consider cloud hosting.
by roman h. kepczyk
quantum of paperless
we have all heard the saying that if you don’t know where you are going, you’ll end up going nowhere (or… you won’t ever get there). unfortunately, many accounting firms do not do a good job of integrating their information technology requirements into the firm’s overall strategic vision.
more: why you need an independent security review | ‘learning culture’ requires standardized processes | how to transfer files securely | going digital with a/p processing | avoid over-auditing with ‘document containers’ | beyond email: new digital tools | who deletes documents and when?
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information technology impacts virtually every aspect of accounting firm production and is usually the biggest expense after your personnel costs. accordingly, it should be managed as the critically important asset that it is.
this is one case where firms need to do exactly what they advise their clients to do, and that is to manage information technology with a detailed budget that ties into the firm’s strategic plan.
formalizing the it components of your strategic plan will help you develop your it budget. the most effective budgets actually begin by analyzing last year’s numbers and breaking them down by applications, services, equipment and any other licenses required and then projecting all recurring items three years into the future. this establishes an it “baseline” that the other owners and managers can understand is required just to keep the doors open.
by running out the budget at least three years, the firm can project when new servers and desktop computers (which have a projected four- to five-year life) will need to be replaced, as well as plan for laptops that must be replaced every three years. this format also allows for new initiatives and “one-shot” items to be broken out and managed separately by individual line items, which is much easier for owners to evaluate the roi (return on investment).
as specific servers reach the end of their functional life, it is imperative that firms also evaluate the cost of moving those applications individually to the cloud, which the budget is helpful for monitoring. for firms where their entire server infrastructure is nearing the end of life, hosted cloud providers should also be considered as they include it staffing, support, updates, backup and disaster recovery into a fixed monthly fee per user, allowing the firm to focus on the practice of accounting instead of worrying about it.
having a detailed budget will allow the firm to calculate the average cost per workstation, which can then be added into the calculation whenever a new person is hired. industry estimates point to firms spending between $7,500 and $10,000 per seat each year when all costs are taken into account or 5 percent for single-office firms, 6 percent for multioffice firms that average approximately $145,000 net production per person.
recommended action: download/populate budget template for previous year and project for next three years. identify and focus on one core initiative in each department through completion.