A Disruptive Technology Developed by Ford Squared Technologies LLC
BaCoSoft is solution that impacts 100% of an entire industry, every segment of that market will be impacted. 20 years ago, a solution for a single segment of that industry was sold for $400,000,000 1. While that solution had a sizable share of its segment, the overall impact may have been closer to 5% of that market. BaCoSoft impacts the entire industry by serving every segment and can reach 100% of that market because it's the subject of a patent application currently on file with the US Patent Office. If that seller had reached 100% of his industry because they held a patent and nobody else could do what they do, what would that have been worth then, what would it be worth 20 years later, especially if that industry has grown steadily since 1998? Their services are in such demand that it is one of the most sought- after career paths for students enrolling in college today, with most schools boasting 100% of their eligible students finding jobs well before completing their education. Our team here has put a lot of our eggs in this basket and we are excited because we already see it working in our company today. We are in that industry; we have a tool nobody else does and a patent application in place to protect it. We can do things nobody else can and we all know we have not even scratched the surface for what we can do with it.
What’s the industry?
Its public accounting and if you just yawned a little, isn’t that what you want? To be part of a safe, stable, and growing industry in high demand? This is not a .com idea that nobody has heard of, its accounting, used by every business in the world.
What will it do for the CPA?
- Integrates client workflow into their own, automatically, seamlessly, every day. Reporting through a web-based command center that a CPA can manage and complete client projects from:
- That benefits Tax Practices by
- tax adjustments can be automated and real time, updating a CPA's tax prep software automatically with 1 click or even none.
- Real time adjustments mean real time projected taxable income, annualized, multiplied by shareholder users with ownership percentages
- That benefits Audit Practice by
- Real time audit field work with lead-based reporting integrated to report on client’s individually significant items, material amounts and related party activity. Samples can be made based on previously audited.
- That benefits Accounting Service Practice by
- Automated reporting for monthly accounting clients integrated with online report distribution, adjustments to client file can be posted from the platform or proposed and maintained as proposed adjustments based on client preferences, adjustments that can be summarized with supporting details so clients can receive the necessary disclosures for independence to be maintained if needed.
- That benefits Consulting Practices by
- ushing data into your workflow where countless opportunities can be found to assist clients. When they call with a question, CPAs have their financial statements in front of them, so they can see what needs to be done even if the client doesn't ask.
What does it do for their client?
- nline consolidated reporting with drill down detail across all entities
- Business owners automatically receive their preferred financial statements online with one click, currently 25 options exist for their preferences
- Summarized smart phone reporting
- Controllers and bookkeepers maintain the ability to control the flow of information with monthly status settings.
- eal time up to date tax projections, annualized.
- educe client time in the preparation part of year end accounting to zero hours
- Minimize the need for extensions and waiting on returns, except where they wait on entities not on this platform from other CPAs.
How complicated is this going to be?
Even if, like a lot of people, you aren’t really sure what your CPA does all day, don’t assume this solution must be complicated. It is not, the solution is right under our nose. It is the most fundamental part of any accounting system. It does not a change to the client's accounting software (with limited exceptions) or the CPA's tax software. It has always been the core of an accounting system, BaCoSoft is only building from it as middleware that synchronizes those fundamental elements of a client's accounting records to a CPA's workflow. The platform we are describing does not exist, it has not even been contemplated, so we don't demand anyone change from theirs to ours.
How can it be that simple?
How can something so simple be the key to so much? Often, the simplest things contain the answer to apparently complex problems. How do employers pay employees that are located across the country, that are paid using different compensation and that submit their time and compensation calculations using smartphones, web-browsers and desktop applications then directly fund employees' bank accounts, savings accounts and debit cards unless they want a check after calculating retirement plan contributions and all the federal and state payroll taxes they are subject to, withholding those taxes and retirement contributions along with employee portions of medical benefit plans, child support and uniform costs in a system that can be managed by a payroll clerk? Simple, the employers choose solution providers that focus on what they can do with basic raw data. Get the hours, rates, and locations compiled into a central location and then start calculating. They don't try to solve for how to extract data from a faxed in report or that was sent to their customer support representative in an email. They get the raw data that someone is writing on the fax before they write it down because that is the only way to run an accurate and timely payroll with a short deadline. This entire process is repeated weekly at some companies and there are dozens, if not more, service providers for payroll. That payroll is a far more complicated distribution of data and string of calculations than what we are doing, and CPAs have over a year to make sure the data is flowing to the right place on their tax returns and year-end financial statements. The place those numbers land in a CPAs tax software never changes from year to year. Rarely changes from year to year, and if it does, we have some time to break it out and flow it into the new location. We designed this on a spreadsheet, and it automated 5,000 adjustments for a client that had a trial balance with over 7,000 line items for every entity when combined. It produced a consolidated, by state, and by separate entity that we exported directly to the tax software in a couple of minutes after we pasted the trial balance into the spreadsheet.
If it is that simple, why isn't it being done?
his one is asked a lot; therefore, we have had an opportunity to work through the answer. There are a couple of things we have experienced over our careers that help explain why this hasn't been uncovered yet.
- There is a saying we have all heard over the years, "the definition of insanity is doing the same thing over and over again while expecting different results." It is applicable here because our entire industry is based on "what did we do last year." If you haven't worked in public accounting, ask your CPA what that statement means and he will likely reply, that is how we do your tax return. That is the plan even though it is the plan he followed last year that was filled with lots of overtime, stress, and often a bit of chaos because of unexpected challenges that get in the way of their 16-hour workdays. If asked what they plan on doing different, they will likely reply try to get ahead, which means try to stay less behind because that typically translates to start working overtime earlier in the spring and working on extensions earlier in the summer. They aren't the only ones that think that way either, according to the experts at the Project Management Institute, every accounting job is a "project" because it is a temporary effort to create a single, specified, unique result. For CPAs, a "unique" project is one focused on client-specified deliverables, such as a tax return, company audit, or balance sheet. And, because those deliverables are unique to each client, every project is one-of-a-kind, relevant only to that client for their particular purpose. The accounting processes developed to complete any one project are almost always different, even if only slightly, from every other accounting project, so each requires an equally unique approach and process from all other projects, as well. The idea that every project is different when GAAP exists to provide a consistent platform of reporting for users of financial statements, that every tax return goes on to one of a handful of forms and that they all use accounting software to deliver the data to us does not speak well to how thoroughly the experts at the Project Management Institute researched what a CPA does but every CPA believes that because his focus is always on last year, either the tax returns or how we work on tax returns is all based on the prior year.
- PAs in smaller firms are too busy and are really focused on what must be done for last year to think about next year. Even if they did think something all the way through, they don't have the IT resources or expertise to even understand how they would go about doing it.
- arge firms with IT staff are spending their IT dollars on specific output-based needs, a simple solution like what BaCoSoft is based on and what it could do gets overshadowed by actually complicated problems. How do you deliver hundreds of thousands of publicly traded K-1s out to investors. K-1s that change every year as the tax law is updated for both federal and state tax purposes, updated with changes that often aren't received until a few weeks before the tax is due, and the return must be filed or extended. That is a tall order and circumstances like that present themselves every year.
- CPAs, by nature, are not demanding of their solution providers. CPAs take what we get and must convert that to something we can report on in a very short deadline. We just don't think we have time to wait on something more efficient when the truth is that we don't have the time to be inefficient. It's the culture we all were raised in. If our boss came to us with a project due and handed us printed financial statements and ledgers and we asked if they could send it to us in Excel, they would tell us "key it in by hand, I'm not asking my client to do that." We eventually learned not to ask. It's our job to accept what we have and get to work.
- The simple answer has been buried where we hardly see it anymore. We think about the idea as a one off, when every accounting solution is built around simplifying how users apply it. It's been buried by options and user interfaces but it's in every meaningful thing the accounting system does.
lthough I have found a handful of reasons that answer why we are here, note they don't include current client satisfaction. Clients of a CPA firm typically aren't happy with the status quo. Across the board, clients find the entire process too complicated and would be willing to make changes that would get them their tax liabilities faster, to utilize technology and implementation and to reduce their workload.
here is also a new one that goes on that list now and it's the only one we couldn't have overcome. Other CPAs can't develop what we are doing now because what we do has a patent pending, a patent retroactive to 2019, it's not for the easy part, it's for what we do with the easy part for auditors, for tax preparers, for client users. We are literally years ahead of someone that may realize now this can be done. Even if they start down the road, they will have to base everything they do on something more complicated for the users. Like Amazon's patented "click to purchase" button, every future competitor will have to develop this to flow through the equivalent of a shopping cart before it gets to the tax return. The patent includes so many features that others won't be able to provide and without those features, they will only have one alternative, to buy it from Ford Squared Technologies and if they don't, they will just compete against the firms that do, the ones with all the best CPAs, rested with no overtime, discussing client questions real time, often before they are asked by looking at updated financial statements and projections that has notified them of issues before they even look.
We can change how CPAs work with their clients. Currently we are perceived as referees who, after the play is done, penalize companies by informing them of large tax bills for decisions they didn’t know the impact of. We can turn them into a coach, that advises, trains and prepares their clients for what they might expect next April or how to reduce it right now, not next time. Clients have an expectation of taxes that are due and can budget for what the impact is. Clients get more from their accountants in the form of online financial statements and they do less to get them. It is a value proposition their clients will be hard pressed to resist and will solidify their relationship with their CPA forever.
We know this works because we have already developed the platform. We have clients actively using the financial reporting today. They manager their closeouts using it. It's not pretty but it produces what clients need and we are far more efficient with the clients we have on-boarded than we are with those that we have not. By year end we will finalize the tax adjustments and next tax season we will do more than every other CPA in less time for higher fees. Fees we earned by developing a platform that makes it possible, but fees the next firm can use to multiply times their marginal investment in this platform.
We have done what we need to do to get this off the ground and functioning well enough for us. With our platform, a video and a programmer on hand, we will have plenty of opportunities to expand what we do with our clients. We can grow this for a couple of years and wait on someone to come in and offer us far more for to take this product and our measured results to market. It's the path we started on but before we do, with all that we have learned, we wanted to see if there was anyone out there with ideas they might have to get what we need now. We have the firm to cover our overhead and help us make it more functional, we are the beta client and will cover all the overhead. We need to fund an entry level developer or maybe two, a front end designer, someone to take on a lot of my duties in the firm from the tax prep and review side and, most importantly, a customer experience manager that initially builds the brand, finds interest in the product, and distributes a newsletter that describes the profound change BaCoSoft is having on our practice that builds the demand for the product that's ready to ell as soon as next busy season ends and most CPAs are eager for a solution.
f you have some thoughts or would like more information, please call Ford Baker directly at 214.827.9117 or send an email inquiry to firstname.lastname@example.org.
1 In 1998 Larry Lacerte sold Lacerte Software (a federal and state tax preparation and filing solution) to Intuit Inc for $400,000,000. Intuit owns QuickBooks, Quicken, TurboTax and several other accounting related solutions. These accounting and tax platforms by Intuit are only seamlessly flowing together for the BaCo Group, but every CPA firm could experience these benefits if they were to subscribe to BaCoSoft once available. We have registered for a booth at the Intuit QuickBooks Conference in San Jose California. This is not intended to infer that Intuit has expressed any interest in purchasing the product, they just will know about what we can do and the interest we generate later this year.
Published on Jul 12 @ 8:30 AM CDT