Technology – the great enabler for virtual cfo & bpo services

Walt Disney WorldSwan and Dolphin Resort

Orlando, FL

D01 –Technology – The Great Enabler for Virtual CFO & BPO Services

June 8, 2015 10:15 AM – 11:30 AM

Thomas R. Gawne, CPA – CPA.com

#PSTechIN PARTNERSHIP WITH

American Institute of CPAs® #PSTech

Thomas R. Gawne, CPA

• Professional Services Systems Engineer

• 29 years in the tax and accounting technology sector

• Consultant & Facilitation Leader


Agenda

Introduction

New Value Services & Key Strategies

Technology Implications

Workflow Implications

Wrap-Up


New Value Services


Firm Value Chain

Input Data

Assemble

& Verify

Report

Analyze &

Interpret

Advise &

Consult

Higher Value & Future Focus

Lower Value & Historical Focus


BeforeTransactional

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

TodayAdvisory

Low margin transaction processing

Means to an end; a tax return Pressure to keep fees low Non-strategic

Changing Landscape


1990

2000

Today

Transformation of Client Accounting

Today’s

opportunity

Cloud-based

Integrated

Paperless

Dashboards

Real-time

Small businesses push work back to firms to

focus more on their business

Role of firms reducedQuickBooks introduced

to small businesses


Client Accounting Services Pyramid


Today: Disconnected Systems Ideal: Connected/Holistic

QuickBooks POS Payroll

Manual Processes

Restaurant Managers

Many checkbooks

Several locations Bookkeeper Inventory

Restaurant

Group

To Transform Disparate Systems


Accounting Services Today

The Opportunity

• Ride the wave of demand for outsourcing

• Leverage cloud technology to achieve:

- greater levels of productivity

- closer collaboration with clients

- delivery of deeper levels of wisdom & insight


Key Strategy – Get Vertical!

Business Intelligence Reporting

Real-Time Client

Collaboration

Standardized Workflows

Client Accounting Capabilities

driven through cloud

computing technology

• Professional Services –

90%

• Construction – 76%

• Retail – 75%

• Not-for-Profit – 73%

• Manufacturing – 65%

• Wholesale Distribution –

61%

• Technology Companies –

59%

• Transportation – 48%

• Hospitality – 45%

• Franchises – 40%

• Government – 29%

Most Popular Client Verticals for Outsourced Accounting Services


Key Strategy – Assemble Staff

Partner-in-Charge CAS Business Group

Business Development

Marketing/Sales, Finance, Human

Resources, Technology, etc.

Director of Client Accounting Services

Virtual CFO

Implementation & Client Support

Services (separate positions as the firm grows)

Client Relations (Client Scheduling,

Contract Maintenance, Client

Satisfaction)

Virtual Controller

Accounting Manager

Accounts Payable

Accounts Receivabl

ePayroll


Steps in the Prospect-to-Client ProcessKey Strategy – Well Orchestrated Approach


1. Prospect Qualification

Standardized questionnaire

Keep high-level

Develop the right questions that fit your business model & vertical niche

Prospect Qualification


2. Client Assessment

On-site or virtual/remote client assessment

Understand and document current workflow and procedures

Document transaction workflow, procedures and best practices

Assessment is a paid-for service with a deliverable of a final analysis

Client Needs Assessment


3. Short Term CFO/ Technology Consulting

Short Term CFO/Technology Consulting

Typically short term implementation services

Possible data migration

Clean up to enable on going services


“Bread & butter” of a BPO firm

Construct as packages: bronze, silver, gold so that there is a fit for most budgets

Collect fees before the services are provided

Develop deep knowledge in the verticals you focus on, constructing industry specific KPI’s

Ongoing Services

4. Ongoing Services


3. Short Term CFO/ Tech Consulting

4. Ongoing Services

2. Client Needs Assessment

1. Prospect Qualification

Key Strategy: Prospect to Client Process


Key Strategy: Firm/Client Collaboration

Close CPA firm and client collaboration to deliver better financial advice, help them make faster, smarter business decisions and improve their financial performance

Facilitates real-time vs. after-the-fact decision making

Focus on technological improvements to enable heightened collaboration and are making shifts to their client accounting services practices


Client Accounting Services

• Firm typically has 25-200 clients

• Clients have $1 - 5 Million annual revenue

Firms are charging value-add bundled retainer fees for these services – $1,500 - $5,000 / month and beyond!

Most Common Services:

• Financial Statement

Preparation

• General Ledger/Trial

Balance

• Payroll Reporting

• Cash Flow Management

• Payroll Preparation

• Transaction Processing

(BPO)

• Virtual CFO ServicesMajority of Outsourced Accounting clients have between 5-25 employees

CPA Firm Client Accounting Services Profile


Client Expectations are Evolving

Digital CPA

Transactional

Workflow

Using technology to support transaction processing

Build digital workflow and standardization in processing

The operating model of theDIGITAL TRUSTED BUSINESS ADVISOR

It’s not just about technology!

It is also about your strategy!


The Pendulum is Swinging Back


Technology

Cloud Technology is Key


Growth of Cloud Computing

And Many Others

Small BusinessHas Moved to the Cloud

Network growth: >150% last year$150M recently

raised

QuickBooks® Online 500K users

Paychex Equity Investment

Efficiencies saving 90 minutes per employee per day

Serving over 10k firms and top US banks

$45M recently raised


Widespread Adoption: The Great Equalizer

Top 100 Top 500

Small Firms


Partnering for Success

120+ partners 75% of our customers integrate with 2+ partners

TIM

E &

EX

PEN

SEMAN

UFAC

TURI

NG

BUDGETING &

PLANNING

HR/PAYROLLSUBSCRIPTION

BILLING

PAYMEN

T

PRO

CESSIN

GAP A

UTO

MAT

IONDOCUMENT

MANAGEMENT

ASSET

MANAGEMENT

TAX MANAGEMENT

CR

MEDI &

ECOMM

ERCE / POS

CHECKS & SUPPLIES

PROJECT MANAGEMENT

INVENTORY

MANAGEMENT

http://ww2.termsync.com/

http://ww2.termsync.com/


Service Delivery Platform

The service delivery platform is a term used regularly in the “cloud-computing” world

• Defined as the available technology components and/or solutions that will be used in the client accounting service delivery model

For example: could include the following integrated business solutions

• Intacct Financials-on-demand

• Bill.com cash flow and bill management

• Paychex integrated payroll services

• XCM workflow management


KPI’sNumber of table turns

Food categories

Turnover of total room

Guest Counts (growth)

Per person Average

Controllable Income

Average Ticket Price

Food & Beverage Mix

Historical vs current

Total # of seats

Comps

Other MeasurementsPrime Costs

• COGS + total labor + ee benefits

Food & Beverage Mix

• Revenue 60/40 average• COGS 33% food; 25% bar

13 week periods

Labor

• Mgmt 4%; direct 14%; other 5%

EBITDA: 25-28%

Beyond Financials to Real Time Client Insight


Restaurant operators

Scrutinize food and beverage costs

margin by menu itemby location by server

Business actions that increase gross margins

Role-based dashboards

Management by KPI’s

Reporting Examples

Food Sales

Liquor Sales

Other Sales

Food Sales

Food Costs

Food Margins


Workflow


Begins With The Standardized Practice

Consistent/standard Chart of Accounts (COA) as one package price. Premium fees for a custom COA

Standardized services by industry vertical and by type of service

Standardized Internal Management Reports/Services

Procedures Manuals for each client

Service Order Requests for services outside of the engagement agreement – retainer always on account for these requests and for “concierge” services

Dedicated client-service staff to provide top client experience, while sheltering our production staff

Standardized workflow to deliver insight


Importance of Standardizing Workflows

•All deposits made and updated into Intacct•Client submits check requests/invoices into the Bill.com system by 5pm

Tues.

•Staff codes and enters everything •Manager reviews/approves and submits for payment or returns for correctionsWed.

•2nd batch of deposits made and updated into Intacct•Manager analyzes cash flow, payables, and deposits•Manager creates dashboard showing what to pay

Thurs.

American Institute of CPAs® 34#PSTech

Roles and Permissions

Create user profiles for client

Assign a role based on permissions

o Administrator

o Accountant

o Payer

o Approver

o Clerk

o Customized roles with over 30 options


Staff Permissions


User Roles and Permissions

36


Send bills into Bill.com

Emailo Customized Bill.com email

Faxo Choose your area code and

Bill.com assigns a fax number to the account

Upload

Inbox

37


Payables - Approval


Synchronize to General Ledger in the Cloud

Syncing Intacct

QuickBooks Desktop

QuickBooks Online

Netsuite

Xero

Import/Export

itduzzit.com

http://cloud.itduzzit.com/


Restaurant operators

Scrutinize food and beverage costs

margin by menu itemby location by server

Business actions that increase gross margins

Role-based dashboards

Management by KPI’s

Insight Flows to Real-Time Dashboards

Food Sales

Liquor Sales

Other Sales

Food Sales

Food Costs

Food Margins


WHAT are you providing?


Final Thoughts

Leverage the outsource demand

Build your right model with your right strategy

Increase your collaborative engagement with clients

Select and deploy the right cloud technology tools

Build your standardized workflow

Be prepared to delight your clients!


Upcoming Roadmap Workshop

August 11th & 12th

AICPA New York Office1211 Avenue of the Americas, 19th FloorNew York, NY 10036

@ThomasGawneCPA#DigitalCPA

Technology – the great enabler for virtual cfo & bpo services

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