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Technology in Practice

When people say accounting, the word invokes thoughts of traditional bookkeeping, payroll and write-up programs, which are often grouped together and referred to as client services.

From the Sept. 2006 Issue

When people say accounting, the word invokes thoughts of traditional bookkeeping,
payroll and write-up programs, which are often grouped together and referred
to as client services. While higher level tax, audit and consulting services
have become the mainstay for most firms, the root of the traditional write-up
practice remains in virtually every firm today and is often the way that firms
are introduced to new and emerging clients. While these services are perceived
to be lower value by the owner group, there are methods to optimize profitability
on client services in-firm as well as transition these services externally at
higher margins.

Most firms in the past utilized a dedicated write-up package that also included
features such as after-the-fact payroll, depreciation, and the ability to consolidate
reporting for multiple entities. While there are many stand-alone programs,
vendors such as Creative Solutions and CCH have “suites” of products
with these capabilities, which also integrate write-up data with their other
applications, including audit, tax and document management programs. Integrated
suites can streamline processes by transferring data electronically, rather
than re-keying. For firms without a dedicated write-up product in-house, small
business accounting products have become the leading tool, particularly QuickBooks,
which is estimated to be the product used and supported by the majority of client
firms today for both internal write-up and external client support.

Many firms shunned QuickBooks for write-up in the past because of its lack
of financial statement formatting capabilities or because of negative experiences
with clients that completely messed up their books, with the firm’s bookkeeper
citing QuickBooks’ lack of controls as being the reason. I maintain that
today’s Windows-based write-up and accounting products in the hands of
trained accountants are some of the most reliable and usable applications in
the accounting firm. When these same applications are put into the hands of
an “untrained spouse of a construction company owner,” they immediately
become a liability to both the client and to the firm. So what can firms do
to optimize client services in today’s digital environment?

The first step in optimizing internal write-up is to re-evaluate the tools
you are currently using. In many firms, previous legacy applications and mergers
have the firm supporting a variety of products, and multiple versions of them,
many of which are no longer supported. Firms should evaluate whether a dedicated
write-up or off-the-shelf product is best suited to their client base. If a
firm has a higher volume of clients where they do traditional in-house write-up
and they also do the financial reporting, taxes and consulting services, those
tools integrated with their accounting suite may be a better choice. If they
are doing a limited amount of monthly write-up and doing more supporting of
external applications, it would be better to support the product that the client
is using. The key is to minimize the number of different tools so the firms
can standardize training and support.

Today, I see the majority of small businesses utilizing QuickBooks for general
accounting, while those clients needing inventory modules would also include
Peachtree. The biggest
issue with supporting QuickBooks within the accounting firm has always been
in dealing with multiple versions of the software, in which case I recommend
that firms only support the current or the two most recent versions. This can
be promoted to clients by requiring that they upgrade, and with the firm providing
a service to purchase and install the software at a client site as well as providing
education on the updated features.

Transferring data to and from the firm is another area that has been optimized
by today’s digital capabilities. For firms where the client wishes to
drop off and pick up their data, the most reliable physical media has evolved
from a floppy, Zip disk or CD, to today’s USB memory sticks. Innovative
firms have placed their logos on these USB drives and provided them to clients
so they can have a daily visual reminder of their accounting firm as they backup
data. To promote secured usage of these devices, firms are transitioning to
devices that have built-in encryption and require a password. Secured USB devices
such as the Lexar ThumbDrive Secure hold up to 512MB of data and cost roughly
$30. When firms consider how often other physical backup devices fail as well
as the time lost by requesting another backup, this cost is minimal compared
to staff time.

For firms that want to e-mail files to/from the firm, a password-protected
database backup can be sent. Unfortunately, the size of these files has increased
to the point where the capacity limitations of e-mail systems are beginning
to block them. A more reliable and expandable solution for moving files is the
use of a File Transfer Protocol, or FTP site. While an FTP site could be set
up by the firm’s IT person, the cost to properly build and secure such
a site is prohibitive when compared to solutions such as Creative Solutions’
Net Client, CCH’s ExecuSite and those provided by commercial services.
In addition to data transfer, there are also services such as GoToMyPC and Remote
Accounting Solutions that allow the firm to actually connect to the client’s
site through the Internet to review and update information.

The next step to optimizing client service is in the firm’s ability
to transition an internal write-up client to external controllership services.
Many firms have found that clients want to be able to handle the daily entry
of transactions and, in most cases, can handle basic input with direction of
the firm. Firms should be proactive in asking their clients annually if they
want to bring their bookkeeping in-house and to let them know that when they
are ready, that the firm will assist them with selecting and implementing the
application. By virtue of the firm setting up the system, transitioning the
data, and providing training, the firm is positioning itself to provide controllership

Whenever a client brings their accounting in-house, it is advisable to have
the firm review the client data at least monthly until the client becomes comfortable
with the system. Many clients that transition their accounting on their own
end up with a mess, leading to higher “clean up” fees and dissatisfied
clients at year-end. To counter this, the firm can promote controllership services
where they will review the client’s data and educate them on corrections,
as well as be available for questions. When the client has two months in a row
without adjustments, they can then work on their own. What most firms find is
that they have then transitioned the bookkeeping function to that of controllership,
which is at a higher rate and the firm has still maintained advisor status with
the client.

Another step in optimizing client services is to provide education to clients
on understanding bookkeeping and utilizing the “write-up” features
of their accounting product. Best practices for setting up, inputting data,
and backing up data should be documented in written format so it is easy to
provide to clients as well as to train internal personnel. Firm personnel also
need to be kept abreast of the latest features in accounting products so they
can direct their clients to utilize such features. QuickBooks and Peachtree
have training programs, as well as excellent seminars put on at the state CPE
society level by trainers such as Sleeter Group, K2 Enterprises and Bridg21.
These providers can help firms identify, understand and document best practices
in a matter of hours, which can be used for training and support. These programs
also allow firms to be made aware of competitive products such as Microsoft’s
Small Business Accounting and integrated document management capabilities such
as FileCabinet NG and Personable SourceLink.

Client services will continue to be an important aspect of providing accounting
advice to clients. By understanding and optimizing the delivery of these types
of services, firms will be able to continue to function as the trusted advisor.


Roman H. Kepczyk, CPA.CITP is president of InfoTech Partners North America,
Inc. and works exclusively with CPA firms to implement today’s leading
best practices and technologies.