The 2019 Best Firms for Technology

May 3, 2019 10:56 AM

Whether you call it the Information Age, the Fourth Industrial Revolution, or just Tuesday, there can be no doubt that a massive wave of technological change is sweeping over every sector of the economy. Many businesses are being swamped, and many others are barely staying afloat — but a small group are riding the wave to a more successful future.

The accounting profession is caught up in the same wave as everyone else, so Accounting Today decided to seek out the firms that are in that small group — those that are embracing technology and leveraging it to build more responsive, more profitable and more sustainable practices — with the twin goals of recognizing these leading-edge firms and identifying best practices and strategies that other firms can adopt.

To participate, firms had to complete a fairly extensive questionnaire that Accounting Today created with the help of a number of technology experts and consultants. (We owe thanks in particular to Randy Johnston, Gary Boomer and Dawn Brolin for their invaluable input.) It covered everything from their average number of computer screens per employee, what percentage of their staff works remotely, and how digital their workflows are, to their overall technology strategy, how they use it to better serve clients, and how they build it into their culture.

Three dozen firms completed the questionnaire this year, and all were clearly right on the leading edge of technology, as might be expected from a self-selecting survey. Profiled below are the 11 that we are individually recognizing as the Best Firms for Technology for 2019, but taken together, they form a composite picture of what it looks like to embrace the tools that are shaping the future of the profession, and model the mindsets and strategies that it will take to thrive going forward.

In statistical terms, that firm spends an average of 6.73 percent of its budget on technology (slightly more at smaller firms, and slightly less for larger ones that can reap economies of scale), and each employee gets an average of 22 hours of technology-related training every year (with, again, more hours at smaller firms and fewer at midsized and larger firms). Each employee works with an average of 2.6 computer screens, and 67 percent of the applications they use are cloud-based (though it climbs to an average of 88 percent at small firms, and falls to just over 50 percent at large firms).

More broadly, though, there is a set of characteristics that most or all of them exhibit — technology philosophies, if you will. It starts with being an early adopter, but only on the leading edge, never the “bleeding edge.” They are ruthlessly practical about technology and its limits, but also strongly aware of its power and the opportunities it brings.

We could go on, but a number of the other characteristics are actually better summed up by this selection of highlights from the technology strategy espoused by Top 100 Firm Wipfli, as shared by practice leader Kurt Gresens:

Enable our clients to work with us in a simple, frictionless, and deep and meaningful manner.
Fully enable our solutions in the cloud and with the highest levels of security.
Develop and deliver the same/similar solutions for our clients that we have put in place for ourselves.
Enhanced maturity of our software development processes to deliver optimal value and throughput.
Build a culture of partners and associates that embrace technology and an agile mindset.
Harness the value and power of data, information and knowledge to offer better insights.
Enable our associates to provide far more value through the use of automation and better knowledge/resource management.

A few notes

It’s important to remember that this is a list of the Best Firms for Technology, not the Best Technology Firms. While some of them resell or implement software, or otherwise offer a variety of tech-related services, it is first and foremost a collection of whose primary business is in the core services of the accounting profession.

It’s also important to remember that this isn’t a ranking, which is why the firms are presented in alphabetical order by size category, and it isn’t meant to be comprehensive. The members of the 2019 class of the Best Firms for Technology are impressive, but so are many of the other firms that participated, and any firm that wasn’t one of the 11 named to this year’s list is welcome to submit again next year (and that includes the Honorable Mentions). This year’s Best Firms are ineligible for another three years; they can apply again in 2023.

With that said, we’d like to introduce the 2019 Class of the Best Firms for Technology!

SMALL FIRM CATEGORY: Fourlane

Headquarters: Austin, Texas
No. of employees / Offices: 37 / 0
% of applications used that are cloud-based: 100%

Our editors were pleased to include a firm that is 100 percent virtual. As such, Fourlane relies on technology for literally everything, even the most basic of communications between staff. As founder Marjorie Adams said, “If we can define the logic to a process, we will automate it.”

One of the hallmarks of Fourlane’s virtual success is its continuous communication with staff, including soliciting their input on technology procurement: Every quarter, a team member suggests a potential new technology, including researching and testing the technology to make recommendations to leadership. If adopted, Fourlane takes a 70-30 approach to adoption: The firm needs to only be 70 percent ready for change, and the rest will be figured out during implementation and use. Adams said everyone feels they have input and influence on the tech stack, which helps immensely with buy-in.

One of the biggest challenges of operating a firm completely virtually is, perhaps unsurprisingly, communication -- and not least the tone of communication. Fourlane has created a simple yet effective strategy of assuming positive intent in all communications, no matter what. Clarification over the phone or through video conference can come afterwards, if necessary.

SMALL FIRMS: L&H CPAs and Advisors

Headquarters: Dallas
No. of employees / Offices: 7 / 1
% of applications used that are cloud-based: 100%
Hours of staff technology training per year: 50

Sometimes the simple solution is best: When L&H found itself buried in email, they transitioned all internal communication to Slack only. This elegant fix is a hallmark of a firm that runs smoothly, tackling the small problems that count towards making a larger, tech-enabled culture.

Every technology L&H adopts has to have a clear purpose, and the firm is cognizant of fostering a tech ecosystem that “enhances people” instead of replacing them. “If we don’t have a clear ‘why’ behind each technology we are using, we get rid of it,” partner Kyle Walters said. This is an efficient, smart strategy for a small firm, as they typically don’t have the budget for investment many larger firms would have. Every piece of technology in L&H’s core stack is used often, or it is cut.

Notably, the firm provides a full 50 hours of training per year on average to their staff, including getting staff from merged-in firms up to speed on the tools L&H uses. At the same time, while that’s more than twice the average number of hours, firm partner Kyle Walters points out that even that amounts to just an hour a week … .

SMALL FIRMS: Rudler PSC

Headquarters: Fort Wright, Kentucky
No. of employees / Offices: 33 / 1
% of applications used that are cloud-based: 100%
Average number of hours of tech training per employee: 30

Like many small firms, Rudler spends an above-average percentage of its overall budget on technology — but then, the results of that spending are very tangible, in things like the average four screens per employee, and the Microsoft Surface Pro tablets that every professional staff member uses, and the 30 hours of technology training they get every year.

“We strive to be a firm of the future by always looking three to five years ahead,” said IT director Sarah Sanders. “We provide our employees with resources and educational opportunities to think differently.” The firm recently sponsored six staff in getting their Lean Six Sigma certification, and they now work with the technology group in finding, assessing and implementing new software.

But perhaps the best example of why Rudler is a Best Firm for Technology is in the story of their first remote employee, a senior staff member who had to move to Baltimore. “We were excited about the opportunity this presented,” Sanders explained, “as we had been discussing what a full-time remote employee looked like for several years.” The firm jumped in with both feet, overcoming a number of hurdles, from the technological and the managerial to the cultural, eventually installing video-conferencing systems and a range of new communication methods and protocols that now allow them to support a number of remote workers, some as far away as Tucson.

MIDSIZED FIRM CATEGORY: Acuity

Headquarters: Atlanta
No. of employees / Offices: 85 / 3
% of applications used that are cloud-based: 100%
% of work products that are digital-only: 100%

Founded by Kenji Kuramoto, a frequent speaker on tech webinars and at conferences around the country, Acuity is well-known among techy accountants as a firm for geeks (in a good way). In fact, in its hiring process, every job description begins with the phrase, “If you are a traditional accountant or bookkeeper who prefers doing things and using systems the way you always have, this is not the position for you.”

The firm “has a clear goal to have the most certifications in cloud accounting technologies of any firm in the U.S.,” because it wants to “lead the efforts to modernize our clients’ accounting functions through the use of better accounting software.” Acuity’s tech strategy also hinges on the idea that accountants are uniquely qualified to improve the collection, management and reporting of organizational data for their clients, making the natural approach to be curious about technological change instead of fearful.

While Acuity didn’t provide tax services during its first 14 years of business, it found that many of its clients complained about their tax service providers’ overly manual processes. In response, last November Acuity opened its tax practice with the mission of being 100 percent paperless. While still in its early stages, the practice has seen rapid growth, according to the firm.

Acuity also provides a Virtual CFO Office Hours program where clients can schedule one-on-one virtual meetings with the CFO team via video.

MIDSIZED FIRMS: RoseRyan

Headquarters: Newark, California
No. of employees / Offices: 105 / 1
% of work products that are digital-only: 94%

Like many firms that grow up in Silicon Valley, RoseRyan has technology in its DNA, serving many of the world’s leading tech companies over the years since its founding in 1993. Fitting for a firm coming up during the Internet Age, the firm’s main technology strategy is to go to the cloud whenever possible because it is “cheaper, more secure, more reliable and scalable,” according to CEO Kathy Ryan.

One of the firm’s recent highlights is the creation of Bizinta, a proprietary product grown out of an internal challenge. Years ago, RoseRyan wanted to move off spreadsheets and find a better solution for talent management. There was no product on the market within its price range that could manage and schedule staff in the field. RoseRyan’s first IT hire, Matt Lentzner, was able to create a solution, writing all its code, and it was adopted by the firm immediately. He is now CEO of Bizinta, a company created to market the product of the same name.

RoseRyan fosters a tech-friendly culture by having a clear overall corporate culture grounded in four values: Trustworthy, excel, advocate and team. Open and frequent communication is encouraged both up and down the firm hierarchy.

MIDSIZED FIRMS: Tonneson & Co.

Headquarters: Wakefield, Massachusetts
No. of employees / Offices: 66 / 3
% of applications used that are cloud-based: 100%
Avg. number of screens per employee: 3

One of the things that impressed our editors about Tonneson was its focus on the way technology factors into interactions with both clients and staff. For instance, the firm recently rolled out a new communications system, RingCentral, that lets employees collaborate via chat, conference calls, mobile app and video meetings, and it continuously evaluates and adds new applications to improve client communication, interaction, and information- and document-sharing. It also regularly sends different groups of employees to industry events like the American Institute of CPAs’ Engage conference to stay current with technology trends.

Tonneson is even using technology to help groom its next set of leaders: “Our firm has been focused on supporting the future leaders of our company by creating a committee for them to experiment with new ideas, have their voices heard and be a part of making decisions about new technologies,” explained director of tax operations Tiffany Kolodziej. “Having this group of next-generation staff bring the new ‘it’ products to the table offers the opportunity for our current leaders to see what is out there in the market and what technology solutions we need to have in place to prepare for the future today. This brings our tech-forward culture full circle, embracing our firm's diversity while empowering all levels to be a part of creating the firm of the future.”

LARGE FIRM CATEGORY: Armanino LLP

Headquarters: San Ramon, Calif.
No. of employees / Offices: 1074 / 10
% of applications used that are cloud-based: 65%
Number of applications in use: 155

Among the things that stand out about Armanino it its careful attention to cybersecurity. In an environment where we can’t seem to escape the rising threat of cybercrime, this is an important tact to take. The firm’s strategy is one of layered defenses that focus on reducing attack surface exposure through behavioral detections and automated processes that scale down incident response times and false positives. The firm also recently expanded its privacy services practice to include the protection of client data.

Another forward-thinking, innovative area Armanino has its eye on is blockchain. At first only an area the Big Four had the ability to invest in, now large regional firms like Armanino are following suit. Armanino opened its blockchain practice this year, and created a Blockchain Lab that is already available for client use across a range of industries. Indeed for a firm that is so invested in cybersecurity, expanding into blockchain services makes sense, as such distributed ledger technology is predicted to be the future of online security.

Finally, like some of the other firms on this list, Armanino has created an internal tech-preparedness team dubbed its Transformation Committee, tasked with deciding on technology investments as well as identifying new market and service line opportunities. The firm has also tasked its recruiting team with finding the “workforce of the future,” ensuring it remains ahead of the curve by hiring staff with technological aptitude and the potential to innovate.

LARGE FIRMS: Marcum

Headquarters: New York
No. of employees / Offices: 1,560 / 27 (U.S.)
% of applications used that are cloud-based: 55%
% of work products that are digital-only: 94%

One of the keys to being a tech-forward firm is the realization that what used to be mere overhead is now mission-critical -- or, as Marcum partner and CIO Peter Scavuzzo put it, “Success requires a symbiotic relationship between the core business and the technology that enables it.” Marcum has fully embraced that symbiosis on every level, from its deep commitment to the future of data (“The next natural business resource,” according to Scavuzzo) to its creation of internal centers of excellence and digital ecosystems around artificial intelligence, machine learning, robotic process automation and data analytics, and its willingness to innovate and re-innovate processes and systems to stay on the leading edge.

Marcum’s integration of technology into its culture and business model goes even deeper than that, though -- over the past four years it has been restaffing its tech team with professionals who have accounting and business skills as well as tech skills, so they bring a deeply nuanced understanding of the firm’s core business to innovating technology solutions. And beyond its own symbiosis, the firm works to help clients build theirs, offering visioning and strategy sessions (as well as a wealth of tools, services and solutions) to prepare them for the technology future.

LARGE FIRMS: Warren Averett

Headquarters: Birmingham, Alabama
No. of employees / Offices: 764 / 14
% of applications used that are cloud-based: 50%
% of work products that are digital-only: 80%

Warren Averett communicates with its staff about technology on a weekly basis, to encourage new ideas, increase awareness around data security, or offer software productivity tricks. That frequent cadence make sense, if it hopes to keep up with its extremely busy team of internal developers, who help the firm conceive, create and roll out solutions both for clients — like a custom app for nonprofit clients that manages the daily administration of trusts — and for the firm’s use, as with the custom integrations it needed for a new cloud-based CRM system it implemented.

They must be doing something right, if the reaction to the custom client portal they introduced in 2018, Warren Averett Connect, is any indication: “The biggest compliment is that several clients have asked if they could buy our custom portal to use it with their own customers,” said firm member and chief information officer Chris Morrow.

LARGE FIRMS: Wipfli

Headquarters: Wauwatosa, Wisconsin
No. of employees / Offices: 2,000/47
% of applications used that are cloud-based: 50%
% of workflows that are digital: 91-100%

One way to wrangle massive change is to have a clear set of principles and criteria for approaching and managing each individual change that comes along; Wipfli clearly has that, which the highlights of their strategy that we shared above is clearly indicative of. “Businesses need to consider how change management ensures that they move beyond software implementation to true business transformation,” said practice leader Kurt Gresens. “Firms also need to consider how their culture supports the transformation as well.”

Wipfli has baked technology and the transformation it brings into the firm’s innovative and entrepreneurial model in a multitude of ways: It’s in the knowledge management system it built that let it grow beyond the size where any answer you needed was a short walk down the hallway, for instance, and in the streamlined collaboration solution it uses to work with clients, and in the solutions it designs in early morning calls with its Bangalore office. But as with many of the Best Firms for Tech, Wipfli is also practical about technology, and doesn’t automatically believe that more is always better: “In fact, one of our tactics is to reduce the number of systems that we have, so that we can make it easier for both our clients and our associates to interact,” said Gresens.

LARGE FIRMS: WithumSmith + Brown

Headquarters: Princeton, N.J.
No. of employees / Offices: 1,250 / 11
% of applications used that are cloud-based: 95%
Avg. hours of staff technology training per year: 40

WithumSmith+Brown was one of the first large firms to open a blockchain and digital currencies service line after the Big Four. The firm has a culture of early adoption, also having entered the cloud early on. It’s unusual for a firm of its size to be almost 100 percent in the cloud, as many can be invested in expensive legacy systems that are well-suited to the type of workload large firms handle, and are expensive to phase out.

Withum’s Digital Currency and Blockchain Technology Services Group opened in July 2018. At the time, partner Chris DeMayo told Accounting Today that its creation was spurred by the “emergence of cryptocurrency in the public lexicon, in the technology industry and the broader society we’re in.”

As for cloud technology, Withum’s aim is to be 100 percent cloud. But the firm deploys solutions carefully, only using applications that have been built for the cloud from the ground up. If an existing vendor drags their feet on moving into the cloud, the firm will seek out alternatives.

Currently, Withum has a project underway called the “Withum Experience” that aims to deliver a new collaborative tool that allows all staff to manage jobs, staff, hours, client information and deliverables in one location. The result will be not exactly a proprietary tool, but a new way of leveraging the firm’s existing document management, practice management and workflow solutions in a new and connected way.

HONORABLE MENTIONS

Small firm category: Catching Clouds (Parker, Colorado) and Clearpath Advisors (Littleton, Colorado)

Midsized firm category: Baldwin CPAs (Richmond, Kentucky) and Sax (Clifton, N.J.)

Large firm category: LBMC (Brentwood, Tennessee) and Schneider Downs & Co. (Pittsburgh)