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From Adviser Guide: Back Office Systems

Q: What are the low-cost options for smaller firms?

There are many low-cost data handling and productivity tools available, but firms’ requirements will vary substantially.

By Oliver Haill | Published Sep 13, 2012 | comments

There are hundreds of low-cost data handling and productivity tools on the market, but a firm’s requirements really depend on the nature and complexity of its business.

Moving on from managing accounts in a paper ledger, most smaller advisory firms run their businesses using spreadsheets and cloud-based storage to avoid the need for expensive server and document storage capabilities.

Richard Stanton, sales manager at Time4Advice, says this arrangement is often unproductive and creates double-handling of data.

“Whilst superficially attractive for the smaller firm, the lack of ‘joined-up’ records can present issues of efficiency and present little by way of client servicing capability, standardised reporting and require a significant degree or rekeying.”

He adds that it is worth calculating the ‘opportunity cost’ of an hour of time for everybody within the business to see if it automating certain activites is worth the outlay, giving a clear indication of how much time and therefore money a system can save.

“When considered in this context, the true value of a back office can be assessed. On this basis, it is worth taking the time, when considering a system, to assess exactly how staff are spending their time, to identify the specific areas where a system can provide immediate benefits and those which will warrant priority in any implementation.”

“For a very small business, such as a sole trader for example, such options may seem to be attractive but, when the opportunity cost is assessed as above, for such a business the savings can be even more significant than for a larger firm, with dedicated support staff operating at a lower opportunity cost than the business principal.”

Sue Nutall, owner and lead consultant at Jacana, doesn’t believe makeshift combinations of low-cost options are a viable option.

“The value of your company is in the data you hold, and to access that value you have to be able to interrogate the data in a complex manner. This simply isn’t possible unless you are an Excel or Access expert.

“The new RMAR requirements make the manual recording of income extremely onerous for all but the very smallest of firms and whilst we don’t have a problem with cloud based computing, the provider of both the internet and the cloud environment itself need to be carefully considered and disaster recovery plans carefully thought out.”

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