KPMG, New York Stock Exchange Join Forces to Offer Roadmap for Entrepreneurs

New York-based KPMG LLP (FY16 gross revenue of $8.6 billion) has collaborated with the New York Stock Exchange and others to create, “The Entrepreneur’s Roadmap: From Concept to IPO” to help inspire and empower entrepreneurs through each stage of their journey. It addresses concerns such as global expansion into high growth markets, potential tax implications when selling your business and SEC requirements when preparing for an IPO.

“Developing a business from the startup stage is filled with challenges and securing the funding to catalyze that growth is tough without a strong value proposition,” says Brian Hughes, national PIC of private markets group and national venture capital co-leader for KPMG. “This roadmap seeks to guide company leaders at each stage of their life cycle with critical insights to help foster growth.”

“In the first half of the year, global deal-making activity has been strong and, for companies that are considering a divestiture or whole company sale, they need to properly position themselves in the marketplace,” says Phil Isom, global head of mergers and acquisitions and head of U.S. corporate finance and restructuring for KPMG. “In order to aid company leaders in positioning their enterprise for sale and maximize value, they will learn about the steps they should consider when an acquirer approaches them or when they are soliciting interest in their business.”

“As recent volatile markets have shown, companies need to have the flexibility to file an IPO when the best market conditions are present,” says Aamir Husain, national IPO readiness leader for KPMG. “The roadmap helps to prepare companies going public by addressing key issues to be resolved early, especially those that involve complex accounting rules, to allow a company to file at the most opportune moment.”

Topics explored by KPMG include:

  • Going Global in High Growth Markets
  • Getting your Pre-IPO Accounting House in Order
  • 409A Valuations and other Complex Equity Compensation Issues
  • Exiting the Business: What are the Tax Implications

New Book Offers Experts’ Tech Roadmap for CPAs and Business Advisors

A new book by Sageworks provides real-world advice for preparing firms to navigate technology choices, determining which technologies are best suited for the challenges facing firms and ensuring the solutions work for a firm.

Tech Roadmap: Selecting the Ideal Solutions to Thrive in Business Advising,” features insights of 11 leading industry experts in accounting and business advising. They offer practical strategies to help firms make technology decisions that will drive growth in the today’s shifting environment.

The book’s three key chapters answer the questions:

  • What needs to happen at a firm before it begins vetting specific technology?
  • What types of technologies should be considered?
  • How can firms ensure technology is adopted successfully?

“We know the opportunities and pitfalls that technology creates,” Brian Hamilton, Sageworks chairman wrote in the book’s foreword. “We also understand what a critical choice technology is for accountants and others who advise businesses, and we get how difficult it can be to make those choices. At a time when some people are predicting that robots will replace accountants, we believe technology, instead, will allow public accountants and advisors to shift their focus from mechanical, routine work to a more analytical role that proactively helps business owners run their businesses better.”

Comparing Law and Accounting Firms in Terms of Innovation

In an article by Lawyers Weekly, Campbell Jackson, EY Australia’s national professional services leader, shares his view on law’s growth agenda, comparing it to the accounting profession.

“Innovation to me is doing more with less,” says Jackson. “The challenges come down to revenue growth and competitiveness. The firms have to ask themselves ‘How do we remain relevant? How do we optimize costing structure? How do we deal with disruption? How do we utilize technology and how do we get the best out of it for our workforce?’ “

According to Jackson, there are law firms on both ends of the innovation spectrum. Some are moving forward, but others remain stagnant. What he is most adamant about it is that the firms that do not change will not survive. Firms must shift with their clients’ expectations and in his view, the next five years will be the indicator of which firms have done so.

Jackson commented that accounting firms have shown more willingness to diversify their traditional revenue streams than law firms, but even those who do, have innovated much more conservatively. He suggested that in some cases this may be attributed to the fear of being viewed as a ‘hobbyist’ rather than a ‘specialist’.

“I do have a saying that I think is critical to professional services: fail quickly and fail cheaply. Failing’s okay. Just make sure it’s cheap, and just keep trying because eventually you’ll get it right,” says Jackson.

He offers the traditional, segmented way that most law firms bill as an example of the kind of aversion that law firms show to diversifying their revenue streams. Packaging legal services according to practice areas may have been a useful and effective way to deliver a service offering to clients, but today’s clients expect more holistic attention.

Jackson believes that accounting firms have been more progressive and have “extended the tentacles into other areas by moving from compliance to advisory services.”

He said that law firm partnerships should consider how diversification could introduce new channels of business and the benefit of being able to portray the firm as a ‘one stop shop’.

“If there is client demand, the ability to implement and execute is going to be profitable, which will be a good thing. It makes sense if it is profitable and there is client demand,” says Jackson. “If you don’t innovate, you’re dead in this environment. You’ll go backwards.”

BDO Partners with AI Firm MindBridge for Audit

Chicago-based BDO USA LLP (FY17 net revenue of $1.4 billion) and MindBridge Analytics Inc. have formed a strategic relationship augmenting BDO’s existing data analytics and global forensics capabilities through MindBridge’s artificial intelligence platform.

MindBridge’s AI technology enables organizations to analyze various types of transactions and detect anomalous patterns of activity.

“The MindBridge AI auditor enables our team to pinpoint unusual transactions and enhances the thoroughness and precision of our analytics,” says Kirstie Tiernan, managing director in BDO’s technology and business transformation services practice. “Investigations that have historically involved months of combing through millions of transaction samples are now much more comprehensive – yet more narrowly focused – and can be concentrated in just hours.”

“Our relationship with MindBridge is a continuation of BDO’s commitment to helping our clients cost-effectively mitigate their risk of financial loss and reduce corporate liability in a time when data volumes are exploding,” says Stephanie Giammarco, BDO partner and head of the technology and business transformation services practice. “By leveraging the intelligence derived from the platform, we are able to accelerate findings and ultimately, case resolution, resulting in significant cost savings for clients.”

Ransomware: Is Your Accounting Firm at Risk?

Accounting firms could find themselves vulnerable to ransomware, a specific kind of malware that infects a device and gives hackers access to all files on that device. As soon as that device is infected, hackers can encrypt or steal files, essentially holding them hostage until their demand is met.

This whitepaper from AbacusNext outlines the main reasons that accounting firms might become targets for ransomware. Because employees at all levels have access to sensitive client information, Social Secu­rity numbers, banking information, tax documents and passwords, it means each person is a potential target. With the exponential growth of accounting technologies, each new product, app or cloud-based system is a new opportunity for hackers.

The whitepaper provides case studies on the cyber-attacks on Netflix, Ashley Madison and Wannacry, as well as details their scalable private-cloud service.

Sage Announces the Acquisition of Intacct

Sage Group acquired Intacct Corporation, a leading North American provider of cloud financial management solutions. Intacct’s CEO, Robert Reid, will remain to run the business, ensuring continuity for customers, partners and employees.

As customer demand moves to the cloud and away from traditional enterprise resource planning suites, the acquisition assists Sage in providing cloud financial management solutions from start-up to global enterprise, while integrating their other enterprise applications. Sage partners will now be able to grow their own businesses fully in the cloud with Sage. In the short term, it provides Sage further platform for growth, with medium-term aspirations for geographical expansion.

“The acquisition of Intacct supports our ambitions for accelerating growth by winning new customers at scale and builds on our other cloud-first acquisitions, strengthening the Sage business cloud. Intacct opens up huge opportunities in the North American market, representing over half of our total addressable market,” says Stephen Kelly, CEO of Sage.

“Intacct is growing rapidly in our market and we are proud to be a recognized customer satisfaction leader across midsize, large and global enterprise businesses. By combining our strengths with those of Sage, we can jointly accelerate success for our customers,” says Reid.

Dean Dorton Adds Intacct Cloud Financial Applications to Its Portfolio

Lexington, Ky.-based Dean Dorton (FY16 net revenue of $27.3 million) announced a partnership with Intacct, a provider of cloud financial management and accounting software. Together they will sell, implement, support and integrate solutions for Intacct’s cloud financial applications.

“We’ve been helping clients choose, implement and use the best software for their businesses for a long time, and lately it is very clear that successful companies are increasingly interested in using a cloud-based financial system so they can access their financial data anytime, anywhere,” says Jason Miller, director of business consulting services at Dean Dorton.

Dean Dorton clients will also benefit from the web-based dashboards, reporting and business intelligence capabilities built into the Intacct system. Intacct provides a powerful set of analytics and reporting tools that empower users with real-time, accurate and consistent visibility into financial and operational data. The ability to run financial reports by dimensions, (customer, vendor, project or fund) is beneficial to business owners, board members and investors.

“Our cloud-based system is well suited to today’s ever-changing technological advancements and will help companies of all sizes operate efficiently and effectively using their real-time financial data. Jason Miller and the Dean Dorton team have extensive background in technology and accounting, which will be a huge benefit to our mutual clients,” says Taylor Macdonald, vice president of channels for Intacct.

Briggs & Veselka Announces Partnership with IntrapriseTechKnowlogies

Donny Shimamoto

Donny Shimamoto

Houston-based Briggs & Veselka Co. (FY16 net revenue of $35.4 million) has entered into a joint agreement with IntrapriseTechKnowlogies (ITK) and its managing director, Donny Shimamoto, to provide IT consulting and innovation services to middle market companies in the Texas Gulf Coast and South Texas.

MP John Flatowicz says, “Our firm is dedicated to being progressive and this partnership will keep us and our clients ahead of the curve.”

Additionally, B&V has licensed the Intraprise Architecture® methodology and use of the Intraprise Blueprints® intellectual property with clients. Shimamoto will train the B&V staff on how to use these proprietary tools to support work in audit, tax, internal audit, and other advisory services. He will also be helping to develop the B&V team through a variety of engagements. The partnership began with ITK and B&V co-publishing the results of a 2017 Briggs & Veselka Cyber Security Survey. The interactive survey showed that 65% of respondents conveyed a perception of a high or moderate risk of a cyber security incident while more than half were not confident, neutral, or didn’t know if their company was properly secured from internal cyber threats, and an equal amount were not confident, neutral, or didn’t know if their company was protected from external threats.

The study also found that IT governance and IT risk management are very different from IT execution, which can present a false sense of security for middle market companies.

Shimamoto says, “The increasingly targeted digital space makes firms and their clients a greater target than before. It is important each strive to capitalize on innovations in the marketplace and learn from highly trained professionals. The programs we will jointly deliver to Houston area corporations will not only educate, but protect assets for years to come and provide Houston organizations with improved agility and competitive advantage.” Shimamoto is immediate past chairman of the AICPA’s Information Management & Technology Assurance Executive Committee and was recently awarded the AICPA Standing Ovation Award.

Forbes: AI, Machine Learning Will Complement Accountants, Not Replace Them

Robots are not going to replace all human accountants or bookkeepers – at least not anytime soon.

So says Bernard Marr, an author, consultant and specialist in Big Data, who writes for Forbes magazine.

Marr contends that many professionals are starting to fear that technology will make their jobs obsolete, but fear not. “The profession is going to become more interesting as repetitive tasks shift to machines. There will be changes, but those changes won’t completely eliminate the need for human accountants, they will just alter their contributions,” Marr wrote in a July 7 article.

He describes machine learning as the leading edge of artificial intelligence (AI). Machines can learn by using algorithms to interpret data to predict outcomes and learn from successes and failures. As machines take over the more mundane, repetitive and time-consuming accounting tasks, accountants and bookkeepers will be able to devote more time to analyze and interpret the data and help clients by making recommendations.

Some of the possibilities for accountants, working with machines as their new colleagues:

  • Auditing of expense submissions – Machines can learn a company’s expense policy, read receipts and audit expense claims to ensure compliance and only identify and forward questionable claims to humans.
  • Risk assessment – Machine learning can pull data from every project a company had ever completed to compare it to a proposed project.
  • Analytics calculation – Machines can learn to provide information on revenue for a certain product in a certain quarter, or growth in a particular division of the company over a period of years.
  • Siri-type interface for business finance – A conversational app called Pegg, which works with Slack, a messaging app, can create invoices and respond to questions about revenues and expenses.
  • Automated invoice categorization – Accounting software firm Xero is deploying a machine learning automation system that will be able to learn over time how to categorize invoices.
  • Bank reconciliation – Machines can learn how to completely automate bank reconciliations.

“As accounting firms and departments begin to rely more heavily on machines to do the heavy lifting of calculating, reconciliations and responding to inquiries from other team members and clients about balances and verifying info, accountants and bookkeepers will be able to deliver more value to their clients and handle more clients than ever before,” Marr writes. “It is high time for every accountant to reflect on their job, identify the opportunities machine learning could offer to them, and focus less on the tasks that can be automated and more on those inherently human aspects of their jobs.”

EY Launches New York-Based Financial Services Innovation Center

Big 4 firm Ernst & Young has launched its Union Square Innovation Center. The center, which will focus on financial services, is a flagship location for EY wavespace™, the EY organization’s global growth and innovation network.

The lab will serve as a hub for the Suits+Jeans™ approach to innovation, which combines deep business experience with specialists in disruptive trends such as FinTech, blockchain, artificial intelligence, robotics and data analytics.

“When suits and jeans functions come together, they can unlock an institution’s ability to innovate and fundamentally change the way organizations do business,” says EY’s Roger Park. “We are excited to serve as a nexus for these encounters. Our Union Square Innovation Center is a place for experimenting with new ideas, pushing boundaries and truly industrializing innovation.”

Focused on helping financial services organizations achieve breakthroughs at speed and scale, the Center also illustrates EY’s commitment to working with a local ecosystem of clients, government organizations, the startup community and academic institutions to bring New York City innovation into the global wavespace™ network.