AICPA/CPA Canada Survey: Managing Data Tops List of 2013 Tech Initiatives

By Jason Bramwell

CPA Bruce Phillips isn't surprised in the least that managing and retaining data is the leading technology priority for North American accounting firms in 2013, according to a recent survey from the American Institute of CPAs (AICPA) and Chartered Professional Accountants of Canada (CPA Canada).
 
"Firms have been struggling with this for years," Phillips, managing member of Atlanta-based CPA practice Harshman Phillips & Co., told AccountingWEB. "We decided three or four years ago that we needed a different and better way to manage our data. So we decided to get rid of all our internal servers and moved all our client data and other applications to the Cloud."
 
Phillips, who was an early adopter of Cloud technology for accounting and other business systems, uses a Cloud-based data management system from Xero, an online accounting software provider in San Francisco.
 
"From a cost standpoint, using Cloud technology saves money," Phillips says. "From an access standpoint, with the appropriate permissions and security controls, we have the ability to share files with anybody, anywhere, at anytime. Using discs or paper, all of that is gone. None of our client data resides in our office. Our clients also have access to all the data, 24/7, from any device."
 
According to the 2013 North American Top Technology Initiatives Survey conducted by AICPA and CPA Canada, managing and retaining data topped the list of ten technology initiatives for accounting firms in the United States and Canada. The top ten priorities for each country are as follows:
 
United States
  1. Managing and retaining data
  2. Securing the IT environment
  3. Managing IT risks and compliance
  4. Ensuring privacy
  5. Managing system implementation
  6. Preventing and responding to computer fraud
  7. Enabling decision support and analytics
  8. Governing and managing IT investment and spending
  9. Leveraging emerging technologies
  10. Managing vendors and service providers
Canada
  1. Managing and retaining data
  2. Securing the IT environment
  3. Enabling decision support and analytics
  4. Managing IT risks and compliance
  5. Governing and managing IT investment and spending
  6. Ensuring privacy
  7. Managing system implementation
  8. Leveraging emerging technologies
  9. Preventing and responding to computer fraud
  10. Managing vendors and service providers
"The reason data management is so important now is firms have more and more data than they've ever had before," Mike Ritchie, director of product management for accounting, audit, and workflow solutions at Riverwoods, Illinoisbased software provider CCH, told AccountingWEB. "When you look back a whole bunch of years when tax returns were done manually, firms weren't capturing that data. But now every keystroke around tax, every scan, the audit processes, the financial data in the trial balances, all that data is being captured now because firms are using automated systems."
 
"As the importance of data management has grown, firms are working closely with clients to ensure that effective controls are implemented pertaining to the appropriateness of data management policies, practices, and procedures used by client organizations," Jeannette Koger, CPA, director of the AICPA information management and technology assurance division, states in the survey findings report. "Such controls are required to ensure that data management strategies effectively align with the fast-moving IT environment in which many organizations operate."
 
Managing the Wealth of Data
Data is increasing by an estimated 50 percent each year, from such sources as web and social media traffic, e-mails, voice mails, software, and sensors used in industrial processes, according to the report. 
 

Three Strategies for Managing Your Data

Mike Ritchie of CCH provides three tips on how small and midsized accounting firms can successfully manage their data.

1. Get your data accessible  but make sure it's secure. "If I'm a small accounting firm and I've got data on people's laptops, I've got paper, and I've got five or six different systems that I use, how do you make that data really accessible? If it's incomplete or if it's in the wrong place, then you're handcuffed. Make sure you get your clients' financial data and your firm's data into one place so you can work on it. But don't go so far as to make it insecure and available to everybody. You want to maintain that security."
 
2. Get the right tools: "Move all the data into one place. There are Cloud-based tools, with a low cost of entry, that aren't hard to learn. You can employ these tools once you get your data together."
 
3. Get training: "Get help. There are companies out there that specialize in training accounting firms on what to do with this data, how to manage it, what it means, and how you act on it. Get help with setting your system up correctly. We find that for every hour of training we do for a firm, it pays back ten times on efficiency. If you don't do this the right way, you're wasting your time."
 
A firm whose data management policies and procedures are insufficient or ineffective is exposed to the consequences of poor data management. Business decisions or client advice may be based on incomplete or inaccurate data. Data may be stored in outdated or incompatible formats for retrieval or improperly backed up, resulting in irrevocable loss of data.
 
"What we find at a lot of firms is that they've got data everywhere," Ritchie says. "They have tax data in a tax system. They have client financial data in a trial balance system. They have their staff data, firm operating data, and invoices in another system. What firms are seeing is, now that there's this proliferation of data and they have it all in separate tools, they can't get their hands around it."
 
"Advances in computer processing and IT have made it possible for public accounting firms, companies, businesses, government agencies, and other organizations to take a seeming jumble of data, quantify it, analyze it, and use it for a variety of purposes," the report states. "Companies are also able to make better-informed decisions more quickly about a range of issues, such as increasing efficiency, controlling costs, and improving the marketing and sales of products and services."
 
 
"What technology is doing is reducing the cost of doing business. It's also reducing the cost of collaboration between the accountant and the small business," Gurmeet Singh, director of product management for Mountain View, Californiabased accounting and financial software provider Intuit Inc., told AccountingWEB. "I don't think accountants want to be rocket scientists. So the technology and tools are important to help them not get bogged down by data."
 
Jamie Sutherland, president of US operations for Xero, says understanding your customer base and their needs and wants is important for setting them up with the right technology for data management.
 
"With a Cloud-based system, a client may be looking at information on an iPad while on the beach at the exact time the accounting professional is back in his or her office looking and talking about the same information," Sutherland told AccountingWEB. "That's a complete shift in the way things used to be, when firms were sending files back and forth, data was out of sync, and firms didn't have real-time information. We totally blew that up, and the accounting firms using Cloud technology are seeing more controls and visibility as well as being more efficient."
 
Staying on Top of Big Data
The term "big data" is defined by the AICPA as "data sets that grow so large that they are nearly impossible to work with using traditional database management tools, but yet offer a powerful tool when married with strategic use."
 
While companies and firms are finding many new opportunities in big data, they also face enormous challenges in managing the associated risks. According to the report, companies need to:
  • Develop plans and policies for accessing, using, and managing big data, 
  • Develop the necessary information systems and recruit people with the necessary experience and skills to manage big data, and
  • Determine how to make cost-effective investments in big data management.
"Otherwise, companies could be overwhelmed by big data. For example, data could accumulate in electronic silos within companies, clog up information systems, and be difficult to access," the report states.
 
Ritchie explains there are three steps accounting firms can take to prevent being bogged down by data: "First, take inventory of your data. Can we bring it together in one place? Can we get real information out of it in a timely manner?" he says. "Second, get the right tools in place. If a firm has data in multiple systems, there are tools that can pull the data out of these systems and consolidate it so the firm can manipulate it. Third, have the processes in place to manage the data. You don't want to fix it all and then have to start over and run the risk of putting data in the wrong places. You want to keep it up to date; you don't want the data to go stale."
 
CCH recently launched CCH Axcess, an all-in-one modular database that can consolidate data from multiple areas into one place.
 
"Firms have to be able to retrieve the data, they've got to be able to act on it, and they've got to be able to manage it. There's a huge efficiency suck if they can't manage the data they're getting," Ritchie concludes. "If you can get your hands around all the data you have, not only can you run your firm more efficiently, but you can provide better services to clients."
 
About the survey:
The 2013 North American Top Technology Initiatives Survey asked accounting professionals in the United States and Canada to prioritize their 2013 technology initiatives. 
 
Of the US survey participants, 36 percent are in public accounting; 36 percent in business and industry; and 28 percent in consulting, government, or not-for-profit or other organizations. Thirty-eight percent of US survey respondents are partners or executives, 22 percent are directors or vice presidents, 20 percent are managers, 8 percent are staff members, and 12 percent are in other positions.
 
Among the Canadian survey respondents, 25 percent work in public accounting, 40 percent in business and industry, 15 percent in government and the military, 10 percent in consulting and law, and 10 percent in the not-for-profit sector or other organizations. Most of the respondents are in management positions.
 
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