The Climate is Right for Cloud-Based Accounting Services

Source: Journal of Accountancy

Traditionally, client accounting services were viewed as commodities that were much less profitable than tax and audit services. But the cloud is changing all that. A combination of paperless technology, cloud-based connectivity that removes geographic barriers, and a trend away from generalization and toward specialization, has set the stage for the growth of client accounting service (CAS) practices.

Cloud-powered CAS isn't right for every firm. It depends on your clients and your firm's culture. Also, firms that audit public companies may not be able to offer it. But under the right circumstances, it can generate a steady stream of work and high profit margins.

One of the keys to making CAS work is specialization in a particular industry or business segment (so long as the industry or segment can provide enough business for the firm to survive). Access to industry expertise is one of the biggest benefits to clients, allowing the CPA firm to act as an outsourced accounting department or virtual CFO. Other benefits include lower costs, more time to devote to core business, and real-time access to key performance indicators.

Cloud-powered CAS also benefits a CPA firm's staff, making it easier to work remotely. And automation of the financial reporting and data transfer functions increases efficiency and reduces errors.

The article provides a step-by-step “roadmap” for developing a high-value CAS business.

For the complete article, read “From ‘write-up' to right profitable.”

From Journal of Accountancy, American Institute of Certified Public Accountants, April 2013, http://www.journalofaccountancy.com/Issues/2013/Apr.