Smart Tech Tips from Top CPA Firms

Laughing businesswoman talking on the phone in office in front of four monitors5 key questions, including what to tell recruits.

By Marc Rosenberg
The Rosenberg Practice Management Library

I have a keen interest and understanding of how managing partners perform their jobs. Their duties encompass a long list of critically important management functions. Certainly, one of these is to ensure that technology has an optimal impact on the firm’s success, profitability and efficiency.

MORE: 15 Amazing Organizational Tactics to Manage a CPA Firm | Why Governing by Partner Ownership Is Bound to Fail | 6 Ways to Retain NextGen Staff | How to Develop a Truly Progressive NextGen Culture | The Top 5 Concerns of Great Managing Partners | Partners: When To Speak Up and When To Shut Up
GoProCPA.comExclusively for PRO Members. Log in here or upgrade to PRO today.

This can be quite challenging because, unlike most MP duties, managing the technology function is a highly technical skill that most MPs don’t have.

Truth be known, neither do I. So, we need to be smart. We need to know what we don’t know and rely on experts, both inside and outside of firms, to guide us.

So, I surveyed great managing partners from firms across the country and asked them what they do, at the highest level, to stay on top of technology and use it to make their firms great.

The firm sizes included in our survey:

  • 21 percent of firms had annual revenue greater than $20 million
  • 36 percent were $10 million to $20 million
  • 43 percent were $5 million to $10 million

As the MP, what do you do to ensure that technology has the most optimal impact on your firm's success, profitability and efficiency?

In a word, collaborate. Most MPs do not have a strong IT background. As the saying goes, “You gotta know what you don’t know.” MPs frequently collaborate with IT experts, both within and outside of their firms. The most common forms of collaboration:

  • Work closely with and listen carefully to our IT director
  • Attend industry meetings to collaborate with leaders from other firms
  • Regularly meet with outside IT consultants
  • Provide/push for adequate IT budget

Noteworthy responses by just one to three firms:

  • Engage the staff on new ideas where they see technology helping our firm
  • Ensure our IT director meets with other CPA firm IT directors

What has your firm done so far to address blockchain, data analytics and AI?

“We tend to overestimate the effect of a technology change in the short run and underestimate the effect in the long run.”

This is known as Amara’s Law and it is quite apropos for what’s going on in the CPA firm industry. The strong consensus of MPs is that today and for the next few years, the hype of the new technologies greatly exceeds the extent that typical local CPA firms have access to them. Indeed, roughly half of our participants see the full impact of these advanced technologies hitting typical local firms in five to 10 years and half see it in two to five years.

These were common responses:

  • Not much; waiting; seems nothing works with the software our clients use
  • Lack of enough sophistication of our client base or simply not applicable to them
  • Avoid spending money like “drunken sailors;” ROI always needs to be evaluated
  • We’re relying on vendors to provide the next steps

How do you involve your IT director in the firm's management?

A mixed response. Most of the firms over $10 million have a high-level, internal IT director who actively participates in all important management meetings and contributes significantly to the firm’s strategic planning. Many smaller firms feel they aren’t large enough to justify having a high-level IT director.

  • Several firms have a firm administrator/COO who supervises the IT director.
  • Many firms that rely primarily on outside IT consultants instead of an internal person consult with them on high-level decisions.
  • When he/she speaks, we listen.

In the past 2-3 years, what new things has your firm implemented in the IT area?

  • The cloud. Either an increase in the total use of the cloud or upgrading use of the cloud.
  • Increasing security. Examples: strengthening firewalls and dual factor authentication. One firm said they convene a mandatory web training session on security. Another said they increased their cyberinsurance coverage.

Noteworthy remarks made by just one to three firms:

  • Paperless workflow
  • Created a short video to train people on new software
  • Created a ticketing system for all IT issues to build a database of issues occurring
  • Replaced all our video technology with Skype rooms
  • More use of scanning
  • Moving away from phones with handsets to computers and mobile devices

What do you tell recruits about how cool your technology is?

For many years now, CPA firms have been dedicating an enormous amount of resources into how to better attract and retain staff. Because the strong use of technology is high on candidates’ lists of desired traits of employers, it makes sense that IT play an important role in firms’ recruiting process.

We had one very insightful and somewhat contrarian view on this question. “What we see in young people isn’t a love of technology by young staff. We see in them a desire to stay constantly connected combined with a general technology naivete. The difference matters. We don’t tell young people our technology is cool. Instead, we tell them that if they have a problem, we will solve it. If that problem is working from home so they can spend less time at the office, we can help them. We must make our staff’s work-life balance better and reduce the friction of getting their work out the door while keeping systems secure and available.”

These are the things mentioned most often by MPs that their firms stress in recruiting staff:

  • Great support for working remotely
  • We don’t just talk about technology, we demo it; we show them what we are doing

Leave a Reply