James Bourke

The Move to the Cloud

A CPA firm perspective.

May 23, 2011
by James Bourke, CPA.CITP


As I travel the country, visiting CPA firms and speaking at various conferences and seminars, one thing is extremely evident … everyone has heard about the cloud computing "revolution." Now, taking that awareness to the next level — migration and implementation — is very often the challenge that has held many back.

Not to oversimplify the concept, but cloud computing is the new way to do business in our profession. There is absolutely nothing mystical or overly complicated about this model. Technology has and continues to change the way we function within our practices. Think about the changes that we have witnessed over the past 15 years — e-mailing, document management, electronic filing, dual monitors, the scanning of source documents, the proliferation of mobile computing technologies and use of smaller, more powerful handheld devices, as well as the use of social networking as a new way to interact with prospective and existing clients and employees, and other professionals.

Welcome to the cloud!

There are currently a number of cloud solutions on the marketplace today that focus specifically on the needs of CPAs and CPA firms. These solutions cover internal CPA firm specific applications as well as those that allow us to collaborate with our clients.

You'll see a number of vendors mentioned throughout this article. All too often articles make reference to technology and vendors without any specific identification of vendors in this space. The purpose of mentioning a specific vendor in this article is to allow you, as the reader, to make the final connection and provide additional resources on where to begin your research and the vendor that best fits your needs.

Let's take a high-level approach and view some of the steps that a CPA firm should take when going from "legacy" systems and applications to those found in the cloud.

How Much Bandwidth Should You Have?

As important as Internet connectivity may be for receiving and sending e-mails, such connectivity becomes "mission critical" when dealing with cloud-based systems and applications that are an integral part of your practice.

My philosophy is that you need to move from a "garden hose" to a "fire hose" and that every effort should be made to obtain the largest amount of bandwidth affordable.

As more and more firms move their applications to the cloud, bandwidth needs to be evaluated continually. In addition, educate your provider about the significant uptick in usage during the traditional busy season.

It is recommended not to lock into any long-term bandwidth contracts, as technological advancements continue to allow the providers to offer more for less.  That said, my experience has shown that you or your firm will need to be the one[s] to initiate the inquiry with the vendor, as the bandwidth vendors generally don't call to notify customers when new pricing arrangements exist for a larger pipe.

While on the subject of bandwidth, this may be the appropriate time to address the use of streaming media sites such as YouTube, Pandora, ESPN.com and others that stream large amounts of data to end users. Many firms, in lieu of blocking such sites, have implemented Internet acceptable use policies (IAUPs). Policies such as these define acceptable and unacceptable use of your CPA firm's bandwidth. A combination of IAUP use with the blocking of a minimal number of sites is recommended.

Which Area to Target First?

Many of the applications used in the CPA industry are ideal candidates to migrate to the cloud. Tax-preparation applications are the easiest and best target to test the cloud model.

Tax applications generally require frequent updates because of continuing tax law changes. The cloud model allows these vendors to make updates across their entire platform, leaving the CPAs firms to do little or nothing at all. The cloud model also allows staff to work on tax returns anytime/anywhere. With firms striving to enhance a work-life balance and cater to the desires of younger staff to work differently than generations before them, the cloud model for tax preparation can be a huge first step for your firm and also make a significant impact on overall staff and firm performance.

Another area, if not number one to move, it would be an extremely close second.  That area is content or document management.

I sometimes joke that the traditional CPA firm is actually in the file storage and retention business. It amazes me that so many of us just can't let go of the customary, in-house file storage methods.

Taking in-house file storage to the cloud and migrating to a content or document management solution can have a significant impact on a practice. The ability to search for key terms or issues across every client and every file stored within each client, coupled with the ability to better secure and protect confidential and personal information are two major benefits realized by the firm on the move of this area to the to the cloud.

Once tax and content management solutions have been migrated, it would then be time to explore other practice areas. Vendors are now starting to become more plentiful in areas such as:

Outside of the industry-specific applications and systems mentioned above, don't forget about migration of other solutions that are commonly used across many industries. Some good candidates for migration to the cloud would include e-mail solutions such as Microsoft Exchange, Office, SharePoint and more.

Microsoft has made and continues to make significant investments in cloud computing. Microsoft has put together some great content that describes the many benefits of this model and how their products are a perfect fit.

Outside of the accounting-industry specific and non-specific applications, the other areas that benefit from the cloud model are those applications in which we collaborate with our clients.

There are a handful of vendors in this area that do collaboration and do it well!

Intaact, with their Intaact Accountant Edition clearly has an understanding of the way accountants do business and the way we can add value by collaborating with our clients.

Bill.com is another vendor that allows CPAs to collaborate with their clients thereby creating significant value and lasting relationships. Their solution allows for online bill payment and a streamlined approval process between you and your clients. In addition, the end result can seamlessly integrate data into your existing accounting system.

More specific information on the above two solutions, as well as others that are part of the solutions offered through the AICPA's Trusted Business Advisor program can be found here.

Will You Decrease Your Overall Technology Cost by Moving to the Cloud?

I will argue no!

In my experience, the migration to the cloud simply results in a shift in buckets of where the dollars are spent, resulting in no material decrease in overall spending.

For example, migration to the cloud model generally results in lower spending in the area of in-house infrastructure (servers, backup devices, etc.), while at the same time firms will spend more on areas such as vendor storage and space allocation fees, bandwidth costs, etc.

There are many ways to get started with the cloud-computing model and once you start, you'll realize that there are significantly more benefits than can be described within this article.

For additional resources on cloud computing, check out:

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James C. Bourke, CPA.CITP.CFF, is a partner at WithumSmith+Brown where he is director of Firm Technology. He is a past president of the New Jersey Society of CPA’s and currently serves on AICPA Council and the Chair of the AICPA CITP Credential Committee. He has been continually named by Accounting Today as one of the Top 100 Most Influential People in the Profession.