Returning to Our Roots:

A Strategic Shift in the Accounting Profession

by Donny C. Shimamoto, CPA/CITP, CGMA

Returning to Our Roots:

A Strategic Shift in the Accounting Profession
by Donny C. Shimamoto, CPA/CITP, CGMA
A fundamental shift is occurring in the accounting profession. In fact its been occurring for the last
few years as accounting firms have been returning to their roots and re-embracing bookkeeping as a
major service line. Even top tier CPA firms have launched client accounting practices recognizing the
value of providing controllership and chief financial officer (CFO) services for their clients. This is a
strategic shift in the accounting profession that provides great opportunities for accountants and their
clients alike.

Technology thenand technology now

A major impetus for the return to popularity of bookkeeping services is the maturity of cloud-based
accounting software and its facilitation of the easier exchange of data between accountants and
their clients. This is an interesting reversal, as it was technology that originally affected the decline
of bookkeeping services. Technologies like QuickBooks, Peachtree Accounting, and higher end
accounting solutions made it easier for business owners to record and manage their own financial
recordsbookkeepers. Technology has now come full circle and re-enabled the efficient delivery of
bookkeeping services by accounting firms.
Its not just easier bookkeeping that cloud technologies are enabling, but a more collaborative and
engaged relationship between accountant and client. Cloud-based accounting software combines
seamlessly with an ecosystem of supplementary software like, payroll, expense reporting, tax
compliance, time and attendance, business planning, project management, and many more. All this
creates a powerful suite of business solutions for small and mid-sized businesses that previously was
only available to large companies. For accountants, this back-office solution ecosystem can potentially
integrate back into the core accounting system, providing the accountant with a real-time view into a
clients operations.

Be proactive today to enable a better tomorrow

Accountants often find themselves with heavy burdens at the end of the year. This is because
traditional accounting software doesnt have all the embedded knowledge and expertise required to
address all of the financial reporting and tax implications a business owner may face. In addition, users
often arent well trained in the use of the software, resulting in workarounds and inadvertent errors
in the data.

Once the end of the year, or even the end of the month, is passed and closed, the accountant is then
faced with the issue of working with and reconciling all the transactions that were recorded. At this
point, all outcomes are set and the accountant is limited in their ability to correct issues and help the
business owner achieve their financial goals. This backwood-looking and compliance-focused service
model needs to be a thing of the past if accountants are to position themselves as trusted business
advisors for their clients. You cant advise to change history; you can advise to create a better future.
That is why the value proposition of client accounting services over the course of the year, rather than
after year end, is so compelling. Accountants can now be more collaborative and engaged with their
clients, and more importantly be more proactive in helping their clients deal with accounting (and even
general business) issues before or as they occur, rather than after theyve already materialized and
cant be changed.

More Opportunities to Return to Our Roots

Other traditional services that accountants previously offered should be revisited to see if they
present an opportunity for the accountant to engage their client more closely and consistently.
The technology ecosystem around cloud-based accounting software continues to mature and
accountants can leverage this maturity to increase the number of services provided for their clients.
Consider the following types of software categories that are already posed for adoption:
Payroll and Payroll Tax Compliance Historically these services were not very attractive to
accountants because they were cumbersome to provide and carried a high potential liability exposure.
This resulted in payroll often being referred out to third-party service providers that the client or
accountant then had to manage. Cloud-based payroll solutions have enabled the data entry burden
to be shouldered by the client, while enabling the accountant to oversee the work being done by the
third-party provider virtually. Some payroll service providers also take responsibility and liability for
accuracy of tax filings, virtually eliminating the liability exposure for the accountant.
Sales Tax Compliance Most accounting solutions require that the accountant or business owner
configure the tax rates and manage the jurisdictions that sales tax is being collected for. Sales tax
returns are often prepared by printing reports or exporting data from the accounting solution, then
entering them onto the appropriate tax forms for each jurisdiction. Instead of doing this manually,
sales tax compliance solutions can be integrated into the accounting system, with the service provider
providing real-time sales tax rate updates and helping the accountant to complete and submit the
necessary forms electronically. With automated sales tax compliance solutions, much of the burden
and potential liability for the accountant can be mitigated.

Electronic Expense Reporting Electronic expense reporting is often built into the accounting
software itself, but can also be available as a standalone solution for more complex workflow and
management needs. Common features include allowing a user to use their phone to take pictures
of receipts and code transactions, submit them for approval, and then syncing and recording the
approved transactions into the accounting solution. Since expenses incurred by employees often dont
follow the internal control structure that business-driven purchases follow for authorizations and
recordation, expense reporting solutions allow the accountant to help clients reduce the risk of errors
and policy non-compliance.
Business Planning and Performance Management An accountant may be consulted at the start of a
business or when a business is seeking financing to develop the financial aspects of a business plan.
Oftentimes, this means the accountant is providing assurance to a lender. However, once the plan is
complete, it then falls upon the business owner to keep their company in sync with the plan or adjust
the plan as the business environment changes. Business planning and performance management
software enables data to be drawn out directly from the accounting solution and used in conjunction
with assumptions and estimates to better monitor the business performance against its plan.
Previously, this was done in spreadsheets and updating it was a pain. With integration between cloud
and on-premise accounting solutions enabling the data exchange, software in this area enables the
accountant to really take on the role of trusted business advisor and without the data entry burden.
All of these solutions provide opportunities for accountants to return to our roots and engage clients
on a more real-time basis rather than just once a year. They also allow the accountant to be more
proactive over the course of the year, identifying and fixing issues before they are immutable in the
year-end financial reports of the company.

Shifting the Accountant-Client Relationship Paradigm

Sarbanes-Oxley and other auditing scandals in the recent past resulted in an increased focus on an
accountants independence. This forced many accountants to distance themselves from their clients
in an effort regain the trust of the pubic. This however ended up being a disservice to many small and
mid-size businesses who really need the guidance that their accountant can provide in managing and
growing their business.
As we seek to reengage our clients in a balanced relationship that enables clients to obtain the advice
they need without impairing our objectivity, returning to our roots will be a key foundation from which
to build a trusted business advisor relationship with our clients.

About the Author

Donny Shimamoto, CPA/CITP, CGMA, is the founder of IntrapriseTechKnowlogies LLC, a CPA
firm focused on organizational development and advisory services for the middle market and
nonprofits. An active CPA, Certified Information Technology Professional (CITP), and Chartered
Global Management Accountant (CGMA), Donny helps many organizations by bridging accounting
and IT to strengthen organizational governance and risk management, improve business processes
through IT, and increase the effectiveness of decision making through business intelligence. Donny
also serves as an outsourced IT Audit Partner and advisor for smaller regional/local firms and
internal audit departments who lack in-house IT management and IT audit expertise, helping with
IT risk assessments and enabling increased staff proficiency with IT tools supporting internal and
client engagements.
Donny was recognized from 2012 2014 as one of the Top Thought Leaders in Public Accounting
by CPA Practice Advisor and was named to Accounting Todays Top 100 Most Influential People list
in 2013 and 2014. Donny is the immediate past chair of the AICPAs Information Management and
Technology Assurance Executive Committee, and is a former member of its Governing Council and
Assurance Services Executive Committee (ASEC). He received the 2009-2010 Presidents Award
from the Hawaii Society of CPAs, was named to CPA Practice Advisors 40 Under 40 list in 2007,
2009, and 2014.