In the age of COVID-19, the notion of working virtually has become so commonplace it is almost clichéd to even discuss it as somehow novel or noteworthy, but in the world of the CPA, the move to working beyond the office is neither new nor easy. CPAs face significant issues when taking their efforts outside their corporate walls.
Rise of the Virtual CPA
The idea of the virtual CPA is hardly new. Many CPA firms had remote capabilities dating as far back as the 1970s, with modems dialing directly into office networks. Those relied on centralized systems housed in LAN rooms at CPA firm offices with work backed up to storage tapes. As time progressed, the technologies allowing remote work matured; in the early 2000s, we saw the introduction of cloud storage and remote hosting, the proliferation of virtual desktops, and the beginning of the end for local hosting. Today, nearly every professional software vendor in the space, like Thomson Reuters, Intuit, CCH, and others all sell fully cloud-based solutions for CPAs and their firms eliminating almost any need for centralized servers or storage.
Individual practitioners have been able to use these technologies to provide outsourced virtual accounting services as a primary service to businesses that cannot afford or do not want to have local in-office accounting staffs.
This has allowed the CPA to go fully remote…if they or, more importantly, their firm or clients are willing to. A CPA can now technically work and operate at 100% capacity nearly anywhere on the planet (or, at least, anywhere there’s Internet access, which, by virtue of mobile hotspots is effectively anywhere). Despite that capability, CPAs and CPA firms have tended to gain a reputation as risk-averse late adopters. Despite decades of technological progress, according to the CPA Firm Management Association’s 2020 Information Technology Survey, only about half utilize an external cloud provider to host their applications. Two-thirds do use virtual server products. Surprisingly, according to the Journal of Accountancy’s 2020 Tax Software Survey, a full 81% of tax firms locally host their tax software.
Given where the industry is, virtual CPAs are forced to work in one of two ways. The first is the CPA working for a firm or a group of clients that hosts its own software on its server. These CPAs will either use a virtual private network to connect to the network remotely and use locally-hosted software or they’ll use a virtual desktop solution to control their server-based desktop at the firm’s home location. The second is the CPA whose firm’s applications are fully cloud-based, in which case they’ll either use a browser or local application to access that data. Either way, work can be done remotely effectively. Firms can utilize either approach to create the ability for their CPAs and staff to work anywhere and, in many cases, be available to clients nearly 24/7.
Virtual CPA: Pros and Cons
Like any situation, there are benefits and drawbacks to consider. Given that the industry as a whole has been apparently reluctant to go fully cloud-based, it should serve as no surprise that there are significant hurdles to consider, both from the perspective of the CPA (employee) and the Firm itself.
The pros are fairly straightforward. A CPA can work anywhere, anytime. There are myriad instances where this is obviously beneficial. A pandemic? Work from home. A natural disaster? Work from your hotel room in the next state. Sick kid? Go home and knock out your work during nap time. On vacation but don’t want to use a whole vacation day? Work from eight to noon from the balcony overlooking the beach.
The ability to pop open a laptop and work from a beach in Tahiti instantly rather than slogging through a commute into the office is highly attractive. Firms can give employees a break by allowing them to work from home a couple of days a week, thereby saving them the time and cost of commuting.
Client satisfaction can also be significantly impacted for the better, by giving a CPA access to client data remotely to meet an emergent need rather than waiting until the next business day. CPAs are able to create the appearance of being in the office without doing so. (Of course, just make sure not to hop on a Zoom call with your biggest client while wearing that T-shirt you slept in last night.)
If the CPA isn’t working for a firm or private company, but instead is serving individual clients as an outsourced provider, it allows them to avoid the overhead of having dedicated offices and allows the clients the ability to interface through cloud-based or remotely-hosted services.
Working virtually gives the CPA significant flexibility, particularly in an age where it can be tough to strike a good work-life balance.
The cons side of the equation is particularly tough to overcome, and they are likely why so many firms and companies are still struggling to advance in the area of remote work with respect to their accounting and finance teams. The single biggest concern CPAs have with putting information online to facilitate virtual work is data security and the related liability. A stolen laptop or cell phone could give a less-than-savory individual access to sensitive client data. There are lots of ways to overcome the liability associated with this, including outsourcing to vendors who adhere to industry best practices, insuring against data theft and cyber risk, and enforcing strict device IT controls (especially in bring-your-own-device “BYOD” situations). But, these aren’t guarantees of data security and it’s well-known among CPAs that a breach or attack can destroy a firm.
Additionally, some firms can interpret a CPA’s ability to work anywhere as a means to access employees and have work completed at any time. The HR considerations here are significant and, in acting as a virtual CPA, it’s critical to know how to create appropriate boundaries.
Guide to Offering Virtual CPA Services
It’s important to delineate between different scenarios when determining how to offer virtual CPA services. There are several different ways the services play out, but they essentially present themselves in a few ways:
Established CPA Firm Utilizing Remote Staff
Most CPAs work for CPA firms or private industry businesses and, in considering virtual work, essentially want to be able to work outside the office. For CPA firms, while the service mix varies (accounting, attestation, taxation, consulting, etc.), the important consideration is determining whether the work can actually be done in a remote fashion. For example, if a client sends documents in physical form (like, say, a shoebox full of receipts for their tax return), there needs to be a provision for making those available digitally and determining if it’s economical to do so (e.g., how much would it cost to have an admin scan in all of those receipts?). On the other hand, if the firm is handling outsourced accounting with software tied to the client’s bank and debt accounts and has the ability to perform ongoing write-up services with little interaction with physical documents, it can work well. Performing remote audit work may require the client to have the capability of allowing the auditor direct access to their accounting system rather than being provided reports by the internal accounting staff. They may or may not want that.
Essentially, the issue here is whether the leadership of the CPA firm feels its client base and service mix will accommodate remote work. Many younger partners in CPA firms have been leading the charge to expand services in virtual form by forming new divisions within firms that specialize in that work.
Private Industry CPA
Many CPAs work in private industry as CFOs, controllers, accounting managers, and other staff within non-CPA firms and private companies. Acting as a virtual CPA in this environment is a bit different because there’s only one entity involved: the company itself. Most companies, depending on size, have moved to cloud-based internal accounting systems (such as Quickbooks Online, Xero, Netsuite, SAP’s cloud solutions, etc.). These systems, or APIs that enhance them, can easily provide for remote handling of operations, including management of receivables, payables, inventories, payroll, banking, debt management, investing, and so forth. Once established, most companies are capable of enabling their accounting and finance teams to work remotely.
Self-employed CPAs cover the gamut of services; however working as a virtual CPA is especially suited to this group. Virtual CPAs have access to a host of cloud-based software solutions that are conveniently priced a-la-carte (i.e., on a per-client basis), offer security that’s tough to achieve without help, and allow the virtual CPA to provide tailored services to a diverse client mix. The virtual CPA, in this case, can act as an outsourced accountant helping small companies achieve proper internal controls where they otherwise might not be able to accomplish it, or by serving as a consultant to larger firms that need specific, targeted services. Either way, virtualizing the firm is almost preferable to any alternative to ensure continuity of operations, ease of access, and an air of professionalism.
So, have you decided that you or your firm can overcome the obstacles and you’re ready to work any time, anywhere? It may be time to talk to leadership in your current firm about moving toward cloud-based or virtualized solutions and spearheading virtual outsourced services for its clients. Alternatively, you might find it better to hunt down a position at firms looking to hire virtual CPAs. If so, check out the virtual CPA firms and virtual CPA job openings today!