Pump Up Your Value with Technology 

    by Carl Peterson, CPA 

    Value is a hot topic for practitioners in small firms, not only the value you deliver to clients but also how you value your firm now and when you’re ready to retire down the road.  As someone who recently merged my six-person firm into a larger one when I came on board at the AICPA, I can tell you one important lesson I learned: the technology level of your firm is part of your value and small firms have a competitive advantage when they make the best use of technological innovations.  Here are some of the many ways we can use technology to our benefit.
    • Technology can help small firms continue to be nimble.  Generally, small firms can easily identify strengths and weaknesses and seize opportunities to address them.  A small management structure can make significant and timely decisions that will provide immediate benefits for their practice.  That’s why small firms are in a great position to adapt and implement technological innovations efficiently and effectively.  When my firm committed to a software suite that integrated our time and billing software with our tax and other software systems, it helped to streamline our processes and cut costs.  We had great software already, but it was not all tightly integrated.  Due to our small size, we were able to easily make the switch, which cut our overhead and made us more efficient.
    • Technology can give you an edge in practice development.  In my firm, as part of our ongoing commitment to technology upgrades, we moved to cloud applications, offering client portals that made it easier for clients to interact with us and for us to manage our work.  When we met with new clients or talked to existing ones about additional engagements, we were able to tell a very appealing story about our responsiveness and capabilities, which can set a small firm apart in the marketplace.
    • Technology can help attract and retain young professionals. Smart, young professionals are accustomed to cutting edge tools.  And while small firms may not do a lot of hiring, it’s especially important for them to attract the best possible people to round out their team.  Many freshly minted CPAs ask about a firm’s technology and processes in their interviews, and outdated tools and resources are not appealing in their desired career paths.  As a result, a small firm with a strong technology base can have a powerful advantage in hiring and recruiting top staff members. Technology investments can also foster better work life balance, which is a significant concern for many young CPAs.  And cutting edge mobile computing tools help firms maintain efficiency by making the best use of virtual or part-time staff.
    • Technology matters to clients.  Successful clients are making the most of the latest technologies themselves, and they want to partner with firms that have a similar level of sophistication.  At the same time, some of the major selling points for small firms are their personalized service, responsiveness and the strong and lasting relationships they build with clients.  All of those assets are enhanced by technologies that improve processes, making it easier to meet deadlines and spend time deepening client ties.  
    • Technology makes a difference in M&A.  My own experience is a case in point.  When it was time for our merger, our technology-enabled systems were definitely a selling point and a source of value in making the deal.  In their book, CPA Firm Mergers & Acquisitions: How to Buy a Firm, How to Sell a Firm, and How to Make the Best Deal, Joel Sinkin and Terrence Putney describe working with a client who was considering two different acquisition candidates.  One had good metrics and staff, but it was behind in technology innovations, was not paperless and did not have a client portal.  The second had poor metrics and realization, but it had a very good foundation in technology.  The client liked the second firm because improving its metrics was more appealing than spending thousands of dollars to enhance technology.

    Overall, our size allowed my firm to make a smooth switch to new technology.  That, in turn, made us more efficient, increased our productivity and staff flexibility, and enhanced our responsiveness to our clients.  And it also made our firm more appealing in our recent merger.  Given the advantages technology can offer, it’s an outlay that will provide a great return on your investment.

    For technology resources designed for small firms, turn to the PCPS Leveraging Technology webpage.  The featured tools include access to the white papers “10 Steps to a Digital Practice in the Cloud” and “Transforming Your Client Accounting Services,” as well as exclusive PCPS member resources like Quantum of Paperless: A Partner’s Guide to Accounting Firm Optimization, by Roman Kepczyk, CPA.CITP, as well as monthly columns in the “IT Corner with Roman.”

    --Carl Peterson, CPA, AICPA Vice President, Small Firm Interests

    If you have questions for Carl, contact him directly at 651-252-4618 or at cpeterson@aicpa.org




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