five tech trends you can’t ignore

what’s next in cpa technology?

by rick telberg

hit hard by the worst economic downturn since the great depression, accounting firms and finance organizations are reacting, like many businesses, by curtailing or postponing expenditures on technology.

but accountants and finance professionals can hardly afford to fall behind at a time like this, according to three leading technology advisers with whom i have spoken. instead, finance and accounting professionals should be using this period to catch up and even leap ahead. and with technology costs coming down, it’s hard to argue with the arithmetic.

cloud computing and software-as-a-service (saas);there are at least five key strategies these leading advisers are recommending today:

• mobile devices, from netbooks to smartphones;
• smarter scanning and recognition for document management;
• virtualization to get the most of your existing servers; and
• social media tools and strategies (like twitter, facebook and linkedin).

brian tankersley, cpa.citp, who trains cpas for k2 enterprises, the aicpa and becker cpa review, sees a “tentative” interest among accounting firms in saas solutions. but, he says, cpas still need to be convinced that the authentication safeguards in security are “bulletproof.” “we’re almost there,” he says, “but it starts at the accounting firm. until i see accountants walking around with usb-drive security keys, like most bankers do, i won’t be convinced that accountants really ‘get it.'”

for now, accountants and finance managers alike are making document management one of their top strategies, according to tankersley. and the biggest vendors – cch wolters kluwer, thomson reuters and intuit – are trying to make it both easy and inevitable with new automated scan-and-organize strategies. thomson and intuit, in fact, are even offering fujitsu scanners to encourage some customers to go paperless.

the next step in the paperless evolution, tankersley says, will be automated document recognition. “we could get out of the business of rekeying invoices,” tankersley says. “that could be huge.”

like tankersley, byron patrick’s top-of-mind worry for accountants and finance managers these days is data security. patrick, who is a cpa.citp, the ceo of hosted solutions inc. and a member of the maryland association of cpas board of directors, asks: “should we really be e-mailing tax returns?”

to be sure, there is nothing inherently risky about e-mail. in fact, it’s probably safer than postal mail. but too many accountants – like anyone, really – are using easy-to-guess passwords. (and you know who you are, “fluffy” and “snowball.”) and, patrick says, just recall the last time you heard someone in your office scream “oops!” after mistakenly hitting “reply to all” on an up-till-then private e-mail message.

even if your firm or finance organization is in full compliance with privacy and security rules today, patrick warns, “you’d have to have your head in the sand not to know about the dangers.” furthermore, “you need to worry about five years from now, long after you’ve done the work and the company’s gone bad and the lawyers have come in to look for liability. is what you’re doing today going to look prudent and diligent five years from now?”

worried yet? but there are solutions available today. patrick is a fan, as his company’s name might tell you, of saas, or “cloud computing.” to oversimplify, “cloud computing” means putting your apps and data on remote servers – secured, encrypted and in h-bomb-proof bunkers. client portals and services like leapfile and securesend are natural next steps for many accounting operations.

in a cautionary tale told by patrick, a small maryland accounting firm recently “lost” three laptops – pilfered, probably, over a weekend. but there was no reportable breach of privacy or security because the laptops were little more than dumb terminals, holding no data and just barebones software.

in the future, patrick predicts, more accounting firms and finance organizations will be turning to cloud solutions in order to fully leverage cheaper hardware, reduce downtime, speed adoption and cater to a more mobile workforce and client base. “it’s coming fast and hard,” he says. “people are coming to work with their own cheap netbooks, their macs, their iphones and their blackberrys and telling the it guys: ‘hook me up.'” employers and managers resist the trend at their peril, he warns. and what for? if your staff wants 24/7 connectivity to work, why stop them? patrick notes you can do almost anything on your smartphone that you do in your office. “i can stream your desktop to your iphone,” he says.

chris jenkins, chief technology strategist at the ohio society of cpas, agrees with tankersley and patrick that security should be at the top of every accountant’s worry list. our daily use of technology has made us complacent, he says. “people begin to place too much trust in it and just assume that it’s safe.”

jenkins urges accounting firms and finance organizations to use offsite back-up solutions. and, while many already are, too many still don’t go far enough. “for back-ups to be encrypted over the wire and the remote end is not enough,” he told me. “data needs to be encrypted locally so firms can ensure that they maintain control of the keys and the data.” even if you’re using tape back-ups, he adds, “all back-ups need to be encrypted as they represent far too large of a target to allow easy access.”

but he’s not yet a big a fan of the cloud, preferring instead “virtualization,” a broad term that, in jenkins’ parlance, refers to centralizing a firm’s apps and data on its own servers. the strategy saves money on both server equipment and desktop pcs. but it also streamlines maintenance and upgrades.

finally, jenkins sees big changes for accountants and finance managers in the advent of social media. “the internet has changed customers’ expectations of building real relationships,” jenkins says. “the sooner firms understand that social media isn’t a fad, the better.”

in fact, tankersley, patrick and jenkins are all easily found on twitter — at @bftcpa, @byron_cpa, and @chris_jenkins. you’ll find me at @cpa_trendllines.

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posted on august 10, 2009