Not Your Typical IT Guys

We are now just outside of 2 weeks away from the official enforcement date of the FTC Red Flag Rules. The major question of the day is, Does this effect CPA firms? And the answer is…wait for it… more than likely YES. Now that being said the AICPA has been working hard to get an exemption for CPA’s however, to date the FTC has offered no exemptions.

So question number two is, Why are CPA firms impacted? Per the regulations there are 2 groups that are impacted by the Red Flag Rules, Financial Institutions and Creditors. CPA’s are not Financial Institutions however most of them are Creditors.  The definition of a Creditor per the Red Flag Rule Regulation is, “a businesses or organizations that regularly provide goods or services first and allow customers to pay later.” As a rule this is most CPA firms, and likely many of your clients….

There are a number of resources available to help you and your firm address the Red Flag Rules:

FTC’s How to Guide

FTC’s Frequently Asked Questions

AICPA’s Information Technology Center

FTC’s Do-It Yourself Red Flag Rule Template

Please comment with any other good resources you know of to help everyone adopt these regulations.

Check back here as Nov 1 closes in and we will keep you posted on any updates that come up in the next couple weeks.

AICPA PCPS Firm Top Issues Survey results for 2009 were just released.  A returning item since 2005 is marketing and practice growth.  The question is, do firms really know the implications of practice growth and are they prepared to absorb the costs of an infrastructure that can support the growth??

CPA’s are smart so I believe the answer, “Yes.”  However, what I don’t think they know is what kind of support and cost is going to be required to expand the technical infrastructure to support their growth.  While they realize it is an aspect to consider I can’t imagine they know what it is really going to take.

Well, score another point for cloud computing folks.  You need scalability? For those that have already embraced the model it is a simple answer.  Not only do they know their systems can scale exponentially but they know exactly how much it is going to cost them to scale their technology, X people time Y costs per seat… voila!

Let’s expand, shall we??  Darren Root, in his recent blog post, pointed out very clearly that the costs to recruit and sign new clients are significantly higher than the costs to keep them. Cloud computing is the low hanging fruit for providing your clients the tools that make you irreplaceable to them.  Darren gave a great presentation at the AICPA TechPlus conference in which he shared how his firm has embraced a number of cloud providers to expand the services they are delivering to their clients. Services such as hosted accounting systems, Client Portals, and Secure Document Exchange are great ways to expand existing services and provide real value to your clients. Score another 1 for cloud computing.

OK, I will spare you the exhaustive commentary but take a look for yourself at the survey results.  There isn’t an item on the list that cloud computing can’t help with.

Technology isn’t the answer to your need, but SMART technology and service is absolutely the enabler.  Does your current service provider, in-house or consultant look at this stuff?  Are they helping you to support your firm’s top 5 issues?  They should be!