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Practice Management Software : Here’s a tip “Keep it Simple”

Elaine Clark has some advice on how to avoid the pitfalls that can come with Practice Management software

The past 10 years has seen a shift change in the attitude of accountants towards cloud accounting, with many moving from dismissal to recognition that online accounting is the way forward; not just because of the digital mandating by HMRC that forces both clients and accountants in that direction. Selling software in the accountancy marketplace is big business these days.

As cloud accounting systems reached maturity and head towards market saturation, the rise of practice software is taking hold. Recent announcements by TaxCalc and Tax Filer of increased functionality, along with associated price increases, is cementing this as the next big-ticket spend for accountants, albeit as a practice overhead rather than a direct cost easily passed onto the client.

Obviously, the deployment of Practice Management software can have huge process efficiencies and productivity gains within a large accountancy practice. But what about a sole practitioner? How do they ensure that the accountancy practice remains in their hands and that they do not end up handcuffed by the software’s digitally imposed processes? Here’s a few pointers.

What are you looking for?

As with any software selection exercise, before you dive into the detail it’s worth having a list of what you want the solution to do, along with the objectives that you are hoping to achieve. Practice Management can mean different things to different people, such as but not limited to:

• Client data management and control.

•Contact and correspondence management.

• Chasing and event reminders.

• Company secretarial.

• Document management, distribution and storage.

• Deadline chasing and notifications.

• Work planning, control and monitoring.

• Workflow.

• Scope of work management and control.

• Time recording.

• Billing.

• Anti-money laundering.

• Electronic document signing.

• Reporting.

Generally, the implementation of any system should result in efficiencies either in costs or time; or a combination of the two. A sole practitioner should be able to do the client work more efficiently resulting in the freeing up of time to take on more clients. If the software doesn’t pay for itself as well as have a positive effect on the bottom line, then its suitability should be questioned.

Ease of use

As well as considering functionality, whatever system is selected needs to be easy to use and quick. The system should not inhibit the work of the accountant in any way, nor result in things taking longer. The client should not suffer any detrimental impact in their accountant touch points. In fact, they should not be aware that software has been implemented.

Migrating data

It’s essential to make sure that there is a plan and budget for migrating the existing data onto the new system. As part of the implementation GDPR needs consideration, as does the updating of the data protection and privacy policy, as applicable.

Scaling up costs

While many Practice Management software offerings could appear to be inexpensive to start with, all too often the scaling up of costs associated with both client numbers and additional functionality can stack up, making the longer-term investment in the roll-out of the software prohibitive. It’s essential to ensure that there is an awareness of the future costs of the software, as well as how much is charged for ongoing maintenance and support.

What options are there?

Once you’ve set out your objectives and functionality requirements, the next step is to look at the choices available. Practice Management options come as standalone systems, within cloud accounting software and as part of tax return production solutions.

Each system has pros and cons and it’s unlikely that you’ll find one system that will fit all your needs. There may be a trade off between functionality and ease of use versus duplication of data within systems. This could mean that multiple updates of data need to occur to keep everything aligned should you end up with disparate solutions in your practice systems architecture.

Keep it simple

The key message with the selection, implementation and use of practice management software should be “keep it simple”. Avoid falling into the ‘tail wagging the dog’ pitfall of software, where the system starts to take over, control and dictate the way that the accountancy practice is run.

If that starts to happen then take a step back from the system, go back to basics with client touch points, revisit your objectives for implementation and functionality.

If necessary, ditch the software and go back to your spreadsheet or manual system until you find a solution that’s right for you and your practice, using the whole process as a learning opportunity to help you achieve success next time.

Practice Management solutions are still in their infancy with new functions being added all the time. So, don’t despair if you are still searching: the right product for you may not be out there quite yet.

• Elaine Clark is Managing Director of award-winning digital accountancy practice www.cheapaccounting.co.uk, and founder of www.WomenInAccountancy.com

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