Transforming Client Accounting Blog

James C. Bourke CPA.CITP on Workflow Automation and Data Security

Comments on 2011 AICPA Top Technology Initiatives Survey

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Several Ways to Protect Your Firm and Your Clients from A/P Fraud using Cloud Computing

Some firms are using cloud computing to offer clients new consulting models. Is this the future of the CPA profession?

According to the 2010 Report to the Nations on Occupational Fraud & Abuse from the Association of Certified Fraud Examiners (ACFE), organizations around the world lose an estimated five percent of their annual revenues to fraud. To that end, it's not surprising there have been so many recently published internal fraud-related articles from well-know resources such as AccountingWeb, CPA Success, and CPA Insider.

Has internal fraud become more commonplace for your clients? Has it simply being talked about more openly through social media channels and with the mainstream media?

In a recent interview, Jason Blumer, from Blumer and Associates, suggests small- to mid-size firms leverage the cloud, or web-based solutions, to help mitigate internal fraud with and for their clients. "Small businesses — those who don't have, or can't afford it — are disproportionately affected by fraud and lack the processes in place to prevent fraud," he said. "Preventing fraud on the front end is far less expensive than detection on the back end."

In a recent CPA2Biz webcast, featuring Jason Blumer and co-host Jeff Schultz from Bill.com along with a video clip from Bob Harris, several tips were shared on ways in which a firm can leverage a cloud-based bill pay solution to help reduce fraud within its clients' workplace, including:

• Establishing prevention procedures: Be aware. Identify key areas where your firm is most vulnerable and know who is accountable for each area. Determine the types of fraud that may occur and how they would likely be concealed. Then establish internal controls to keep these possibilities from becoming realities.
• Going paperless. By preventing "lost" bills and invoices, you reduce the risk of manipulation and information theft, while maintaining an audit trail of access.
• Enforcing separation of duties & payment control: Clearly define user access to the data, ensuring one single user does not authorize, process, and record financial transactions within the business. For example, an employee who enters bills into the accounting package should not have the ability to authorize payments for those bills. By segmenting role-based controls, you make sure that no one person has access to information and the ability to edit accounting data (vendor addresses, etc.).
• Automating work processes: Enable different members of your staff to access client bill workflow, from data entry to verifying amounts to collaborating and providing transparency to the client. By automating payment deadline reminders and an audit trail, you ensure that nothing falls through the cracks.
• Eliminating checks (incoming and outgoing): A single check contains every piece of information needed to access your money. By doing away with paper checks entirely, you protect client and firm account numbers, eliminate risk of lost, stolen or manipulated checks, and can access archived checks securely on Bill.com instead of via email.
• Performing more regular internal audits: Automated systems make regular audits much easier, creating an online audit trail with full remittance data, cleared check images and approval confirmations.

What are you doing to help your clients prevent fraud within their small- to mid-sized business?

Share your success stories here.

Press Release - AICPA Publishes Guidance on Next Generation of SAS 70

New Reporting Options Respond to Growth in Cloud Computing 

Cloud Accounting Enables Firm to Continue Operations Despite Devastating Hurricanes in Florida

When you look at the advantages of cloud-based accounting solutions over traditional on-premise software, you might not consider Mother Nature as a key factor in the decision-making process. However, the recent experience of Harrod CPA, an accounting firm that was able to continue operations despite devastating hurricanes in Florida serves as confirmation of the unique benefits of adopting cloud-based solutions in your firm.

Not long ago, "…when there were three major hurricanes that devastated the central Florida area, Harrod's staff had to evacuate the state for several days. Fortunately, since Intacct's cloud accounting applications are accessible over the Internet, the firm could continue to operate and serve its clients without major disruption."

"We definitely had a competitive advantage due to the Intacct system," noted Harrod. "We reassured our clients, some of whom are scattered throughout the state of Florida, that their data was safe and secure at the IBM data center in California used by Intacct. Even though they were without power for days and their businesses sustained damage, we could continue to provide our service and the clients' financial systems never went down. Other clients not on Intacct were not so fortunate. Since then, many of these clients have migrated to Intacct due to these concerns and the need to mitigate future risk associated with hurricanes in the state."

You can read the recent press release and access the case study posted by Intacct on how the Move to Cloud Accounting With Intacct Helped Harrod CPA Improve Service and Increase Client Success.

If you have recently begun using cloud-based solutions, like Intacct or Bill.com, or are considering the move to the cloud, please share your experiences here, including the challenges of using traditional on-premise accounting software and the unique benefits your firm experienced with cloud-based solutions.