What does API, SOC and Best of Breed have to do

with Workflow?

Thomas R. Gawne, CPA

Director of Professional Services

Thomas R. Gawne, CPA Director of Professional Services, CPA2Biz

Thomas Gawne, CPA Director of Professional Services

27 years in the tax and accounting

technology sector

Speaker, Facilitator, Consultant

ProfessionalServices

PracticeWorkflow

CPA.comServices

AICPA Store

LMS

Mobile Apps

Audit Confirmations

Payroll

GeneralLedger

Bill Pay

CPA.com Firm Solutions Portfolio

Evolution of Technology

Agenda

Cloud Opportunities

Best of Breed in the Cloud

Security Assurance

Cloud Workflow Concepts

BeforeTransactional

TodayAdvisory

Changing Landscape

It’s getting more complicated...

Transactional

Using technology to support transaction processing

Workflow

Build digital workflow and standardization in processing

Digital CPA

The operating model of the TRUSTED BUSINESS ADVISOR

It’s not just about technology!

What is your strategy?

“Digital Trusted Business Advisor”

Snapshot of key financial and operational data is the first step

RevenueAnalysis

Key MetricsProject Stats

Utilization

Moore indicates that we have crossed to early majority…

Inno

vato

rsEar

ly A

dopt

ers

(Visi

onar

ies)

Early

Maj

ority

(Pra

gmat

ists)

Late

Maj

ority

(Con

serv

ative

s)

Lagg

ards

CHASM

Helping Firms With Adoption Curve

Firm Solutions

CPA Profession

Source: Dr. Geoffrey Moore, Crossing the Chasm

Usage – Estimates by Cisco Systems

Source: “Cisco projects data center-cloud traffic to triple by 2017” - Steven J. Vaughan, posted ZDNet

• North America generated the most cloud traffic.2012

• The first year when the majority of workloads shift to the cloud, 51% will be processed in the cloud versus 49% in the traditional IT space.

2014

• North America will generate the most cloud traffic.2017

Hype Cycle for Emerging Technologies - 2013

Source: Gartner’s 2013 Emerging Technology Hype Cycle

Cloud Computing

Technology Trigger

TIME

VIS

IBIL

ITY

Peak of Inflated Expectations

Slope of Enlightenment

Trough of Disillusionment

Plateau of Productivity

Big Data

An Explosive Trend

Cloud Opportunities

Increased service levels available in the cloud Early adopter phase of cloud adoption Explosive trend of cloud computing usage

Best of Breed in the Cloud

Best of Breed vs. Suite

Best of Breed

Focus on what they do best

Increased speed to market innovation

Solutions designed in open API formats

Multi-platform support problematic

Suite Focus on one vendor

eco-system Innovation is tied to

building a better integrated eco-system

Closed loop systems Integrated approach

makes support easier

Cloud Wave Is Best-in-Class Wave

Dependence on single provider for all processes

Single company R&D investment

All-in-One Suite

Vendor’sChoiceSales PayrollFinance

Maximizing performance and reducing risk 10x portfolio R&D investment 2-6x pace of innovation vs. competitors

Best-in-Class Integration

Company’sChoice

Finance

Payroll

SalesProfessionalServices

Manufacturing

Open API

Partnering for Success

EXPE

NSE

M

GM

TMAN

UFAC

TURI

NG

BUDGETING /

PLANNING

SUPPLY CHAIN

PROFESSIONALSVCS

PAYROLLBILLING

PAYMEN

TSBUSI

NESS

INTE

LLIG

ENCE

NONPROFI

TDOCUMENT

MANAGEMENT

FIXED

ASSETS

VAT / TAX

1099

MIDDLEWARE

CR

M

120+ partners 75% of our customers integrate with 2+ partners

Tax & Accounting Executive Roundtable

This exclusive CEO-level event is unlike any other. Hosted by CPA2Biz and the AICPA, the event brings together America's top:

• thought leaders• financial minds• SaaS entrepreneurs• government regulators• leadership from top accounting firms• State CPA Societies• and respected journalists...

to address the accounting profession's "move to the cloud."

SOLD OUT

New York, NY - January 28-29, 2014

Best of Breed Approach

Maximizing performance and reducing risk 10 times portfolio R & D investment 2 – 6x pace of innovation vs. competitors

Security in the cloud

Service Organization Control (SOC) Reporting

Source: AICPA

SOC 1 Reporting

As with SAS 70 reports, both SOC 1 type I and type II reports can be issued:

• Type I – a type I is a report on policies and procedures placed in operation as of a specified point in time. SSAE 16 type I reports evaluate the design effectiveness of a service provider’s controls and then confirms that the controls have been placed in operation as of a specific date

• Type II – a type II is a report on policies and procedures placed in operation and tests of operating effectiveness for a period of time. SSAE 16 type II reports include the examination and confirmation steps involved in a type I examination plus include an evaluation of the operating effectiveness of the controls for a period of at least six consecutive calendar months.

• Most user organizations require their service provider to undergo the type II level examination for the greater level of assurance it provides

Source: AICPA

SOC 2 Reporting

SOC 2 reports focus on controls at a service organization relevant to the following principles:

• Security: The system is protected against unauthorized access (both physical and logical);

• Availability: The system is available for operation and use as committed or agreed;

• Processing Integrity: System processing is complete, accurate, timely, and authorized;

• Confidentiality: Information designated as confidential is protected as committed or agreed;

• Privacy: Personal information is collected, used, retained, disclosed, and destroyed in conformity with the commitments in the entity’s privacy notice and with criteria set forth in generally accepted privacy principles issued by the AICPA and CICA

Source: AICPA

Security Assurance

Transition from SAAS 70 reporting to SOC Importance of reviewing SOC reports Difference between SOC reports

Cloud Workflow Concepts

Designing Optimal Workflow

Example: Previous Workflow

Current A/P Process – Vendor Invoices

Current A/P Process – Vendor Invoices

Current A/P Process – Patient Reimbursement

Current A/P Process – Patient Reimbursement

Example: New Workflow

New A/P Process

Vendor Issues Invoices for

Goods/Services

Invoice Received at A/P

Processing Center

Invoice Scanned to Bill.com

Invoice entered into Bill.com

DisbursementIssued

Check clears and the bank or e-payment reference number noted in system

Invoice approved by the Site

Manager for Payment

Invoice approved by finance for

Payment

Recommended Vendor Invoice Processing

A/P Vendor

Client

Site Manager

Asst. Controller

Historical Chart of Accounts - Overview

75 Account Code Combinations

Natural Account1500 Equipment

Account SegmentsLocation Department Project

001 New York 100 Corporate 001 002 San Francisco 200 Engineering 002 003 Dallas 300 Development 003 400 Marketing 004 500 Sales 005

Modern GL ArchitectureSimplify Your Chart of Accounts

Historical COAIntacct’s COA Structure

Dimensions – Improve Visibility Into Your Business

Facts / Transaction values

Scenario

Time

Account

Department

Location

Item

Customer

Vendor

Employee

Class

Project

Division

Easily rename / repurpose to meet your business needs

Job# Bldg-Unit

Capture and report on key transactional information

Facts /Trans value: $2,500

Scenario: Actual

Time: 01/15/2011

Accounts: Revenue, Gross Margin

Department: Operations

Division: Business Unit 1

Customer: Cardinal Property Mgmt

Employee: Kyle Reese

Class: Property

Project: PSU10Bldg-Unit Parkside-Unit10

Job#: PSU10: Job101

Example: Property Mgmt Company

JE P

ost via

Web

Service

s

Immediately after the payroll processes, the user posts journal entry

Procure-to-Pay: Before

Data entry/re-keying Lack of controls Manual tracking of vendor performance Errors/inaccuracies Fragmented, cumbersome reporting

Process Problems Purchasing variance Auditing issues Discounts not recognized No true vendor relationship Inventory out of stocks

Business Impact

STEP I:Purchasing manually creates P/O

Step V:Vendors get paid with no visibility between accounting and purchasing

STEP II:Receiving manually matches purchase order with packing slip

STEP III:Accounting matches vendor invoice to purchase order

Systems with limited functionality

Data silos Spreadsheets

Patchwork of: Step IV: Accounting obtains proper approvals for paying vendors

Integrated, Automated Process

Procure-to-Pay - After

Step IPurchase requisition entered in Intacct purchasing. Workflow routes through approvals.

Step IIRequisition converts to purchase order through automated workflow

Step IIIPurchase orders electronically matched through receiving capturing any variances

Step IVPurchase orders electronically matched to vendor invoice capturing any variances

Step VWorkflow manages payment approvals before checks are issued and recorded

No more data re-entry/re-keying Integrated rules/controls Automated Purchasing workflow Requisition to AP Check efficiency gains Automated financial reporting PLUS operating data

Process Solution Visibility to authorized spend Audit-quality data Managed cash flow Vendor analysis and stats Inventory availability

Business Benefits

Continuing the Digital Journey…

Available Resources

Digital CPA Webcast Tuesday, June 3, 2014 2-3pm ET

Geoffrey Moore Whitepaper Case Studies on Firms Webinars

Client Onboarding Training Technology Awareness Webinars

Follow us on Twitter @CPAcom

Staying Connected

@CPAcom @ThomasGawneCP

A @PetePotsosCPA @pwhitmo @kalilmerhib @DeneenatCPAcom

#DigitalCPA

REMEMBER

“CLOUD ACCOUNTING”

Remember . . .

WILL SOON BECOME

REMEMBER

REMEMBER

“ACCOUNTING”

Digital Driven World For Firms & Clients

Thank you!