TechTimes CPAConnections
News From Your Association Leaders
Fall 2019
Former CPAConnect member makes the jump to CPAmerica coin and has a unique perspective on the process In February 2019, member firm Grooms & Harkins, P.C. (Grooms & Harkins), of Casper, Wyoming, officially joined the ranks of CPAmerica. However, the firm is rather unique. You will likely remember t hem as a longter m member of CPACon nec t . We spoke to Managing Nicholas Grooms Pa r t ner, Nicholas Grooms, of Grooms & Harkins to find out more about the move. We asked Grooms if he could tell us about his firm’s transition from CPAConnect to becoming a member of CPAmerica. Groom started, “It’s been an interesting transition for us because we felt so comfortable in CPAConnect. But at the same time, because of the relationship that exists between the two different organizations, the transition was seamless. Knowing Alan Deichler, Grace Horvath and D’Yan Davis at CPAmerica made it very easy for us during this time to go from one group to the next. So in some ways it felt the same, other
than that there were different people at the meetings. The way the transition happened was another reason we were so happy with our membership in CPAConnect.
there were some metrics (revenue, size of firm, that sort of thing) for membership in CPAmerica. When we first joined CPAConnect, we set those metrics as lofty goals that we wanted to achieve, all with the caveat that we were very happy in CPAConnect. We wanted to reach those goals and we didn’t know if that would mean we would like moving to CPAmerica, but we liked being eligible to join. Alan started talking to us and said that CPAmerica saw some things in our firm that he thought might be mutually beneficial to both CPAmerica and our firm and asked if we would give the idea of joining CPAmerica some thought.”
“When the founders of our firm, Ted Grooms and Chuck Harkins, started with CPAConnect, we can go back and see a distinct point on the timeline of our firm when things started to change for us for the better, whether it was growth or positive changes in the way that we did business. It was always something that the founders felt was an investment that we got a lot of return on and because of that, we actively participated in CPAConnect. As we continued through our membership and time passed, Alan Deichler started to notice that we were a firm that was growing fairly well, in the context of being a firm in Casper, Wyoming.”
His firm pondered this point. Grooms went on to say, “But we were happy with CPAConnect. Then we talked again at the next CPAConnect Roundtable and we were invited to come to the CPAmerica Leading Partners Retreat. The thing we found there that made us decide to go ahead and apply for membership was seeing a larger group of firms that were similar to ours in the sense of growth and transitions within their firms.”
Although Grooms said his firm was always aware of CPAmerica, they did not have a real relationship with any firm in CPAmerica. “Being isolated here in Wyoming was a big part of that,” said Grooms, “But back in the day, we knew
“We are going through unique changes; See Grooms & Harkins, continued on page 2
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CPAConnect Forums, continued from front page members, all in a secure environment. As we made the move to the online forum format, accidental sharing of information will no longer be an issue. Further, prominently on the forum page as well as a required acceptance of our privacy policy upon login. The CPAConnect forums have been carefully divided into various areas of interest for members. There are forums pertaining to the topics of Tax; Firm Administration/HR; A&A; Practice Management; the CPAConnect Advisory Committee; and one for more casual and informal conversations between members, the Member Discussions forum. Once you are logged in, you can click on any area to then see the various topics being discussed, ordered from newest to oldest posts. Go ahead and click on a topic to see the thread
Grooms then spoke about how long this took from concept to reality. He said, “CPAmerica was knocking on our door about three years ago, but it took two CPAConnect Roundtables. During the first roundtable, Alan kind of put the bug in our ear and during the second one, our firm was thinking about making the switch, so we went ahead and did a visit and then it took one Leading Partners Retreat in Tucson and I was sold. We immediately applied after that visit.”
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Although it hasn’t been very long since the firm joined CPAmerica, Grooms still felt that they have benefitted so far and said, “I think it has changed a little bit of the mentality for our future planning. It has brought a level to us of a challenge and maybe lighting those fires up a little bit more - the ones where our firm aligns with much bigger firms and with other firms that are extremely high performing. Also, getting some ideas from other firms that have already done a transition similar to ours.”
If you haven’t seen or registered to join the CPAConnect Forums yet, it’s easy. Go to the CPAConnect website (www.cpaconnect.com) and login at the top of the page. From there, hover over the Services tab and scroll down and click on CPAConnect Forums. There at the center of the page is a link to the forums which you can click to set up your account. If you have trouble signing in to either the CPAConnect webpage or CPAConnect Forums, please email Network Administrator, Heather Cleamons, at: hclemons@cpamerica.org for help.
The future is looking good for Grooms and Harkins. Grooms elaborated, “I hope that we see continued growth of the firm, both in revenue and Grooms & Harkins, P.C.is headquartered in profitability, of course, but also within Casper, Wyoming our staff size. We would like to see some growth there, and also the successful completion of a transition from founding shareholders to the next generation of shareholders. That would be something that I’d really like to see for the future of Grooms & Harkins.”
Grooms & Harkins, continued from front page
we are transitioning from the actual founders to the next generation of ownership. One founder just retired in May and our other founder is in a short window. We saw that CPAmerica had many resources to help us go through our transition. At the retreat, we saw a larger population of firms that had already been through this, some several times. That was a very big selling point, along with having many resources for helping us with our organizational structure and staffing.” Grooms said, “We love CPAConnect; it is extremely varied in its breath from sole practitioners to multi-partner firms, but CPAmerica has multi-owner firms across the board. Also, at the Leading Partners Retreat, we met many firms that had commonalities. However, I would be lying if I said there wasn’t hesitation to join CPAmerica for a couple reasons; one, we would now be the smallest fish in a very big pond. Also, we formed some really deep relationships with other firms in CPAConnect and this made us hesitate joining CPAmerica.” We asked Grooms what the final reason was for making the change to CPAmerica. He said, “We saw that we were at a point in time in our firm where we were looking ahead strategic
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planning-wise and our vision of where we wanted to move towards mirrored the profile of firms within CPAmerica. So we wanted to surround ourselves with firms that were either trying to do that as well or that had already walked that journey.”
As far as the relationship with CPAmerica, Grooms said, “I hope that we see the development of some deeper personal relationships with people within the other firms, and I hope we can grow to be at least a break-even user and facilitator of that. We understand right now we will be a net user of resources, but we would like to see that ledger start to creep back towards a break-even point. This is a big transition for us. We went from figuratively being the big man on campus and now we’re definitely the freshman trying to find out where his next class meets.” “When we started to draw the outline of the firm that we wanted to work and grow towards being, we felt that firm would be a firm that was in CPAmerica. We wanted to surround ourselves with those firms so that we could learn from them. We also wanted to jump off from such a wonderful relationship that we had with CPAConnect. We owe a great deal of the firm’s success to our association with CPAConnect,” Grooms added. “I really would like to emphasize the help of the staff of CPAmerica in helping us consider this transition. That was a really big deal, too. We very much like the model and it’s obvious that CPAmerica is an association of high-performing firms and individuals we would like to associate with,” finished Grooms.
Technology Overview with Randy Johnston:
Protect Your Firm by Being Proactive on Artificial Intelligence In the next five years, we will need to take our firms through a technology transition unlike anything that has come before. While you may believe that the transition from DOS to Windows, the arrival of the Internet, or the use of cloud technology were big things, the use of artificial intelligence (AI), machine learning (ML) and other emerging technologies, such as robotic process automation (RPA), will deeply change the practice of accounting. How can you help keep your firm on the right track? It certainly won’t be done by doing the same old thing, but the risk won’t be mitigated by jumping to new technology too early, either. CPAmerica has been proactively scheduling CPE courses to help you investigate emerging technology options at regional meetings and in technology briefing calls and through the Innovative Technology Committee. However, we each may discover different technologies, have different client needs, and utilize different strategies for our firms. Remember that you are still well-served by having a strategic plan and tactical objectives for the firm, which are then incorporated into a technology strategic and tactical plan. We still must get day-today work done in accounting, payables, tax, audit and other core services. Each business area and application has developments in progress that will apply AI, ML and RPA. The key question you should ask is, “When does my area of responsibility need to apply the emerging technology?”
What are the top AI and automation opportunities?
W herever there are a lot of transactions or data, there is an opportunity to automate. If you use online accounting software, you have already seen the opportunity to reduce the amount of effort needed to use bank or credit card feeds to capture all transactional data. Some of you are using expense management software to capture transactions and reduce the effort to manage expense reporting. These simple examples leverage the benefits of centralized cloud computing. Over time, computing power has gone from centralized to distributed and back to centralized again and is preparing to shift back to more distributed capabilities. The new wave of distributed computing is a result of widespread use of mobile computing power and from the reduced cost of graphics processors that can accelerate ML and AI. Recognition capabilities, commonly referred to as optical character recognition (OCR), have continued to improve, but adding AI, ML and other techniques improves accuracy. Having a local dedicated graphics processor in your laptop or desktop can speed up AI and ML. If a document is presented in paper form, the accuracy of translating the image’s numbers and words continues to improve, approaching 100 percent. Of course, it is better to capture the data in the original format, which means we will download the transactions from a bank or
from an accounting software system. A rule to apply is that if an accountant is keying data, there is a broken process somewhere and your team should not be keying data at any level. We have seen and experienced the first wave of computer automation with document management, expense management, and accounts payable management tools like Doc.It, Concur and Altec DocLink. While some of these products have been around for nearly 10 years, their capabilities were originally built with manual forms and computing power, not with AI and other advanced techniques. New generation tools like Receipt Bank Extract, Zoho Expense and Bill.com are leveraging emerging technolog y to improve their capabilities and recognition rates. Consider what happens if we can ingest a large amount of data for a tax return or an audit (or perhaps even all transactions) to look for irregularities. W hat happens if all, or at least most, business transactions can be accurately captured and classified? Both functions are happening now with first generation AI products such as Inflo and MindBridge Ai. The algorithms in use are improving in accuracy as more data is processed, and the rules in the algorithms have been improved. Mainstream and startup vendors are beginning to sell these capabilities. Imagine what will happen if we can apply blockchain techniques to ensure that all recorded transactions are immutable and can’t be changed. We are seeing this type of product with tools like Auditchain, which is also leveraging XBRL digital business reporting.
What are some potential tools to use today?
Multiple publishers are marketing products today, claiming they have these problems solved. While their techniques are beginning to work, don’t expect perfect results. Examples
See Tech Overview, continued on page 4
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Member Spotlight Please feel free to welcome your fellow members to our association with an email or call.
edonovan@cpaconnect.com
Improving Through Sharing.
The Yribarren Group, CPAs
Robert V. Ramirez CPA, PLLC
Howard & Company, CPAs, P.A.
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Kaczynski & Associates, Ltd.
Tech Overview, continued from page 3 of products that are working for audit include Wolters Kluwer Audit Accelerator and TeamMate Analytics; MindBridge is making progress on ingesting and classifying a large amount of data, and new audit tools are being promoted by the competitors of AuditFile, MyWorkPapers and the AICPA’s OnPoint PCR and Dynamic Audit Solution.
And we are not done yet
What can you do now? Recognize that if you keep your technology current, vendors will make new offerings available to plug into your technology infrastructure. Consider services offered by your firm today and ones you’d like to offer in the future. Create an innovation lab—or sandbox—that can be used for testing new applications and techniques. Listen to your clients’ needs carefully while you are trying to assemble an offering. Test the offering with a few trusted clients and expand the offering into more of your base. Remember, you don’t want to give away the efficiencies gained by reducing fees or prices. Over time, poor competitors are likely to compete on price, but initially you should compete on value. Use the extra time made available by the efficiencies of the application(s) to provide a higher level of service, perform more business development, reduce the workload of your team, or allocate the time to other worthwhile projects in your firm. Expect that some of the applications will not work out as you expect and act quickly
to set these options aside. You may want to hold your work for deployment later, once the quality of the products improves or becomes more affordable. Remember to package service offerings as a product and have marketing documentation and procedures to support the offering. Revise the procedures and offering frequently until you have it finely honed to fit your client base. There is broad fear of missing out in our profession, and vendors are selling many partially-baked offerings that aren’t really what they advertise. Ask questions such as, “Do they work sufficiently well today to be useful?” “Are they affordable?” And “Do clients or our firm have a better experience while using them?” If the answers are yes, you can innovate with the cutting-edge products today and be ready for the emerging technologies of tomorrow. Randy Johnston is a shareholder in K2 Enterprises LLC and ow ner of Net work Management Group Inc. Concepts for this article were extracted from the Emerging Technology session of the K2 Technology Conferences and from Johnston’s own experience. Contact him at 620-664-6000 or randyj@ nmgi.com.
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