And one of the most insidious costs is technology. With the need to replicate the bookkeeping solutions used by the client base, accounting practices are now home to multiple servers running multiple different software packages and, even worse, multiple versions. In addition, these organisations have to undertake complex data transfer activities, both internally and with clients, and ensure staff are trained in many different packages. These costs are significant.
So what is the alternative? Clearly consolidation of these multiple software solutions is critical if accountancy firms are to gain control over this escalating cost base. But there is also another key question: should accountancy firms really be undertaking this management of a complex and expensive IT infrastructure? It is not the core competence of practices. Rather than a mass of incompatible locally installed (on premise) bookkeeping systems, is there not an argument for consolidating on to a single, cloud-based solution?
By continuing to allow clients to dictate software requirements, firms are effectively closing the door on any opportunity to innovate, collaborate or change the service model. At the same time, innovative new market entrants that adopted the online model from day one are leveraging a vastly reduced cost base, scalable business model and real-time information provision to achieve top 100 status within years.
The choice is stark. Continue with the same inefficient IT model with escalating costs and an inability to innovate and slowly watch the customer base decline. Or change. Moving to a single cloud-based bookkeeping solution that can integrate with other solutions easily enables accountancy practices to consolidate, streamline and eradicate unnecessary IT costs. But it also provides an opportunity to transform the client relationship and service delivery and emphasise the value of the services, experience and expertise the practice can provide.
These new services are essential; but they cannot be delivered unless firms transform the internal cost base. Accountants need to take their own advice, lead from the front, adopt good business practice and take a far more proactive approach to IT strategy and innovation. With the online model set to dominate within three years, don’t wait too long to make the decision.