CPA Firm Practice Management Applications
The CPA Firm Management Association recently conducted its second comprehensive technology survey tailored specifically to member firms with the goal of identifying the applications, products and processes utilized by peers. Where possible, the survey attempted to identify which applications firms are moving to in the cloud compared to traditionally on-premise managed solutions. The survey was conducted in December 2017 to determine what information technology firms would be utilizing in 2018 and compared to the results from 2016 where appropriate. This survey further highlighted the unique nature of CPAFMA member firms which tend to be medium and larger sized firms. 174 CPAFMA members participated, 88% of which had 10 or more personnel and 40% (70 firms) were multi-office. The survey is broken into three sections: CPA Technology, CPA Practice Management, and CPA Tax and Audit Applications and Technology. Below you will find the results from the second part of the survey on CPA Firm Practice management Applications:
CPA Practice Applications: Below we summarize the administrative applications which CPAFMA peer firms utilize to run their internal operations. The number of firms selecting either on-premise or cloud applications have been identified where possible, but point out a continued transition towards cloud adoption either for the entire firm or individual applications.
- Practice Management: 76 firms (44% of respondents) utilized CCH’s Practice Management, of which 34 were in the cloud either privately or through their Axcess Suite. Thomson Reuters had 58 peer firms using their Practice CS application, of which 39 firms were in the hosted in a private cloud or Thomson’s Virtual Office. OfficeTools (rebranding as WorkSpace) also made a good showing as it was selected by 34 respondents, evenly split between hosted and on-premise servers.
- Payroll: For producing internal firm payrolls, ADP swapped the lead position with Paychex, which was the top selected provider in 2016. 33 respondents utilized ADP in 2018 followed by 23 Paychex firms. Intuit continued to be in the number three slot with 17 firms using Intuit Online and 8 utilizing QuickBooks internally. The remaining 53 respondents utilized a wide variety of solutions with a majority of all firms selecting the SaaS/Externally Hosted version, rather than processing with on-premise applications.
- CPE: Practice Management applications are once again the tool of choice for CPE Tracking with 30 responding firms utilizing CCH and 21 utilizing Thomson Reuters’ tools, of which 16 utilized Thomson Learning/Virtual Office and five used their on-premise Practice CS. Not surprising was that a significant number of firms (26) continued to utilize Excel spreadsheets for tracking CPE internally.
- HR: HR Management continues to be topic area where there was a wide variety of applications with no one product being dominant. ADP’s HRIS tied with Halogen with each vendor having seven firms responding they used their application, followed by four firms that utilized Bamboo and four firms that utilize Paychex. No other application received more than three responses showing there is no consensus on what applications firms use to manage their internal HR needs.
- Intranet: Microsoft SharePoint continued to be the most dominant intranet tool used by firms (20 firms with the majority on-premise) but web-based WordPress (eight firms) narrowed the gap from the 2016 survey. Our consulting with CPAs has found that many firms still utilize an administrative drive or their document management application, which was not reflected in the survey question.
- CRM Tools: Practice Management continued to be the most dominant tool utilized for Customer Relationship Management with 53 firms using CCH and seven using Thomson Reuters, the same two products and standing as the 2016 survey. SalesForce was next with three users and no other application had more than two responses.
- Website Maintenance: While a large number of respondents (45 firms) maintained their own websites with local providers, CPA Site Solutions led the 2018 survey respondents with 13 firms, followed by CCH SiteBuilder utilized by 12 firms, and Thomson Web Builder CS utilized by seven firms.
- Internal Accounting: QuickBooks continues to be the dominant accounting product utilized by participating firms with 50 members utilizing the On-Premise product and 45 members utilizing Online/Cloud hosted versions. Sage/Peachtree was next with 11 firms followed by Intacct with five firms and Thomson CS with four firms.
- Website Payment Systems: A new category this year was the website payment systems which allow clients to pay their invoice directly themselves via credit card without firm administration being involved. Thirteen firms had adopted such a system with the top three selections being QuickFee (six firms), CPACharge (three firms) and PayPal (two firms), so look to ask peer administrators about their experience with these systems in upcoming meetings.
- Accounts Payable Management: QuickBooks was once again the dominant application used for managing payables by 78 respondents (44 on premise users and 34 in the cloud), followed by cloud-based Bill.com with 21 users. The third and fourth most utilized products were Sage/Peachtree with six firms and Thomson Reuters CS with three firms.
- Expense Reports: Practice Management was the most often cited application for capturing expense reports with eight firms responding, followed by seven firms that utilized Excel. The top three cloud based expense products were Expensify (three firms), Tallie (two firms), and Concur (two firms).
- Scheduling: Excel continues to be the dominant tool utilized for scheduling staff with 46 firms reporting they do so. This was followed by firms using Practice Management scheduling components [CCH (27) and Thomson (10)]. ProStaff was utilized by nine member firms, which placed it in the lead of the dedicated internal products followed by Outlook with seven firms and XCM Schedule with six firms.
Email/Groupware: Microsoft continues to be the dominant accounting firm groupware product utilized by 128 firms. The 2018 survey found 89 firms using Cloud/Hosted Exchange versus 39 firms still maintaining their own servers. This is a stark contrast from 2016 where the numbers were reversed with 79 firms managing their own servers compared to 37 that had transitioned to the cloud. Google Gmail was the only other product listed with three firms. This year’s survey also asked if firms set file size limitations on email mailbox sizes and 25 firms (23% of respondents) limited the file size to 1Gb. The majority (34%) of respondents allowed for 2Gb-5Gb mailbox size and a surprising 29% (31 firms) had no limits set. The remaining 14% of respondents (15 firms) set limits between 6Gb and 50Gb per user, pointing to a loosening of limits since the 2016 survey.
Collaboration/Instant Messaging: Microsoft’s Skype for Business (formerly Lync and Office Communicator) was the dominant application in this space with 36 member firms selecting it (with the majority-24 firms, using it in the cloud). The three Google groupware users from the previous question also utilized Google Plus for their Instant Messaging. The survey also identified four firms utilizing Microsoft Teams, which is a product to watch as it becomes an important part of Office365.
Video Calling: 52 peer firms were using video calling through Microsoft Skype for Business, again being the dominant product from the 2016 survey which falls in line with the findings of Groupware usage as it is integrated into Microsoft Office. This was followed by five firms using GoToMeeting, three firms on FaceTime, and three on Cisco products.
Document Management (DM): Of the firms that answered the DM question, 33 utilized CCH’s Document Management and 32 utilized Thomson products (19 GoFileRoom/13 File Cabinet Solution). Doc-It made significant inroads in this year’s survey with 7 member firms utilizing the application. Overall, the majority of firms utilizing document management, utilized applications hosted in the cloud.
Cloud Future: The survey’s final question asked when the respondent believed that the majority of CPA firms will run entirely in the cloud with no local servers. A surprising 40% estimated it would happen between 3 and five years, another 40% thought it would be between five and ten years and 8% believed it would take 10 years or longer. 14% estimated that it would be less than three years, which we would agree with by quoting Bill Gates when he was Microsoft’s CEO:
“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction! “
About the Author
Roman H. Kepczyk, CPA.CITP is the Director of Consulting for Xcentric, LLC and works exclusively with accounting firms to implement today’s leading best practices and technologies incorporating Lean Six Sigma methodologies to optimize firm production workflows. Roman is also the author of “Quantum of Paperless: A Partner’s Guide to Accounting Firm Optimization” which includes the results of the 2018 CPAFMA IT Benchmark Survey.