A PAYCHECK PROTECTION program designed to help keep Americans employed in the wake of the ongoing coronavirus pandemic ran out of money on Thursday, as partisan differences have held up the allocation of additional funds to help America's small businesses stay afloat.

The Small Business Administration on Monday issued a statement on its website indicating that it "is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding." In less than two weeks, the $349 billion initially allocated to the program has been exhausted.

"We need to extend that support so we can protect workers and ensure our economy can rebound quickly once restrictions are lifted," Barry Melancon, president and CEO of the American Institute of CPAs, said in a statement on Thursday morning.

The program was designed to backstop banks and lenders granting loans to small businesses while their operations are locked down by state-mandated nonessential business closures. Provided any loans awarded to such firms go toward supporting worker salaries and keeping employees on the payroll – with some exceptions – some or all of those loans would be forgiven through the SBA.

But the initial $349 billion was never expected to be enough to provide long-term and meaningful support to small businesses across the country that have either shut down or drastically altered their business models in the wake of the coronavirus outbreak. Last week and during the three weeks prior, roughly 22 million Americans filed initial unemployment claims. That's roughly equivalent to all of the jobs that the country gained during its historic economic expansion after the Great Recession, erasing progress built between late 2010 and February 2020.

President Donald Trump's administration has been ramping up pressure in recent days to reopen at least portions of the domestic economy from lockdown measures implemented to prevent the spread of the coronavirus. As of Thursday morning, more than 639,000 Americans are confirmed to have been infected with the disease. More than 30,000 have died.

Several governors are now considering plans to partially lift lockdown measures in their states in the coming weeks – though many are expected to do so only gradually to prevent a spike in infection counts. Widespread social distancing measures are expected to remain in place throughout much of the country for at least the next several weeks.

Lawmakers on both sides of the political aisle have recognized the need to allocate further funds to the paycheck protection program, but progress has been stalled by differences over how the federal dollars should be spent. Senate Majority Leader Mitch McConnell of Kentucky has been pushing for an infusion of more than $250 billion into the program, blaming Democrats for slow progress. But Democratic lawmakers have blocked that approach, instead calling for a $500 billion package that would also funnel additional money to hospitals and state and local governments.

Discussions are ongoing between Republicans, Democrats and Treasury Secretary Steven Mnuchin. But business owners and economists warn that time is a critical factor in getting funding to small businesses across the country.

"Just yesterday, we released new data that 90% of small businesses have been impacted by COVID-19 with a large percentage reporting a severely negative impact," John Arensmeyer, founder and CEO of the Small Business Majority advocacy organization, said in a statement on Wednesday. "While it is clear that PPP is not a long-term nor an efficient solution, Congress must immediately add robust funding to keep it solvent, and not delay any further in providing direct cash grant assistance to the smallest, most vulnerable businesses."

With many small business owners in danger of running out of cash as their businesses remain closed in the coronavirus crisis, fintech companies are lobbying to disperse government relief funds to them.

Some say that using the digital platforms they have developed to lend money and process payrolls will be quicker than going through traditional Small Business Administration (SBA) procedures for disaster relief.

The current hotly debated Republican economic relief package bill, under which the SBA would disseminate aid to small businesses, along with relief to workers and big companies, gives the agency 30 days to determine relevant rules before it starts accepting applications for capital. Many in the small business community say that by that point, many businesses, particularly very small ones with inadequate cash reserves and no money coming in, will already have closed. 

The American Institute of CPAs (AICPA), the International Franchise Association, payroll processor Paychex and accounting software provider Intuit, issued an open letter to President Trump, U.S. Treasury Secretary Steven Mnuchin, Small Business Administrator Jovita Carranza and members of Congress today that called for the government to disperse funds to employer businesses through existing payroll processors. 

“We urge the federal government to use these existing systems to direct funds to small businesses so they can make payroll and not shut down due to restrictions caused by the pandemic,” they said in a statement. “In this scenario, the federal government could set up a central payroll funding account that small business payroll processors could utilize so that millions of small businesses could continue paying workers during this time of crisis.”

However, as the group noted, this help would apply only to employers. The vast majority of all small businesses are nonemployer firms, meaning they are solo firms or partnerships that have no employees on payroll.

The American Institute of CPAs (AICPA), along with the International Franchise Association and payroll processing companies Paychex and Intuit, are asking policymakers to help small businesses make payroll during the coronavirus pandemic.

“As the federal government focuses its attention on America’s economic engine — small businesses and their millions of employees — direct funding of their payroll can help,” the group said in a letter. “The problem: It takes time to create new processes to distribute funds to small businesses — speed is of the essence here. An efficient and effective process would be to leverage established small business payroll processing that is already in place and can be marshalled immediately to protect jobs and preserve resiliency within the small business sector.”

The group said about 60 million people in the United States are employed by small businesses, and payroll processors account for roughly 40% of all payroll payments in the United States.

“We are also convinced that proposed direct payments to individuals will not prevent small businesses from laying off employees. Small businesses need to make payroll now – the clock is ticking,” the letter said.

The letter is addressed to President Donald Trump, Treasury Secretary Steven Mnuchin, Small Business Administrator Jovita Carranza, and members of Congress.

Last week, Moody’s Analytics said nearly 80 million jobs in the United States are at high or moderate risk due to the impacts of the coronavirus. The President and chief executive officer of the Federal Reserve Bank of St. Louis, James Bullard, on Sunday said he thought U.S. unemployment could hit 30% in the second quarter.

Initial unemployment claims jumped 33% last week, the biggest week-over-week jump since the 2008 financial crisis.

“The payroll processing companies and the 45,000-plus CPA firms in America have long been partners in helping small businesses thrive in good times, and we have a role to play in the grave challenges we face today,” the group said in its letter.

It is also urging the creation of a central payroll funding account that small business payroll processors could use to allow small businesses to continue paying workers.

The number of confirmed coronavirus cases had jumped to more than 33,000 in the U.S. Monday morning, with more than 20,000 cases in New York.

Few service offerings can boast the sort of boom that client accounting services have enjoyed in the past five or six years, as technological advances (particularly in the cloud), client needs, and bold practitioners have combined to create enviable growth rates and an entirely new way of looking at how firms serve business clients.

For all its success, however, CAS remain an ill-understood niche, with many accountants unsure what it entails and what it offers for their firms. With that in mind, Accounting Today convened a “virtual roundtable” of cutting-edge practitioners and firm leaders, along with industry experts to shed some light on this phenomenon.

In this first installment of the roundtable, the panelists define CAS, gauge how far it has come, and predict its future; in the second part, which will appear in the next few weeks, they’ll discuss integrating CAS into an accounting practice, and some of the practical issues surrounding that.

How would you define modern Client Accounting Services?

Liz Mason (CEO, High Rock Accounting): Modern CAS utilizes efficient and relatively inexpensive technology to provide back-office support, including near real-time bookkeeping, accounting reporting and analysis, and advice. Modern CAS takes the outsourced accounting department model, bills for the value provided, and partners closely with businesses on financial matters to enable greater growth.

Michael Cerami (Vice president of marketing and alliances, CPA.com): Unlike traditional write-up services, modern CAS is technology-enabled and advisory in nature. The focus is much more on intelligent decision-making and strategy for clients. Service offerings are also more varied than they once were and can include virtual or outsourced controller or CFO services, financial statement preparation services and business process outsourcing. The most successful firms these days also tend to specialize in specific sectors, industries or niche plays.

Hitendra Patil (Director of customer success, AccountantsWorld, and author, “Accounteneur”): CAS means the accountant does all or most of the “accounting work” for the clients.

In other words, client accounting services happen mostly when business happens (transactional), some before it happens (proactive advisory) and some after it (write-up). It cannot be just “after the fact” (e.g., write-up, audit, etc.).

CAS, therefore, is about services that emerge from various business transactions that have an accounting action attached -- e.g., bookkeeping, accounting, tax, sales tax, payroll, payroll tax, compliance filing, etc. It could also include advisory for finance decisions of the business (e.g., business tax planning).

The clients can use the same technology that accountants use, but only to the extent of processing some “business transactions.” In other words, in CAS it is the accountant who utilizes his/her education, knowledge, experience and expertise to manage “accounting” for the client. CAS makes accountants become more involved, more integral part of the clients’ business processes, like being their in-house accounting departments, with the key difference that the accountants are a few (or a few hundred, even a few thousand) miles away from the location of the business. The important difference, though, is now the clients have the benefits of professional accounting.

Carolyn Hall (director, FWRD Services, Wiss & Co.): Client accounting services offers full back-office support through the use of cloud technology. The technology generates real-time reports and dashboards, which allows professionals to provide timely advisory services to clients.

Kenji Kuramoto (CEO and founder, Acuity): At Acuity, we view CAS as the design, implementation and maintenance of a client's accounting function. This means providing them the best accounting tools, proper financial processes, and the experienced people to be able to operate their accounting function more efficiently and effectively.

Erin Vukelich (Client advisor II, JCCS): I would define modern client accounting services, at its most basic, as the recording of transactional data and subsequent analysis of that data. A more complex definition could be the use of technology to streamline data and provide real-time data for analysis. Some accountants choose to include advisory services within the “CAS” term, but I prefer to list that separately as client advisory and accounting services.

What has changed in CAS to make it such a growth area over the past five years or so?

Cerami: Mass adoption of cloud services and the digitization of data have really changed the equation for client accounting services, giving firms better analytical capabilities and more forward-looking information to provide to clients. Maybe most importantly, it’s changed the dynamic between CPA firms and their clients, allowing a much deeper, more collaborative relationship. CPAs can provide more insight – in a faster, more easily graspable way – that offers real value for business owners when they make critical decisions.

Vukelich: I believe the automation of compliance work has made CAS a huge growth area and opportunity. The systems that are now in place to automate everything from payroll filings to sales tax filings have given accountants more time to focus on their clients, rather than focusing on processing the data.

Hall: Technology is clearly the key in the advancement of CAS. In addition, organizations like CPA.com and many software companies have played an active role in educating the industry on the tools and resources available to be successful.

Kuramoto: Historically, I think the accounting profession saw CAS as just write-up work or a means to better support a firm's tax department. The primary goal of CAS or write-up was to facilitate getting a tax return complete. Modern CAS is now becoming more focused on the business owner themselves and not just as a way to make tax prep for the firm less painful. I believe that business owners experiencing how CAS can make a meaningful difference in their business, and not just around tax time, has been a huge contributor to the growth in CAS services.

Mason: In recent history, the CAS model was not significantly profitable to firms because the tools were not efficient. Firms did CAS services primarily to support tax and not to advise the businesses. Over the last five years, we have seen a revolution of efficient accounting technology. There has been a boom of machine learning algorithms that are smart enough to get us much closer to the dream of “code-free accounting.” Accountants can currently provide this service without a significant amount of manual entry, and focus on giving the higher level advise that we all find fun.

Patil: Prior to the emergence of new technologies, especially the Internet that gave birth to accounting software on the cloud, business owners used desktop accounting software, more as business operations software and less as “accounting” software. There was no easy and fast way for accountants to access that software. As a result, accountants mostly did after-the-fact work, i.e., after business decisions were made and after business transactions were performed. Accountants, therefore, had little say in how business owners decided, even if accountants could have guided them to make better business decisions. “Proximity” was the key for business owners to keep the accounting software, and hence (what they thought was) the accounting work with themselves. Keeping control over money coming in and going out was perceived as accounting work. Most of the work done by accountants was manually done, even when using computer software. Hence the cost of such accounting services was prohibitive for a large majority of small businesses, which constrained business owners to do it all themselves.

It all was changing over the last few years. Now, with collaborative, real-time, online sharing of the same accounting software, accountants can work with business owners, not just after the business decisions are made by them, but actually, more so, while and even before they make those business decisions and undertake business transactions.

More and more business owners are now aware that the cloud helps them keep the proximity and control, and at the same time, professional accountants can work with them in real time. These possibilities did not exist before. Also, the cloud hastened the progress of automation and integration of various software solutions required by businesses, which has reduced the complexity, and hence the time, efforts and costs required to process business transactions. Automation and integration have benefited both the business owners and the accountants, because professional accounting services can be obtained at more reasonable costs as technology has reduced the manual “work” and hence the costs. Professional accounting work, and insights from it, have become more affordable for millions of smaller businesses that were not engaging accountants before. It created more opportunities for business owners to focus on their core business and outsource accounting to professional accountants. The demand for “client accounting services” has therefore multiplied in recent years.

At the same time, the same automation and integration progress, coupled with newer technologies such as artificial intelligence and machine learning, has made it possible for accountants to gain from efficiencies, reduce their costs and time taken to produce work, and focus on higher-value, higher-priced business insights and advisory services. Such higher-value services invariably help clients’ businesses become more successful, thereby increasing the demand, and revenue, from existing clients as well. The net revenue and net profit per client from CAS is reported to be about two times that from non-CAS clients. This win-win reality has propelled the entire demand-supply equation of the CAS market to new heights.

Cerami: It’s also a great business for CPA firms to be in. We did a benchmarking survey last year on CAS practices involving 119 firms, and we found the median growth rate for the firms’ most recent fiscal year was 12 percent, or more than twice that for overall firm growth. Many firms have launched in recent years that are strictly standalone CAS practices, too, and they’re thriving. The message is clear: Clients value the enhanced advisory role that CPAs play in modern client accounting services.

The American Institute of CPAs has been selected to oversee the newly minted Internet domain, .cpa, by the Internet’s global governing body, the Internet Corporation for Assigned Names and Numbers (ICANN). The new domain will be available to certified professional accountants globally.

Part of ICANN’s mission is to expand the top-level domain structure to aid navigation on the Internet. The effort can support trusted entities and communities, such as CPAs.

In this webinar, a panel of audit experts will chart the developments that are revolutionizing this core service of the profession.

The new domain extension will be available to CPAs and their firms the same way any other domain extension is. For instance, a firm called Best Accounting could sign up for the domain bestaccounting.cpa, and employees at that firm may have an email address with the .cpa extension, as in Jane.Doe@bestaccounting.cpa.

“By overseeing the .cpa domain in collaboration with other global CPA organizations, the AICPA can help promote CPAs’ visibility and protect their professional standing online,” said Barry Melancon, CPA, CGMA, the president and CEO of the AICPA, in a statement. “We also want the public to have confidence that someone using a .cpa domain address for email or a website is affiliated with the CPA profession.”

“Today, there’s a lack of authentication and growing mistrust of online information,” added Erik Asgeirsson, president and CEO of CPA.com, the AICPA’s tech subsidiary. “This is why many leading companies and communities, such as Amazon, KPMG, and the banking industry are moving to restricted top-level domains. We’re looking forward to bringing this important new capability to the profession.”

More details on registering a domain name will be available later this year. For additional information and the opportunity to sign up for notifications, visit https://domains.cpa.com.