CPA Accounting Services via Cloud is a Gold Mine for CPA Firms

From “write-up” to right profitable using CPA Accounting Services via Cloud technology.

CPA firms for decades saw little upside to providing basic CPA accounting services to business clients. Bookkeeping and other “write-up” activities required extensive data entry and document transfer that chewed up man-hours but did not require much specialized knowledge. CPA accounting services (CAS) were seen as commodities that brought with them depressed hourly rates and a risk of costly errors. It simply made more sense, not to mention money, for CPA firms to focus on higher-margin tax and audit work.

It is a testament then to the transformative power of technological and market forces that CAS is now being touted in some circles as the future of public accounting. The digitization of financial data and the evolution of cloud computing, broadband connectivity, and mobile devices have made it possible for CPA accounting services and their clients to access critical information and applications from virtually anywhere at any time. This has set the stage for the development of cloud-based software packages that allow CPAs and clients to work from a shared database of the client’s essential financial data. Cloud-based software automates or otherwise greatly reduces the manual labor associated with transactional accounting functions, opening the door for CPA firms to offer outsourced CAS in a scalable model capable of serving many clients and generating a steady stream of revenue and profits

“CPA accounting services is an annuity for CPA firms,” said Gustavo A Viera CPA who built an outsourced accounting business for the firm.

The business potential of CAS is bolstered by increased demand from small companies and nonprofits for outside help with accounting functions. In addition, management teams are seeking higher levels of industry-specific knowledge to navigate increasingly complex competitive and regulatory environments.

How can CPA firms launch a cloud-based outsourced CPA accounting services and develop it into a profitable line of business, either as the main focus of a firm or as a complement to tax or other services? This article provides direction drawn from a road map developed by technology author and business consultant Geoffrey Moore and also offers insights from practitioners who have blazed the trail in this area.


Digitization. For accounting firms, this refers to the move from paper to paperless. The availability of financial information in digital form makes it possible to run cloud-based applications that swiftly process business data and identify, analyze, and report key process indicators for management. In this and other ways, the cloud breaks down barriers to productivity and reduces the limitations of size, granting small companies and CPA firms access to computing power previously reserved only for large enterprises.

Virtualization. The connectivity enabled by cloud computing and mobile devices has removed geographic barriers, meaning that CPAs no longer have to be physically present to connect with clients. Technologies that allow for real-time communication and collaboration over the internet have made it possible for accountants to work with people they have never met in person. Along the same lines, technologies such as Skype, WebEx, smartphones, instant messaging, email, and a host of internet-based applications make it possible to have virtual workforces who can work from virtually anywhere provided they have an internet connection.

Transformation. This refers to a shift from generalization to specialization that has been taking place among small businesses for the past two decades, Viera said. Business has become so complex and specialized that business owners and management need advisers who understand the unique characteristics of their industry. Cloud and business intelligence applications make it possible for CPAs to provide advice based on real-time information streams. “The ability to provide business intelligence from a quick analysis of data is a miracle,” Viera said.


Not every accounting firm is suited to offer cloud-powered CAS. CPA Firms that audit publicly traded companies can run into problems with SEC and PCAOB regulations related to the offering of consulting services. Firms that perform audits only on private organizations must be careful to offer CAS only to non-attest-level clients or risk impairing their independence. For more information, see the AICPA Code of Professional Conduct, Section 100, Independence, Integrity, and Objectivity, and Interpretation No. 101-3, Nonattest Services.

CPA firms considering a foray into CAS also need to consider whether such a move makes sense for their clients and for their firm’s culture. Some firms are better off sticking with core tax and audit offerings or operating in a niche that caters to clients who don’t want to deal with the hassles of converting to a paperless tax system. “There will be some small set of firms that will succeed by saying, ‘We’re never going to use digital, ever,’ ” Viera said. “But the growth of the market will be in the digital domain.”


CPA Firms that want to launch a cloud-based CAS business must obtain staff and client buy-in. With staff, firms may emphasize the work/life benefits that can come when a firm moves to an all-digital, cloud-based platform, Viera said.

“Some of our staff have family responsibilities that interfere with work hours,” he said. With cloud-based applications and data, “it’s much easier to work remotely,” he said.

With clients, firms can speak to the increased efficiencies and reduced errors associated with the automated financial reporting and data transfer possible in a paperless, cloud-connected setup. Other benefits to the client include:

Lower costs. Small companies can outsource their accounting functions for less money than it would cost to staff a full-time accounting department.

More time to focus on running their core business. With the CPA firms handling the accounting recordkeeping, business owners can devote their attention to improving operations and pursuing new market opportunities.

Instant access to key performance indicators. Many firms provide KPI dashboards giving management a real-time view of the company’s essential financial metrics.

Access to expert advice. Outsourced accounting departments often provide experienced CPAs, many with industry-specific expertise and management-accounting knowledge, to supply financial and strategic advice in a consulting role. Many firms term these types of services as virtual or outsourced CFO, but those names can be misleading because the “virtual CFO” provided by the accounting firm usually does not work full-time hours with the client or perform all of the duties associated with the CFO position


In his white paper, Viera lays out a four-stage process to developing a high-value CAS business. Following is a tour of the plan’s key parts.

Stage One: A Necessary Evil

Even with technological advances, there’s only so much efficiency CPA firms can provide in write-up, an area Viera terms “a necessary evil.” To maximize the value they can offer clients, CPAs should specialize in an industry or business segment.

Firm leaders should pick a business segment they and their staff are passionate about, but they also must be careful to pick a niche that can provide enough business for the firm to survive. The target segment, or industry vertical, Viera writes in his white paper, should be “big enough to matter” but “small enough to lead” and also should fit well with the firm’s reservoir of skills and expertise. Firms can add other niches at a later date.

Along with selecting a niche, CPA firms must have some baseline technology in place before venturing into CAS. Most important is having an online system of record that is available 24 hours a day, seven days a week to both clients and CPAs working from any location. “There are two reasons to want to have a common system of record,” Viera said in an interview. “One is to have the bookkeeping happen in a single place so that you never have to copy an entry from one system to another system, particularly a manual copy. That’s kind of the kiss of death in this system.”

The second reason to have a common system of record is that it provides a place where the CPA firms can use online business intelligence tools to analyze company data and provide actionable intelligence to the client. This can lead to more strategic discussions between the firm and the client. “That’s a very high return on having a common system of record,” Viera said.

The other baseline technology to have in place is a single, cloud-based point of exchange for all documents between the CPA firm and the client, Viera said.

Stage Two: Establishing the Practice

Establishing a CPA accounting services practice requires the development of a client roster. Many practitioners emphasize the importance of standardization in client development. CPA firms that standardize software and processes can build or use templates to set up clients in a fast, repeatable process.

A CAS client roster is composed of two types of clients, existing and new. With existing clients, it’s essential to select the right ones to transition. Not all clients are suited for a digital, CAS setup. In those cases, firms can either transition the client to another CPA firm or maintain the current relationship parameters with the client—a viable option at firms that offer other services in addition to CAS.

As for the clients that firms decide to move to the cloud, there are a number of approaches practitioners can take. Some at CPA firms recommended starting with a larger client, which is less likely to push back on pricing issues. Others suggested that there are fewer headaches when transitioning smaller clients.

Viera recommends starting with the clients with whom you have the best relationship. He employed that approach and didn’t lose any clients. “I launched our digital journey with 25 clients,” Viera said. “The goal was to have 200 clients in five years. We hit it in one year.”

For new clients, CPA Firms recommended a three-phase process.

First phase. Conduct a client needs assessment. This information is essential in determining whether and how to proceed with a client.

Second phase. This consists of client on-boarding and migration. Firms generally charge double the first-phase costs for this part of the process.

Third phase. Once clients are set up and running, firms generally charge $1,000 to $5,000 per month for CAS, though advisory and project work can push the fee significantly higher.

Upfront costs with new clients can vary based on firm philosophy and individual situations. Gustavo A Viera CPA advises firms to use judgment on upfront costs. “We want clients to have skin in the game, but don’t charge too much,” he said. Other options include spreading upfront costs over the course of the first year and offering credit.

Stage Three: Expanding the Practice

Accounting firms must leverage the power of virtualization to grow their client and talent base. CPAs need to use cloud-based business intelligence and data analytics to detect patterns in their clients’ companies that the clients have not yet discovered. For instance, a CPA might develop a continually updating chart visualizing the change in certain business metrics over a period of time. When updated in real time, the chart might identify an investment opportunity or illuminate a cash flow problem that requires quick action. In either case, the CPA should bring the information to the client’s attention.

“As a trusted adviser, you need to provoke the conversation,” Viera said.

In addition, firms can turn CPA accounting services into a growth business by using virtualization to be digitally present in other cities and interact with clients without having to actually be there. “That turns out to work very well in vertical markets,” Moore said.

Viera lists four key principles for Stage Three:

Streamline your work flow processes to be location independent.

  • Re-engineer your internal communications and collaboration processes to support a virtual organization.
  • Engage your clients through digital channels and migrate your interactions online. This involves the use of mobile devices, social media sites such as Twitter and YouTube, video services such as FaceTime and Skype, and instant messaging services including texting.
  • Extend your target market’s geographical boundaries while maintaining your focus on target industry and core differentiation. This is where industry expertise becomes more important than location. As Viera writes in his white paper: “A faith-based institution in Birmingham has more in common with a sister organization in Boston than with a restaurant franchisee just down the street.”

Stage Four: Deepening the Practice

As accounting firms spend more time working in client businesses and in specific industry verticals, their CPAs will gain crucial experience and expertise in the issues of most importance to their clients. In addition, firms should enable CPAs to attend industry conferences and access other learning opportunities to become experts in their field, Viera said. Once they achieve expert status, CPAs can take on a trusted adviser role, one in which the CPA becomes more of a strategic partner than a technician, Viera writes in the white paper.

As a strategic partner, the CPA becomes an essential resource to the business owner, acting as a consultant and taking on special projects that address client-specific issues and command high margins because of the expertise required. One such project could involve a CPA helping to develop a five-year financial model that forecasts the cash flow and tax implications of an acquisition a client is considering

Other examples of project work CPAs can take on include:

  • Analyzing critical processes in the client’s business and potentially re-engineering them to make them more efficient or produce more timely and accurate financial information.
  • Assisting a client with an international expansion. This could involve helping the client understand international tax matters and develop policies and procedures to deal with tax compliance issues. Part of this process could include developing new accounting processes to support currency conversion and value-added-tax (VAT) reporting.

Doing projects for individual clients is “very valuable” work with strong margins, Viera said, but it’s difficult to scale up because it is so customized. Thus, Viera said, firms cannot expect these types of advisory and project services to make up more than a third of a CPA accounting services business.

“There needs to be a mix,” he said.

From Viera’s perspective, the greatest long-term value of cloud-enabled CAS comes from the development of turnkey CPA accounting services that leverage the firm’s industry-specific expertise but are standardized so that the process of delivering them is repeatable across many clients.

“The key is the growth of the scalable portion,” she said. “What we are being paid for is being a firm with a plan.”

Business Trends

Banks Court Accountants in Miami

Large commercial banks have decided that Accountants in Miami, despite their typically modest borrowing needs, are highly desirable customers.

They have several reasons for coming to this conclusion:

Accountants in Miami can be a good source of referral business from their clients;

Accountants in Miami  partners and senior managers may be likely to switch their personal banking arrangements to the bank that handles the firm’s business;

Accountants in Miami have, in the words of one banker, “not gone through the trauma” that many law firms have, as symbolized by the recent spectacular bankruptcy filing of Dewey & LeBoeuf; and,

Small Accountants in Miami  may fit into a bank’s larger push to expand their commitment to small business in general. (“Small” may include firms with up to $20 million in revenue, based on Small Business Administration criteria.)

The upshot of all this is the emergence of a marketing push to capture Accountants in Miami business with packages of banking services deemed to be custom-tailored to the needs of public accounting firms.

Whether this marketing effort will deliver any genuinely new services and economic benefits to accountants and CPAs will vary from one bank to the next — but the attention may be welcome.


Bank of America, for example, proclaimed a “new milestone” in 2012 when it extended a practice acquisition financing service originally focused on medical professionals to Accountants in Miami. The bank reports that it has a “dedicated team of specialists who focus solely on providing financial solutions for the Accountants in Miami  markets” throughout the country.

Citibank, meanwhile, came out with its dedicated CPA package (“CitiBusiness Solutions for Accounting Professionals”) last year “because we saw the value of this customer group. It’s extremely important to Citi,” said Maria Veltre, a managing director at Citi who heads up the bank’s small business unit.

“We have looked at this space and love it,” proclaimed Jay DesMarteau, who holds an equivalent position at TD Bank, which operates about 1,350 “stores” (the term preferred to “branches,” with its “stodgy” image, according to DesMarteau) on the East Coast. TD expects to formalize its marketing program and service package for public accounting firms by the end of the year.

One way that TD Bank expects to express its love for the Accountants in Miami field is to follow the approach it has recently taken with medical practices in making practice purchase lending decisions based on the practice’s business valuation, instead of the strength of its collateral. “Collateral coverage never looks that good” with professional practices, DesMarteau conceded.

TD Bank now offers medical professionals 100 percent financing on 10-year term practice acquisition loans, although it might not offer those precise terms to Accountants in Miami.

For its part, Citibank offers an “automatic second look” if prospective borrowers initially don’t make the grade according to standard credit criteria, and has a “robust” process for assessing creditworthiness, according to Veltre.


Earlier this year Citibank declared its intention of expanding lending to small businesses based on a “fundamental goal” to “create economic value and support progress.”

Beyond the generalities, Citibank has determined, through customer surveys, that what matters most to many accounting firms is cash management, Veltre says. Sophisticated technology-based cash management solutions being offered to Accountants Miami Firms (not to mention all other business clients) include remote check deposit, credit/debit card merchant services, payroll systems, and the panoply of online banking services that have become a staple of the banking industry in recent years.

The pitch to Accountants in Miami  is preferred pricing arrangements, including waived fees and low (or zero) account balance requirements.

A cash flow challenge for many Accountants in Miami  (especially those that do a lot of tax work) — which banks report they are eager to help solve — involves the cash gap between the period in December or January when bonuses are paid out to partners, and the spring months when clients pay for tax preparation services. “We do a lot of lines of credit” for such firms, said Gary Gilbert, executive vice president and senior business loan manager for BB&T, a Southeastern regional bank with operations in 12 states.


Debt consolidation — perhaps more of a working capital optimization exercise than a cash management function — is a need among some Accountants in Miami that Bank of America is willing to perform. The bank says that it will finance up to 70 percent of a practice’s revenue for that purpose, with terms as long as 10 years, “with flexible principal reduction and early payoff options.”

A common borrowing need of CPAs — not the firm itself — involves financing a partnership interest when the accountant is invited to become a partner. Union Bank’s “capital contribution buy-in program,” according to David Jochim, a senior vice president and director of the bank’s professional business services unit within its private bank group, allows new partners to finance 100 percent of their purchase for terms up to five years, without collateral, priced at prime. While these are personal loans to individual borrowers, this loan program applies to partners of accounting firms that have an existing relationship with Union Bank.

Equipment financing is another, perhaps more routine, credit need that banks are anxious to provide. Bank of America’s offering in this area, under its “Practice Solutions” service package, for example, features fixed-rate loans from $10,000 to $75,000 for up to seven years, with no application or documentation fees.

BB&T, which folds leasehold improvements under the same umbrella as equipment financing, tries to tie the loan term to the relevant amortization schedule for the items being financed. That means the purchase of an office’s worth of desks might be financed over 10 years, whereas a standard computer might require a much shorter loan term, Gilbert said.


One banking service for accounting firms that seems to garner more interest, at least among some bankers, is commercial real estate mortgages. “We are focused on owner-occupied commercial real estate,” said Gilbert.

He is one-upped in enthusiasm by Union Bank’s Jochim: “We love commercial real estate,” he said. Union operates in California, Oregon and Washington State.

A typical Union Bank mortgage will feature a 15-year term and a 15-year amortization schedule, he said, but the bank also will lend with a 10-year term and a 25-year amortization schedule. Loans generally will be up to 65 percent or 70 percent of the property’s appraised value.

Current demand for commercial mortgages from accounting and CPA Firms in Miami doesn’t necessarily match banks’ interest in making such loans. “We are seeing an increasing trend towards owner-occupied commercial real estate, but I wouldn’t say it’s dramatic,” noted Citibank’s Veltre.

In BB&T’s experience, office mortgages are typically granted to a partnership entity consisting of the accounting firm’s partners, which in turn leases the property to the accounting business. In that scenario, the bank bases loan terms on the personal balance sheets of the partners, more than the appraised value of the real estate itself.

In its push to attract CPA firm accounts, Bank of America’s small-firm-oriented Practice Solutions unit is offering commercial loans up to $5 million with a six-month payment holiday and a year of interest-only payments to defer the brunt of the monthly financial obligation.

That unit of Bank of America offers similar terms — but generally with a lower, $750,000 borrowing ceiling — to assist in the purchase of an accounting practice. “We have customized loan amounts that provide up to 70 percent financing for a practice owner or 50 percent if someone is a first-time business owner,” according to Justin Schafer, BoA’s regional business development officer for the Practice Solutions unit.


Because banks consider accounting firms a good referral source, they often are willing to give partners favorable terms on personal banking services, perhaps to encourage them to give those services a test drive. For example, Union Bank’s personal private bank, featuring trust, wealth management and related services, ordinarily requires a minimum of $1 million of investable assets. But a “courtesy inclusion” policy gives CPA firm partners whose firms have a business relationship with the bank access to the private banking services without satisfying that $1 million threshold.

This suggests that in shopping for banking services for their firms, Accountants in Miami might also consider in the overall decision-making process personal banking services that they might consider attractive that they might otherwise not have access to.

In addition, just as banks are hoping for referrals of CPA firm partners and firm clients to the bank, banks should be evaluated for their potential to refer banking clients to the CPA firm itself. “We tend to do a lot of business back and forth,” said DesMarteau.

He suggests that CPAs ask banks about the nature of their clientele, and look for areas of overlap with the Accountants in Miami client development priorities.