CPAs rethink traditional business model as demand for non-attest service offerings grow

By Jeff Onesto

Much has been written about the downside of outsourcing Finance & Accounting (F&A). However, there is upside that is profitable and rapidly growing.
In the large enterprise space many companies routinely outsource various F&A processes. For example, Microsoft outsources both purchasing and accounts payable globally to Accenture, which has successfully helped Microsoft drive down operating costs by an estimated 35 percent. For those not familiar with Accenture, they got their start as the technology advisory line of the public accounting giant Arthur Andersen. It all began when audit client General Electric asked them to help automate and improve their payroll processes.
Analysts predict annual contract volume to double this year, according to the Finance & Accounting Outsourcing (FAO) 2010 Annual Report. Most interesting is the forecasted increase in mid-market multi-process agreements where both F&A and HR processes are bundled together. For those not familiar with Business Process Outsourcing (BPO) marketplace, F&A offerings typically involve industry specific process knowledge as opposed to HR offerings such as payroll and benefits administration that instead focus more on technology. By bundling the two offerings together, interestingly enough, you appear to get an ideal blend of both process and technology. Coincidence, I think not!
After obtaining my CPA, the thought of another busy season didn’t bode well for me. I decided to accept an offer as a management consultant with then Price Waterhouse. Over the period of almost five years I got the opportunity to witness firsthand how properly aligned processes and technology can transform the most backward organizations.
Looking back over the last ten years both selling and delivering enterprise business applications, I can confidently say the transition for me was quite natural. Matter of fact, many mid-market CPA firms such as BKD, Moss Adams, Crowe Horwath, Hein & Associates LLC, and Frank, Rimerman + Co. LLC have made similar transitions with the addition of technology advisory service lines. Last year while many firms were struggling to grow traditional audit services, the demand for non-audit services kept many firms afloat. During 2009, one of the worst recessions in recent history, Deloitte Touche Tohmatsu (DTT) global revenues declined 5 percent, while the advisory line grew by 7.3 percent, according to Public Accounting Report.
So, you like the idea of double digit growth but you are bit hesitant to start? My first suggestion would be walk, don’t run. As a product manager of a software-as-a-service (SaaS) accounting application, we have many CPA partners. Most of the CPA partners start by using our technology platform behind the scenes to enhance existing outsourcing offerings such as equity administration, payroll and benefits administration, and tax compliance. It doesn’t take them long to experience increased profitability, accuracy, and efficiency.
At that point, many partners begin to leverage their experience to drive new customer growth and eventually add a separate advisory service line such as INSIDE Public Accounting “2009 Best of the Best” winner Hein & Associates, which this year with NetSuite announced the following, NetSuite and Hein Partner to provide expert accounting and regulatory compliance solutions from the cloud.”
About the author:

Jeff Onesto, CPA, is director of product management for a Software-as-a-Service (SaaS) accounting solution provider. His prior experience consists of Big Six consulting, enterprise software sales and delivery, product marketing, and bringing Web 2.0 solutions to the mid-market.

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Monday reminded auditors that they should continue adhering to the board’s existing standards when considering an organization’s ability to operate as a...
Exclusive: Lois Lerner breaks silenceIn her first press interview since the IRS Tea Party targeting scandal broke 16 months ago, ex-agency official Lois Lerner told Politico that employers won’t hire her, she’s...
Cybersecurity is no longer the domain of an organization's IT staff. It's moved to the boardroom, and in a big way. Accountants and financial managers may have been thinking it's just the province of the tech...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.