10 Steps to a Digital Practice in the Cloud, 2nd Edition

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The Nature of the Digital Practice Model and the Benefits to You and Your Firm

The objective of this chapter is to provide you with a foundation for understanding the overall nature of the digital practice model and how it is integral to increasing the value, quality, and profitability of your client services in the 21st century.

The Digital Practice Value Proposition

Let’s start with a bird’s eye view of the traditional CPA practice model pyramid in figure 1-1. The bulk of time and energy spent in your firm is most likely focused on gathering data and transforming it into meaningful information that typically results in a report of one form or another.

Some examples of these activities are as follows:

• Compiling transaction data into journal entries to generate financial statements that report on the financial status and performance of an organization

• Gathering individual tax data in the form of W-2s, 1099s, brokerage statements, K-1s, and so forth to prepare a 1040 tax return to measure the amount of taxes due and comply with federal and state income tax regulations

Figure 1-1: The Traditional CPA Firm Practice Model

• Accumulating income and expense projection data to develop a cash flow budget to determine anticipated financing requirements

• Gathering industry information to ...