By LNS Solutions | 5 min read
The chaos of tax season has passed, and you’re finally able to catch your breath. How did your firm manage the stress? Did you notice any workflows or systems in your firm that didn’t perform at the standards you’d need to truly thrive?
Though we hope you’re enjoying some well-deserved downtime, this period is also a good time to take stock of your technology and take note of what processes and workflows worked and which didn’t, so you can start planning for greater efficiency and less stress in the next tax season.
Based on our decades of experience helping guide the IT strategy at accounting firms, here are some areas that we feel firms should focus on.
The incentive for modernizing your firm with cloud-based technology is simple and compelling. Accounting is already hard; coordinating communication, gathering invoices, and settling tax issues is complicated and tedious, and your technology shouldn’t add to that complexity.
Adopting cloud technology streamlines all those processes by automatically updating your line of business software to the latest version, centralizing workflows into platforms, and improving the security of your technology. An overwhelming 91% of accounting professionals state that these new technologies enable them to focus on clients or enhance overall productivity, according to a study by Sage.
Let’s look at each of those in greater depth.
When your software systems are complex, with each tool and application requiring a separate workflow, it slows down your organization and introduces significant room for error. It’s easy to get caught up in the mix.
Adopting cloud-based accounting solutions allows you to standardize workflows and even automate routine tasks like data entry, invoice processing, and reporting, bringing consistency and uniformity to your processes.
The cloud connects various functions within the firm—such as bookkeeping, tax preparation, and auditing—into a cohesive workflow, minimizing the risk of errors. Powerful automation features can also reduce the burden on your CPAs and help them focus on more complex and value-added services, such as strategic advisory and financial planning. This also helps in complying with the FTC Safeguards rule, which mandates financial institutions to implement secure and standardized procedures.
According to a McKinsey report, office workers spend 1.8 hours every day—9.3 hours per week, on average—searching for and gathering information. In the middle of the tax season, with deadlines looming, you don’t want your employees scrambling for data.
Centralizing your data on a cloud platform makes it easier to manage, handle, and retrieve data. This improves your firm’s processes by providing a single point of contact for all data and ensures that your accountants have access to the most up-to-date and accurate information, which eliminates confusion and discrepancies that arise from multiple versions of data being stored across different systems.
With centralized data storage, data management and security also become a great deal simpler, as it’s easier to implement and maintain robust security measures when data is housed in a single, controlled environment, rather than securing each PC individually.
There's no debate as to how we work has changed dramatically over the past few years, especially with the rise of remote working. As an accounting firm, if you harness remote working properly, you can satisfy your staff’s need for work–life balance, attract top talent, and empower staff to collaborate more effectively.
But to securely embrace mobility, your team needs hassle-free and secure access to data and documents no matter where they are.
With the right tools and a tech setup that fully bolsters remote working, your firm can unlock seamless cooperation by enabling multiple users to work on the same documents and financial records simultaneously. In doing so, removing friction and bottlenecks hinders productivity. Whether working with clients or within their teams, better coordination helps everywhere. According to Wolters Kluwer, there is a reduction in the number that are being prepared without in-office contact with taxpayers.
Today, CPAs are increasingly recognized as strategic advisors, a role that extends far beyond traditional accounting and tax services. With advanced financial tools and analytics, businesses look to CPAs to guide their business strategies.
To meet this new role, CPA firms are elevating their services and focusing on providing a superior customer experience that distinguishes them from the competition.
Be it real-time updates or seamless communication, clients today expect personalized services and quicker service delivery than in the past. By leaning on centralized data and the latest generation of analytics tools, CPAs can gain deeper insights into their clients’ financial situations, allowing for more personalized services, as CPAs can tailor their advice and strategies to the specific needs and goals of each client.
Another example of how the cloud can help improve the customer experience is client portals. Allow a client to log into their secure online portal to view the status of their tax return preparation or audit process. They can see which documents have been reviewed, which are pending, and any immediate actions they need to take. This transparency keeps clients informed and engaged while facilitating quick, hassle-free communication.
As a whole, modernization with the cloud improves service delivery, turnaround times, and response times across the board.
As an accounting firm, you deal with some of your client’s most sensitive data. This makes your firm an alluring target for cyberattacks. According to Accounting Today, since the COVID-19 pandemic, accounting firms have seen a 300% increase in cyberattacks as an industry. Protecting your firm’s and clients’ sensitive data is critical. Be it the trust of your clients, stakeholders, or regulatory concerns.
The first step in safeguarding your network is to harden its exterior, or “perimeter,” which means the defenses that protect people inside your organization from external threats.
Cybercriminals tend to target CPA firms using a few different methods. The first is with phishing emails designed to steal credentials or deliver malware, exploiting employees’ access to sensitive financial data. The second is to attempt to gain entry via unsecured remote access points that allow unauthorized users to infiltrate the network.
To harden those defenses, you should focus on building out and configuring robust firewalls, intrusion detection systems, and multifactor authentication (MFA). A secure network perimeter is the foundation of a strong cybersecurity strategy.
Internal threats are some of the most challenging tasks to tackle in cybersecurity. Whether malicious or unintentional, the risk posed by your own staff (intentionally or not) is immense. That’s why it’s crucial to implement internet information controls to monitor and regulate data flow within your network.
Easy steps you can take to improve internal security include setting up user permissions. Well-defined roles and permissions for each user in your network help safeguard sensitive information to authorized personnel. It’s a good idea to conduct an annual audit to identify and address vulnerabilities, stay compliant with the latest regulatory updates, and quickly respond to any security incidents.
Going deeper into internal security, you can consider adding internal controls, such as mandatory two-factor authentication (2FA), for access to client financial data. You can also segment your network and workflows to ensure that no single employee has control over all aspects of a critical financial transaction.
While companies, industries, and employees may differ in their approaches to cybersecurity, one constant remains: Employees are the weakest link in any cybersecurity chain. For CPA firms, this vulnerability is especially critical, given the sensitive financial data they handle.
Even the best technology cannot protect your firm if your employees are not well trained in cybersecurity practices. To mitigate this risk, fostering a security-centric culture from the top down is essential. Conduct regular training sessions to educate your staff on the latest threats and best practices for preventing breaches.
Despite your best efforts, data breaches and malware attacks can still occur, posing significant risks to CPA firms that handle sensitive financial information. Be prepared by implementing robust data backup strategies tailored to your firm’s unique needs. There are a range of solutions that can cater specifically to CPA firms that offer automated backup options. Have a question? Reach out to our team for some help!
For decades, we’ve helped Tampa’s accounting firms take control of their IT and face cybercriminals with confidence. If you’re struggling with security concerns or the questions around your cyber insurance, contact us any time at (813) 393-1626 or info@lnssolutions.com. We look forward to speaking with you!