professionals. As the exclusive sponsor, BlackBerry/Research in Motion Ltd. was consulted in the development of the project, received customized survey data expunged of personally identifying respondent data, and was provided with advisory services. This research is not intended for use beyond the context in which it is published and does not imply that organizations are guaranteed success by using only these findings to achieve their objectives. To be sure, gaining the most benefit from ones investment begins with an assessment of an organizations unique needs. Bay Street Group LLC hereby certifies that we wrote and edited this report independently, that the analysis contained herein is a faithful representation of our evaluation based on our research and our experience, and that the conclusions and recommendations are entirely our own. Bay Street Group LLC
Rick Telberg Principal Phone: 1 (914) 674-4531 Fax: 1 (425) 988-7736 rtelberg@baystreetgroup.com
Bay Street Group LLC 13 Atilda Avenue Dobbs Ferry, NY 10522 USA www.baystreetgroup.com 17