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CPA2Biz, Inc. - Proprietary and Confidential Information How the Dynamic of the CPA/ Client Rela6onship Changes in the Cloud Firm Panel Discussion Tom Hood, CPA.CITP, CGMA CEO at Maryland Association of CPAs AICPA Practitioners/Tech Conference Wednesday, June 13, 8:00 AM - 9:15 AM

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How the Dynamic of the CPA Client Relationship Changes in the Cloud - A panel moderated by Tom Hood with Michael Hsu & Jennifer Katrulya. Tom asks how these two progressive firms are changing how CPA practices are working. The new model is mobile, social, cloud, collaborative, and value-added.

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Page 1: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

How  the  Dynamic  of  the  CPA/Client  Rela6onship  Changes  in  

the  Cloud      Firm  Panel  Discussion  

Tom Hood, CPA.CITP, CGMA CEO at Maryland Association of CPAs

AICPA Practitioners/Tech Conference Wednesday, June 13, 8:00 AM - 9:15 AM

Page 2: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Moderator:  Tom  Hood  •  Named  to  the  “Elite  13”  &  Top  100  Most  Influen;al  by  Accoun;ng  Today  

•  Top  25  Influencers  in  Learning  &  HR  by  HR  Examiner  

•  Top  25  Public  Accoun;ng  Thought  Leaders  by  CPA  Prac;ce  Adviser  

•  Currently  working  on    Performance  Management/XBRL  &  Learning  Management  with  AICPA/C2B  

Tom Hood, CPA, CITP, CGMA CEO MACPA Business Learning Institute (BLI)

Page 3: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

CPA Panelists • Michael  started  DeepSky  in  2009  with  the  mission  of  helping  entrepreneurs  build  beTer  companies  through  ac;onable  business  insights.  DeepSky  was  designed  in  a  similar  structure  to  that  of  an  in-­‐house  accoun;ng  department  vs.  a  tradi;onal  tax  or  A&A  firm    

•  In  three  years’  ;me,  DeepSky  has  grown  from  a  fledgling  startup  to  a  leader  in  the  outsourced  accoun;ng  space  with  customers  from  all  around  the  country    

• Michael  has  been  featured  and  quoted  in  Accoun1ng  Today,  CPA  Prac1ce  Advisor,  and  various  business  blogs  

•  His  firm  serves  the  Entrepreneurial  service  space  -­‐                $1-­‐10M  –  who  are  open  to  cloud  technology  

• While  he’s  based  in  CA,  his  biggest  client  resides  in  Washington  DC  –  who  he’s  never  met  

     

Michael Hsu, CPA.CITP, MSA Founder & CEO DeepSky – Entrepreneur’s Accounting Department

 

Page 4: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

 

Jennifer L. Katrulya, CPA Founder & CEO BMRG, LLC

CPA  Panelists  •  Founder and CEO of BMRG, LLC •  Managing Partner – BMRG Group Advisory

Program for CPAs •  AICPA/CPA2Biz Facilitator for the Trusted

Business Advisor Cloud-Based Client Accounting Practice Development Training Program

•  BMRG supports the following products and services:

–  Outsourced Accounting and CFO Services –  Payroll Processing and Compliance –  Business Coaching and Advisory Services for BMRG

Clients –  Integrated Application Sales and Support (Bill.com,

Merchant Services, Payroll, and select 3rd party applications and services)

–  CPA practice and ProAdvisor advisory/coaching services –  Software application training and general business classes

at regional colleges and professional associations

Page 5: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

CPA  Horizons  2025  

•  1.  CPAs  must  stay  current  with,  embrace  and  exploit  technology  for  their  benefit  for  increased  efficiency  and  expansion  of  services.  

•  2.  The  profession  must  find  solu;ons  to  offer  investors  and  stakeholders  up-­‐to-­‐date,  real-­‐;me  financial  informa;on  and  to  increase  transparency.  

•  3.  CPAs  must  embrace  mobile  technologies  and  social  media  to  modernize  and  enhance  interac;on  and  collabora;on  with  clients  and  colleagues.  

Page 6: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

•  Clients with revenues > $1 million and most $2-$20 million per year, some higher

•  Many with more than 20 employees, several with more than 50 employees

•  Clients in most of the 50 states and 13 other countries (all U.S. based)

•  All services provided remotely (even for local clients)

•  Specialized industry verticals •  Value-based pricing and bundled service

options currently ranging from $1,500/mo. to $16,500/mo., average $4,900 per month, realized rates of $125-$800/hr.

•  Staff in multiple states and in-office staff earn telecommuting privileges

•  Clients with revenues < $1 million

•  Generally fewer than 10 employees

•  Within 75 miles of our Connecticut office

•  We worked on-site with clients within 20 miles of our office (CFO Services Only) and remotely with all others

•  Worked with nearly any industry

•  Billing rates ranged from $45-$175/hr

•  Staff worked full-time from our NY and CT offices

BMRG  -­‐  Then  and  Now    BMRG  Clients  and  Staff  in  2004:     BMRG  Clients  and  Staff  Today:  

Page 7: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Cloud  Compu6ng:  Disrup6ve  Innova6on  

•  Small  Business  Accoun;ng  and  Client  Accoun;ng    

on  the  verge  of  disrup;on  

•  Cloud  compu;ng  is  drama;cally  changing  how    

accoun;ng  sodware  is  developed  and  delivered    

•  New  paradigm  emerging  for  small  business  &  a  new  

market  is  being  created     Incredible Opportunity For Firms

Page 8: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

•  Improve client financial performance with proactive consulting • Save time and reduce cost by standardizing and leveraging automation and repeatable processes •  Increase real-time collaboration with clients by accessing information in the Cloud •  Increase margins by providing higher value with increased productivity

•  Low margin transaction processing •  Means to an end; a Tax Return

•  Pressure to keep fees low •  Non-strategic

Before:  Transac;onal   Today:  Advisory  

Page 9: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Move  Up  the  Client  Value  Pyramid  

Client  Value  Pyramid  

Controllership  Services  Monthly  Close,  Fin  Statements,  Cash  Flow  Analysis  

Virtual  CFO  Budget,  Business  Planning,  Business  Modeling,  etc.  

Transac6onal  Services  Tax,  Write  up,  Bookkeeping,  A/P,  Payroll,  etc.  

More  CPAs  are  becoming  outsourced  CFOs  for  their  small  business  clients  

Page 10: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

•  Being  able  to  work  anywhere,  any6me:  88%                5%  

•  Disaster  backup  &  recovery  :  85%  

•  Improved  client  service  &  collabora6on:  84%  

•  Being  able  to  use  the  latest  applica6ons:  82%              4%  

•  Being  able  to  serve  non-­‐local  clients:  80%    

•  Expand  services,  create  new  revenue  sources:  79%                11%  

Key  Benefits  of  Accoun6ng  Firm  Usage  of  Cloud  Applica6ons  CPA2Biz  2012  Technology  Survey  

   

   

   

Page 11: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Regarding  a  physical  office:  

•  In  2011  4%  of  firms  were  “virtual”    

•  By  2012  those  numbers  have  grown  to  8%  

Growth  of  Virtual  Office  CPA2Biz  2012  Technology  Survey  

Page 12: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Ge^ng  Ver6cal  through  the  Cloud  Business  

Intelligence  Repor6ng  

 

Real-­‐Time  Client  Collabora6on  

 

Standardized  Workflows    

 

Client  Accoun6ng  Capabili6es  

driven  through  cloud  

compu6ng  

•   Professional  Services  –  90%  

•   Construc6on  –  76%  •   Retail  –  75%    

•   Not-­‐for-­‐Profit  –  73%  

•   Manufacturing  –  65%  

•   Wholesale  Distribu;on  –  61%  

•   Technology  Companies  –  59%  

•   Transporta;on  –  48%  

•   Hospitality  –  45%  

•   Franchises  –  40%  

•   Government  –  29%  

Most  Popular  Client  Ver6cals    for  Outsourced  Accoun6ng  Services        

Page 13: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Game  Changing  Transforma6on  

Moving  From  Systems  of  Record    

To  Systems    of  Engagement    

•  Collabora;ve  •  Intelligent  •  Knowledge  Based  

TODAY     FUTURE    

•  Consolidate  •  Organize    •  Report  

(The  Digital  CPA  )  

Geoffrey  Moore  Slide  –  Adopted  for  CPA  Marketplace  

Page 14: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Importance  of  Digital  Brand  in  Client  Rela;onship    

Historical  

•  Meeting in an office •  Phone •  Classified •  Yellow Pages

Today

•  Online Collaboration •  Email •  Social Networking •  Search

Page 15: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Consumer  Email  Account  

[email protected]    

What’s  Your  Online  Digital  Brand?  

Professional  Email  

1.  Firm  Branded  Domain:  -­‐  www.smithcpa.com  -­‐  Branded  web  site  and  email    2.  CPA.com  Domain  -­‐  [email protected]        

Page 16: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Accoun6ng  Firm  Use  of  Social  Media  CPA2Biz  2012  Technology  Survey  

•  34% of CPAs surveyed are using tablets (iPads) for business purposes, and another 12% plan to soon

•  According to recent Boomer study, this is as high as 57% for mid sized firms

 -­‐        

 10    

 20    

 30    

 40    

 50    

 60    

 70    

 80    

LinkedIn   FaceBook   TwiTer   Blog  

2011  

2012  

Firm Usage of Blogs and Twitter each up 60% year-over-year

Page 17: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

How  is  your  firm  changing?  

•  Firm  Branded  Web  Site  &  Email    

•  Google  Adver;sing  Campaign  to  drive  new  business  to  firm  

•  Launch  a  Mobile  App  

•  Be  ac;ve  on  LinkedIn    •  Start  Video  Blog  and  post  to  YouTube    

•  Create  a  TwiTer  profile  and  Facebook  Company  page    

 

AOL/Yahoo                          email  

               Web  site  with  brochure-­‐type  

content  

Minimal  ac;ve  firm  marke;ng  and  networking    

Use  only  tradi;onal  

channels  for  staff  recruitment      

Old  Technology  

You  can  leap  from  old  to  new  technologies  with  smart  business  strategies  and  minimal  investment  

Page 18: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Accounting Firm-Branded Mobile Apps

Eide Bailly

KPMG

Moss Adams

THE APP IS THE WEB SITE OF THE 90’s AND IS COMING TO SMALL FIRMS

Page 19: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Mobile-Friendly Practice Management Tools

Salesforce.com CCH Mobile

Page 20: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Accounting Software in Your Mobile Device

Bill.com

Intacct

Page 21: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Mobile  Bill  Payment!  

•  Access multiple client accounts"

•  View/Approve bills"•  View approver notes"•  Make secure

payments"–  Multiple bank

accounts"

–  Adjustable payment timing"

Page 22: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

• Security:  73%  concerned  (          8%  from  2011)  

• Confiden6ality:  72%  concerned  (        8%  from  2011)  

• Privacy:  67%  concerned  (        11%  from  2011)  

• Availability:  64%  concerned  (          4%  from  2011)  

 

   

TOP  CONCERNS  (SIGNIFICANTLY  OR  SOMEWHAT  CONCERNED)  

CPA2Biz  Survey  Results  –  April  2012  Accoun;ng  Firm  Usage  of  Web-­‐Based  Applica;ons  

Page 23: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

What  alleviates  CPAs’  concerns?  CPA2Biz  2012  Technology  Survey  

0%  

10%  

20%  

30%  

40%  

50%  

60%  

70%  

80%  

90%  

100%  

Company  reputa;on  

SOC  2     Other  firms'  usage  

Strong  SLAs  in  place  

Training  on  cloud  service  

Not  Important  

Somewhat  

Very  Important  

Page 24: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Digital  Darwinism?  

Page 25: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

You  have  3  years  at  most!  

•  Cloud  •  Mobile  •  Social  •  Value-­‐added  •  Collabora;ve  

hTp://cpa.tc/socialbiz  

hTp://cpa.tc/engagement  

Page 26: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

The  Digital  CPA  Cloud  User  Conference    

Firm  Technology  Trends    

Prac6ce  Development  

Tools  

Hands-­‐On  User  Training  

Cloud  Compu;ng,  Mobile,    Social  Media,  Change  Management  

Building  a  Virtual  CFO  Prac;ce…Pricing  Services,  Engagement  LeTers,  Staffing  Models,  Marke;ng  Best  Prac;ces  

Accoun;ng  Sodware,  Bill  Management  and  Cash  Flow,  Tax,  Accoun;ng  &  Audi;ng  Workflow  Automa;on  

Oct  28  -­‐  Oct  30,  2012    Gaylord  Na;onal  Hotel    and  Conven;on  Center    

Gaylord  Na6onal,  Washington,  DC    Recommended  CPE  Credit:  19    

Page 27: AICPA PSTECH - CPA Relationships & Cloud Panel

CPA2Biz, Inc. - Proprietary and Confidential Information

Want  more?  

hTp://cpa.tc/2012Summit/  

hTp://cpa.tc/BeachRetreat/  

Page 28: AICPA PSTECH - CPA Relationships & Cloud Panel

Tom  Hood,  CPA.CITP  CEO  

Maryland  Associa6on  of  CPAs  Business  Learning  Ins6tute  

(443)  632-­‐2301  E-­‐mail  [email protected]  

Web  hnp://www.macpa.org  Blog  hnp://www.cpasuccess.com