Outsourcing on the Web

With all the buzz around Web-based software, more accounting firms are migrating from a client-server to an on-demand, or software-as-a-service, infrastructure. CPAs report that providing finance and accounting outsourcing services boosts sales 75 percent to 100 percent, cuts the implementation time of new clients in half, and opens the doors to new markets.
And the clients benefit, too. A group of International House of Pancakes franchisees, for example, saw a 30 percent productivity increase and a five percent profit hike when they handed over back-office operations to a local CPA firm that uses Web-based ERP and accounting software from Intacct Corporation.

For the past five years, Intacct has delivered financial, supply chain, professional services automation, and business analytics software as an on-demand service to some 2,000 companies, including more than 150 accounting firms. We have seen first-hand the upside that Web-based accounting systems bring to CPA firms.

No hardware, software, or networking equipment to acquire, maintain and upgrade. Instead, CPAs pay a monthly, usage-based subscription fee to access GL, AP, AR, Employee Expenses, Payroll, Time & Billing, Order Entry, and other financial applications on the Internet.

Information is stored at IBM data centers to ensure customers enjoy the same security and performance as Fortune 100 companies. With IT services managed professionally, accounting firms are no longer required to hire throngs of tech-support staff.

Accounting software delivered as a service also creates a more flexible and customer-focused practice. The Web browser's ubiquity allows CPAs to collaborate with clients over the Internet-anywhere and anytime.
"The days of telling customers 'I'll have to get back to you on that' are quickly disappearing," says Richard Beil, president of Accounting Outsource, Inc. (AOi), a Maryland-based CPA firm that uses Intacct's ERP On Demand application suite to provide outsourced accounting services to its restaurant franchises.

Much of the success early adopters of Web-based accounting outsourcing services have reaped comes from the ability to provide clients with true cost savings and business efficiencies.

Cost and Time Savings
Before signing with AOi, the IHOP franchisees dedicated 24 hours a week to paying bills and balancing books. Now they spend one or two hours a week. Instead, the business owners send all sales receipts and invoices to AOi, which enters them into the system and makes sure the books are in order.

Profits
Because the data is available for review instantly, AOi generates weekly financial reports. With the up-to-date information, restaurant owners can react to sudden cost increases or sales drops. When one normally busy IHOP restaurant experienced slower sales, the owner moved personnel to the other side of town where lines were meandering around the block. The result: a five percent increase in profits because of better financial insight.

Faster Audits
Normally, it'd take the IHOP owners three to four days to collect all the documentation for an outside audit, which would last for at least another four to five days. With adjustments and corrections, AOi and its clients would spend about two weeks preparing and assisting in audits. But with a Web-based solution, AOi simply gives the auditors online access to the books. The auditors find not only all the statements, but the source documentation, which is scanned and attached to each transaction.

SS&G Financial Services, a Top 100 accounting firm based in Ohio, reported 75 percent growth in its outsourcing business when back-end operations could be managed remotely for multi-unit restaurant franchises, such as Papa John's Pizza, Damon's Grill, Qdoba Mexican Grill and Romano's Macaroni Grill. With real-time visibility into each restaurant, SS&G also acts as a virtual CFO, providing the franchisees with valuable consulting services.

In Virginia, Langan Associates sets up new accounts in days, rather than spending months installing and configuring hardware and software. The country's largest accounting firm to exclusively serve the not-for-profit industry simply clones charts of accounts, migrates data, and provides online access when national associations add regional chapters. "The CFOs we have worked with tell us data migration from a client-server to a Web-based system is the smoothest financial systems conversion they've ever experienced," says Nat Bartholomew, partner at Langan Associates. SR