RSS feedsMost people agree that building and managing your business relies on the support of software and systems. But a fundamental starting point is knowing which processes you want them to automate and simplify.
If your New Year resolutions extend to your business as well as your private life, you may well have ambitious plans for 2006: doing more to exploit your existing client base, identifying and focusing on your most profitable clients, acquiring and developing new clients, and developing new and more profitable services.
While all of these can be achieved without the aid of technology, the support of the right software and systems can help your firm to achieve them more efficiently and effectively.
But where do you begin? ‘Many accountants want to grow their businesses, but are too tied up with admin and paperwork,’ says Simon Crompton, general manager of the MYOB accountants division, who believes accountants need tools to help them to simplify and automate their procedures.
‘People like us don’t sell product any more, we sell processes,’ he says. ‘The most switched-on firms don’t want to talk about practice management software or personal tax software. They want to talk about the processes they need to put in place to build and manage their business.’
This is certainly a good sign, mainly because it shows the profession is taking a proactive, rather than reactive, approach to software and systems and their potential to transform the firm. Practitioners are telling suppliers what they need, rather than doing their best with the tools provided.
‘Accountants are increasingly IT literate,’ says Paul Booth, technical manager with the ICAEW IT faculty. ‘Most now understand enough to make sense of the technology and assess its potential for their practice.’
For many firms, this means using available technologies to systematise and commoditise the compliance processes, so that accounting staff have more time to focus on developing more lucrative services.
How they go about this varies from firm to firm. When accountant Ray Backler decided to expand his business and focus more on value-added revenue streams, he took a radical approach to the basic bookkeeping and compliance services on offer. By migrating all of his small business accounting clients onto an online system from Liberty Accounts, it was easier to develop new services (see below).
In a year, Backler had convinced all of his clients to go online, despite their varied approaches to accounting. Some were handling their accounts manually, some were using spreadsheets, others had small business accounting applications installed. But, as he explains: ‘They were all long-term relationships and some of them switched because I wanted them to and they trust me.’
Not all firms can get their clients to jump accounting software ship quite so easily. ‘At the moment we use Caseware to produce management accounts, because it allows client data to be imported from a wide variety of accounting software packages, but most crucially from Sage and QuickBooks,’ says Mark Saunders, a partner with Wilder Coe.
To make the process as simple as possible, and keep year-end problems to a minimum, the firm helps its clients to keep their accounting data up to date throughout the year. ‘This can often lead on to us training clients, which is itself a value-added service,’ adds Saunders.
The firm also files electronically whenever and wherever it can. ‘In many areas – such as personal tax returns, company annual returns and payroll P35 returns – electronic filing is now more prominent and actively encouraged by the government, with financial incentives,’ says Saunders. ‘This saves further time and costs for the client and accountant.’
But to maximise the potential for savings, accountants need more support from specialist software suppliers. ‘The market is changing. Integration within the practice is the foundation for everything else, but the issue of how accountants work with their clients and other third parties is increasingly important,’ says Brendan Flattery, managing director of Sage Accountants’ Division.
‘Twelve months ago, accountants were asking us questions about how to integrate software within the practice. Now they’re asking about integration with their clients and organisations such as Companies House and HM Revenue & Customs.’
Without products that integrate inside and outside the firm, even the most ambitious and forward-looking firm can waste vast amounts of time on unproductive admin – and firms are tired of waiting for software suppliers to provide the connectivity and interoperability they need.
‘There has been a complete change in mindset over the past six to 12 months,’ says Crompton. ‘This is partly because of HMRC and the way in which it has encouraged e-filing, but we are also seeing an increase in the number of firms that want to grow their business and don’t want to be tied up by admin and paperwork.’
Later this year, MYOB will introduce Central, a system that ties together all of the processes that the firm uses to run its practice as a business. As its name implies, it’s based on a central database and the company has opted for the industry standard SQL.
Whether they are selling applications or processes, all the large suppliers appear to be following in the footsteps of best-of-breed suppliers, such as The Practice Engine Group and VT Software, by improving the interoperability of their products.
‘Accountants realise that data is a key asset, and they want to use it efficiently,’ comments Martin Leuw, group chief executive of Iris. The single database that underpins the Iris product line is now available in SQL, as well as its proprietary format. Iris has also been working to strengthen the links between its software for practitioners and business users.
‘As Iris has expanded, we’ve put a lot of time into the integration of our product line, making sure it’s all linked and we’ve got great drill down,’ says Leuw.
All of these developments could help shift the emphasis away from packages and product lines and eliminate the boundaries that have previously separated many suppliers’ applications.
This should make it easier for accountants to integrate the disparate systems that characterise many firms, saving time and money, helping them to exploit emerging technologies and systems and providing a sound platform for the development of value-added services.
Lesley Meall is a freelance journalist
Personal service
A hosted internet-based service to handle book-keeping and compliance work has revolutionised opportunities for Ray Backler and his firm, Capsa Consultants, to develop and sell more value-added services.
‘Instead of producing quarterly VAT returns, doing annual tax returns and then sending the client a big bill once a year, I work with them on a weekly basis and charge a monthly fee,’ he says.
The new approach has made it easier for Backler to organise his workload, making the compliance burdeneasier to manage, and improving the service he offers to clients.
‘My small business clients range from sole traders up to businesses employing 20 staff, so they have very different needs. The online system can be tailored to fit the client, so some use it for bookkeeping and some for payroll, while others want to input invoices and let me do everything else for them.’
Dealing with client queries has become less time consuming and complex, and security has also improved. ‘Small businesses are always forgetting to make backups, but the Liberty system does this automatically every night,’ says Backler.
By helping him to meet his clients’ compliance needs with a minimal amount of time and effort, he now has more time to focus on complementary services and giving clients the attention they deserve.
