Categories
Technology

BDO Seidman using SugarCRM to manage office network

Kind of old news (it’s from January last year) but BDO Seidman has implemented commercial open source software to manage their nationwide network of member firms. Open source software is software whose underlying source code is openly available and is usually licensed under the GNU GPL.

What I like about open source is that the software is generally more stable and lightweight than closed-source software. This is due to the open nature of the code, which allows anyone to submit bug fixes or more efficient code.

Firefox, for example, is much more stable and reliable than Internet Explorer, and allows the user much greater control of the browsing experience. So it comes as no surprise that BDO Seidman chose SugarCRM for its adaptability to their specific needs.

[BDO] had never dealt with SugarCRM before, but she said that the lead project manager for the migration project was familiar with open source software. Helping matters was the fact that BDO Seidman’s IT team was very open to the SugarCRM application and regularly volunteered time and effort to work closely with the vendor’s own team when it came time to integrate the product into the environment.

This is where open source can be used more effectively within organizations with specific needs. Getting people from both the customer and supplier to work together to make sure the software fits the organization like a glove.

I wonder whether they would have considered open source if the lead project manager wasn’t already familiar with it. There is still a lot of FUD out there when it comes to open source, so it will take someone like the project manager did at BDO to take the reins and get everyone on board.

As well, BDO looked at other options before deciding to use open source. They even considered going with Microsoft CRM (now Dynamics CRM), but in the end chose something a little sweeter.

Categories
Governance

Audit committees recognize IT risks should be a focus

Dan Meyer at Tick Marks has brought my attention to a KPMG survey that reports audit committees are becoming more concerned about IT risks on financial reporting.

90% believed that IT oversight deserved more time at audit committee meetings. By constrast, 80% of committee members were satisfied with audit committee oversight of management judgments and estimates and 60% felt that committees were spending sufficient time on these issues.

Good to see audit committees are looking into this area with greater scrutiny. IT is often an area where firms of all sizes could benefit from increased focus and constantly thinking of ways to improve their controls and processes.

But what about the 20% that is satisfied with audit committee oversight of management judgments and estimates, but do not believe sufficient time is being spent on the issue? How can you feel an area needs more time and yet be satisfied with the oversight? This is why looking at surveys is fun.

“The ACI survey findings demonstrate a huge gap between the importance that audit committees place on IT risk and how much time they spend focused on it during their already busy meetings,” Smith said. “Since audit committees generally have only basic IT experience, there may be a reluctance to invite chief information officers and chief technology officers to their meetings, in part, because there is a lack of common vocabulary.”

Audit committees need to have at least one member who has a high level of knowledge in IT as it relates to financial reporting. There is no excuse for lacking someone with a good grasp on the IT risks the organization faces. And CIOs and CTOs aren’t enough – CFOs need to have a more than basic understanding, and even lower down in the accounting department.

I’m really pleased that the CICA has been so proactive towards training CAs on this topic. IT is one of the six topics covered in the professional exam process. (The others are audit/assurance, performance measurement, tax, finance, and organizational effectiveness, control and risk management.) Clearly there is some overlap between the last competency and IT.

An in-depth discussion of the six CA competencies is published by the Institute and available here (pdf).

Categories
Taxation

Income trust foreign takeovers may be a good thing

There’s been a lot of activity lately on the income trust front. Foreign firms are making bids left and right to acquire the Canadian entities, in the wake of the 31.5% trust tax introduced by the Conservative government.

Jack Mintz, a professor at Rotman, the business school at the University of Toronto, discusses in a recent Globe and Mail article that trust takeovers are not always a bad thing:

Trusts were shielded from takeovers prior to the federal trust tax announcement because their relatively high market values made purchases more prohibitive. It allowed managers to avoid the threat of takeover and therefore encouraged inefficiency.

Makes sense to me. I’ve come around to the idea that trusts were not all they were cracked up to be. That the trust tax is a good thing. Maybe not for investors who plowed most of their assets into units instead of shares or bonds, but it didn’t make sense that a business could choose to structure itself in a way such that it would pay no tax while other entities would.

Prof. Mintz says trusts could end up being run more efficiently and productively by new management.

“When you are operating as an income trust and have the high valuations at that point – and the very high distributions – it made it difficult for someone to come in and do a takeover based on such a very high valuation,” Mr. Mintz said.

Canada has been lagging in productivity for years compared to our neighbours to the south. This could help close the gap, but it could also result in a dramatic increase in foreign ownership, which could potentially lower tax revenues for the government which set in motion this chain of events in an effort to strengthen the tax base!

What do you think? Could trust takeovers be a good thing for our productivity? Will the increased productivity make up for the potential lost tax revenues?

Categories
Business

Shared office space can preserve scarce cash

Smart cash flow management is critical to any business, but especially so for startups. Leasing the building, furnishing it, maintaining it, equipping it with phone and computer systems and networks… These are significant costs that startups would do well to avoid for as long as possible.

So it was with great interest that I read about the Indoor Playground, “a next generation co-working environment … for the entrepreneur who needs an office space on occasion as well as a community centre for collaboration.” They’re even using Ning for their web presence!

It sounds pretty cool. They have 14 smaller meeting rooms averaging 100 square feet, four larger shared meeting spaces, and a breakfast bar with shared room for working.

There’s an article in BusinessWeek.com about the phenomenon called co-working that features Indoor Playground:

One of the newest co-working facilities, for-profit Indoor Playground, opened in Toronto on Feb. 1 with a mission statement focused solely on supporting local entrepreneurial activity. The space’s hanging dividers and movable desks allow for reconfigurable work areas that can accommodate growing businesses as well as community events. Those events are planned by members themselves, both in person and through wikis.

I’ve toyed with the idea of setting up an accounting firm in a similar manner, with both private and shared working areas, but no assigned cubicles or desks. It’s not that far out, since work tends to come in somewhat “discrete units” in the accounting business. It would encourage employees to move around and enable more interaction amongst departments that wouldn’t normally be situated together.

Tell me in the comments what you think of the idea.

(Via Maple Leaf 2.0.)

Categories
Technology

The case for digitized perm files

Having lugged around three thick files representing the full permanent file for an audit client for the past few weeks, I’ve come to the conclusion that my firm needs to consider digitizing these things.

Perm files for accountants consist of client documents that carry forward year to year. For example, engagement letters are good for three years before they need to be updated and signed the client again, so a copy goes in the perm file for that time. Loan and lease agreements and their related payment schedules straddle multiple periods, as do rebate/royalty/license agreements. Articles of incorporation or amalgamation, and anything to do with share purchases and sales.

There’s no good reason to continue to keep physical copies of all these documents, rather than storing them in PDF or similar format and printing them when a hard copy is required (if ever).

The advantages are many:

  • Cheaper to store
  • Can easily be reprinted if hard copy is ever required
  • Increased mobility due to weight savings and digital format
  • Backups are simple and easy to do frequently
  • More secure storage on protected hard drives
  • Searchable (becomes really helpful as the file gains documents)

The same can basically be said for digitizing whole work paper files each year, but there are still situations where having a physical copy with work done directly on it is needed. I think tablets could be useful in ushering out the era of paper-based files, but who knows when the big firms will start to use them.

How far away from a truly paperless client file system is your firm?