According to research amongst just under 12,000 worldwide business leaders carried out earlier this year, 71% were confident about the success of their business. This rises to 84% when the respondents were asked to project this out to 12 months’ time.
When asked what accounted for this confidence, two responses came out on top with equal weighting: a drive for increased efficiency, and quality of staff.
So, it seems two paths might be considered for any business facing challenges in the current economic climate: look both to invest resource in implementing efficiency savings, as well as in the people who make it possible for you to do what you do.
There is a key difference between these two options, of course.
For sole practitioners, investing in staff is a non-starter, outside of growth plans. For practices with multiple employees, investing in employees—training, recruitment, incentivisation—is a hugely rewarding process for all involved. But there’s a fiscal cost attached that might not be available at present.
However, a drive for increased efficiency is accessible to practices of every size.
Doing more with what you already have is very attractive—or, in some cases, a need to do more with less, thanks to spiralling costs for everything from the apps we use to the office spaces we rent.
For the modern accountant, the software they use represents a significant cost. And it’s never been more necessary to eke every ounce of value from those core, integrated products that you rely upon daily. This might even include switching if an app’s price has steeply increased in a way you can’t justify.
Let’s take a deep dive into getting the most value from apps. It’s not nearly as straightforward as you might think.
Software as an employee
One of the first things to examine is how you use each app that forms your technology stack. This is far from the elementary consideration it might seem.
I’ve had a sneak peek at an upcoming book from Natasha Everard, which looks at surviving and thriving as a sole practitioner, and she coins the phrase “software-as-an-employee”. This plays on the industry terminology of Software-as-a-Service (SaaS), of course. But it’s a philosophical viewpoint that creates insight into the best ways for bookkeepers and accountants to use software.
Despite widescale predictions in the industry back in the 1970s and 1980s, when the technology first became available, accounting software did not replace accountants. In fact, demand for the accountancy profession continues to be strong, according to research.
What we know from these decades of experience is that accounting apps work best when they augment human activity. They’re best when they work alongside us, and take some of the strain.
This is what Natasha is hinting at. In treating software quite literally as a kind of employee, you automatically uncover the best ways for it to augment your own work.
Just like with an employee, you need to think in terms of assigning the software tasks. And you need to manage the software and its tasks so that it fits with your schedule, and boosts your own personal efficiency, or that of your team.
Compare this to how many of us instinctively use apps. We consider them only in terms of the functionality they offer, and we make use of that functionality in an indiscriminate, as-needed way.
This is like having an employee sitting in a corner of the office. They’re ready to take orders, but most of the time they’re sitting around playing Candy Crush on their phone. It’s an inefficiency that most employers wouldn’t tolerate!
More than this, when using apps in an ad-hoc way, we don’t consider how long the app might take to complete a task, or whether we can bunch lots of tasks together so that the app can efficiently churn away while we do something else.
Natasha points out that, each Friday, she uploads bank statements to AutoEntry so that the data is ready and waiting for her when she starts work on Monday morning. Similarly, she uploads receipts and invoices in the afternoon so that the data will be there waiting for her the next morning. (In fact, AutoEntry rarely takes more than a few hours to extract data but these are just examples of how tasks can be scheduled for around a given work pattern.)
How Natasha uses AutoEntry is just like asking an employee to process the paperwork by a given deadline, so that she can then do her own work with that data. This maximises her personal efficiency and ensures best value is received from the apps.
But it goes even deeper than this. With a real-world employee, you quickly come to realise where their strengths lie: the things that they’re good at. As time goes on, you’ll get to a point where you’re making the most efficient use of them.
An identical approach needs to be taken with apps. You need to ensure you read the manual, or the support website, or the training videos on YouTube. Reach out to the support team to keep abreast of what’s new in the app.
Make sure you know every little thing that the software is capable of, so that you’re getting the best value.
As I mentioned above, you wouldn’t consider only using 50% of an employee’s skills and time. That would be wasting money, right? So, why ignore huge swathes of the capabilities of the apps you pay for?
Apps we use today are typically very mature, in that they’ve been around for years. And month on month throughout that time, features have been added and improved. You need to keep on top of this, because it’s a direct route to increasing your efficiency—for no more than you’re already paying!
This has to be a lifelong, always-on process. If you’re only using an app for the same-old headline feature that inspired you to sign-up in the first place then it’s just inefficient.
It must be partnered with a constant review of your own working processes, so that you can provide the software with space to create the efficiencies. Again, comparisons to a real-world employee are apt. If you employ a new team member, you wouldn’t keep working in the same way you always have and ignore what they can do for you. You’ll have to adjust what you do, and how you do it. Making use of software features is no different.
Review, don’t react
Many accountants have found software costs increasing of late. This is a symptom of the wider cost of living crisis, and is unfortunate for everybody, although further debate is beyond the scope of this article.
What we can discuss is how to respond to the issue.
The advice has to be to review, and not blindly react. Switching software vendors is certainly an option, and I’ll discuss that in a moment. But that must be the end of a decision process, rather than the start of it. Hasty decisions can have severe revenue implications not immediately visible.
I suggest a calm and collected review process to determine the value you get from an app. For example, you should consider support offered for those times you have questions, or run into problems. You’ll almost certainly know that this can vary radically between software vendors. It can mean the difference between spending a week unable to work because of a problem, or having somebody address that problem within hours or even minutes.
Can you afford to spend a week unable to complete an essential task?
Third-party review sites like Trustpilot often highlight how good a product’s support is, so are a good starting point.
Consider, too, any integrations. Most people reading this magazine are fans of Xero, but it’s not the only accounting app out there used by clients. QuickBooks remains stubbornly popular, while Sage is a resurgent force in the cloud accounting space. Meanwhile, there are many other accounting apps that clients have a habit of signing-up for. Which do your apps integrate with? The broadest possible selection is a must because otherwise you’re simply creating friction for the client.
Consider benefits like partner programmes offered by the software vendor. For example, AutoEntry’s Partner Programme means its partners can get free credits, or even cashback, when their clients sign-up for AutoEntry. Because of this, some accountants and bookkeepers actually end-up using AutoEntry for free!
Making the switch
Sometimes it’s simply best value for you to switch from one app to another. So, how do you go about doing this?
To decide on which app to introduce to your processes, the rules are the same as they ever were. Ask around to see what others use, for example. Enquire with your awarding body, if you have one. Trial the new app on your own business accounting to get a feel for it before you roll it out to clients.
Once you’ve made the choice, decide on the most suitable time window to make the switch. This might be at the end of a financial year, for example, or at the end of a given quarter. Switching at any other time can be like trying to change the tyres on a moving car.
If yours is a practice with multiple employees then ensure there’s a project owner for the process, and KPI milestones to ensure you’re continuing to get the best value. Training will be required, too.
Decide on the most appropriate client transition process. For example, you might choose to switch just new clients you acquire to the new app, while leaving some older clients on the older app for the sake of continuity. Alternatively, your client migration list might be segmented according to those you know to be tech-savvy, compared to those you know to struggle with technology. Some clients will require more work, while some clients will require hardly any.
Consider your communication plan, too. Nobody likes change and if yours is a practice that integrates the costs of software into your fees, so that they’re essentially invisible to the client, then it might be tricky making the case for a switch away from software the client has baked into their everyday processes. Ensure you emphasise any new features or ease of use offered by the new app, rather than explaining that you’re trying to save money.
Look into data export from the old app, and migration features offered by the new app. The introduction of the GDPR and its right for data portability has made getting data out of apps easier than it once was. But this doesn’t necessarily make it easy to get that data into the new app.
Moving data into the new app might not even be required. For example, an export of all the data from the old app might sufficiently satisfy legislation around retaining financial data for a given period. And if you don’t intend to access this historical data in the future, then this might be all that’s needed to remain compliant.
With increased app pricing, it might be necessary to consider how apps are funded.
Most practices simply integrate the cost of apps into their operational costs, as mentioned earlier. Thus, the client remains blissfully unaware of any price increase, no matter how steep, with the obvious downside of your practice having simply to swallow price increases, at least until the next yearly client pricing review (and, of course, I’m sure you regularly review prices with all of your clients!).
However, many practices have switched to itemised billing, so that costs for labour and software are separate and transparent in invoices. This is great example of how transparency can help solve many client problems.
Alternatively, some practices are requesting clients “bring their own software”. In other words, you suggest an app, and they pay vendor direct for that app. You then integrate your software with theirs via the cloud to ensure the data flows freely.
Considerations around the software used in a practice have always been critical for the bottom line. But recent price increases along with other spiralling costs mean more sophisticated insights are needed in order to drive efficiency gains and ensure value is delivered.
The good news is that, with software, it’s often possible to do more with less. It might take a little time to research and adapt processes, but the rewards are always well worth it in the long term.