The future of Practice management software

A panel discussion with six Practice Management experts

Digital Accountancy Magazine enjoyed a fascinating discussion this month with six Practice Management experts from many of the UK’s leading Practice Management companies.

We were joined by Stuart McLeod, CEO and Co-Founder of Karbon ; James Byrne, CEO and Co-Founder of AccountancyManager ; Emanur Rahman, CEO and Co Founder of Onkho ; Celso Pinto, CEO of Pixie ; Evan Jones, Lead Technology Product Manager at Wolters Kluwer Tax & Accounting UK and Jonathan Priestley, Senior Product Director, IRIS Software Group.

They discussed everything from what to look for when buying Practice Management software, top tips on implementing it into your practice and how they see the software developing over the coming years.

Stuart McLeod CEO and Co-Founder of Karbon

James Byrne CEO and Co-Founder of AccountancyManager

Celso Pinto CEO of Pixie

Evan Jones Lead Technology Product Manager at Wolters Kluwer Tax & Accounting UK

Emanur Rahman CEO and Co Founder of Onkho

Jonathan Priestley Senior Product Director, IRIS Software Group

In your opinion what have been the key benefits for accountancy firms when it comes to implementing Practice Management software into their practice

Celso - Clients enjoy the benefits of improved proactivity and customer service. Gone should be the days of clients calling or emailing about upcoming deadlines. Practice management software must help firms stay ahead of the curve and handle client matters in a proactive manner.

Increased visibility over client communications and documents let team members be more autonomous and flexible in their work practices. The best firms leverage the ability of working from anywhere and at any time, to improve work-life balance.

Finally, the firm owners should see improvements to staff autonomy and morale, increased productivity and margins, and the reassurance that everyone has the support needed to achieve the desired standard of performance.

Jonathan - Practice Management software is the backbone of any accountancy business and, when used correctly, it will make the entire firm more efficient and profitable. The software should integrate with all your other systems to create a single source of truth. The other main benefit is the ability to report across all your data - from workflow to tax, company secretarial to accounts production.

James - Time-saving - Accountants typically charge by the hour, therefore time really is money. They haven't the time to dedicate to administration especially when there are cost-effective solutions on the market that can automate this for them.

Organisation - as firms grow and take on more clients it becomes increasingly challenging to stay on top of filing deadlines, task lists and the latest interaction with clients. With an efficient practice management solution, all this information is stored in one place so it's available to you at your fingertips when you need it.

Automation - with the technology available today there's certain tasks that simply no longer require human input. Chasing clients, sending reminders and setting tasks are examples of this. We're all very comfortable in sending mass emails to our clients and now setting automatic reminders to chase clients for their records or to make payment is just an extension of this.

Stuart - Firms that implement the right practice management software such as Karbon gain true visibility for the first time. They suddenly know where every job stands across your entire team, who is working on what, and have peace of mind that nothing is falling through the cracks. This year when most of us are working from home and away from the rest of the team, this has never been more important. You can’t just tap someone on the shoulder for an update anymore!

The right Practice Management tool will also provide your firm with a single source of truth for all critical knowledge. Whether it’s communication with a client, standardized processes, team conversations about a job, or work-in-progress, these tools can give your team one place to go and find what they need. All-too-often firms have this critical information scattered across countless other locations.

An accountancy firm runs much more smoothly and efficiently when the right practice management tool is used. Staff are happier, clients receive a far better service, and the firm quickly becomes more profitable.

Emanur - Assurance that clients are getting the service promised. So you got that client over the line – congratulations! Now you need to make sure they stay with you for as long as you can make the relationship work. There’s only one way to do that – give them the service you promised. As long as you have that assurance, you can focus on other things including deepening the relationship with your clients so they will value you even more.

Deep knowledge and understanding of clients. There’s so much valuable information about your client that’s locked up in your head, your team’s heads, mailboxes not to mention post-it notes! When that is all in one place, you raise the bar not just in the quality of service provided to clients but also the depth of understanding in the relationship. This can have all sorts of dividends – more referrals, higher fees, sale of additional products and services – the most important of which is, your clients stay with you longer.

Management by exception. The metrics and data you need to look at today is in addition to, not instead of, what you were looking at yesterday. To cope, you need to focus on what may or might go wrong, rather than what is working nicely. This is where a management by exception approach really helps. It allows everyone from the business owner to the payroll clerk to focus on where they add the most value to the service. As our co-founder Susan always says, when a client complains that something has gone wrong that just too late. Management by exception is how you prevent that happening in the first place because you have controls and metrics that identify problems ahead of time.

Evan - Practice management software delivers a consistent way of working across the business and those who approach its implementation with the right mindset will have ensured buy-in and a desire to succeed from all levels of the business. The consistency it provides enables everyone to see and understand the status of a task and take accountability for actions that lie with them. There’s no longer a need for separate Excel lists as you have a single, up-to-date view of what’s going on. Once you’re working consistently, you can then start to automate. Software can deal with the more mundane tasks such as automatically issuing bills or chasing payments, and missing or out-of-date client information can be flagged and updated.

Meanwhile, from a people perspective, you can use your workforce in smarter ways. There’s no longer the need for them to do data entry or admin tasks, so they can be freed up to focus on more valuable activities. Everyone, from the support team to partners, benefits from having time freed up. For the latter, it enables them to focus on the provision of advisory services, which are much more valuable to clients and critical for practices that want to succeed and grow.

What do you consider should be the top 3 factors that accountants should consider when it comes to deciding what new Practice Management software to purchase for their firm?

Emanur - What reporting is available? What metrics, KPIs will give you the assurance that your clients are getting the service you promised? If you don’t have that assurance, you won’t have the time or headspace to pursue other personal or business goals e.g. a 4 day working week, growth, exit. Too often, owners buy software for the team and their clients. If it doesn’t serve the owner’s needs as well, it’s not fit for purpose.

What level of customisation is possible? The future belongs to compliance and something. That something is whatever you want it to be and how you want to deliver it. A platform that is prescriptive will tie you down and limit your options. On the assumption that you don’t like the disruption of technology change look for flexibility as a key to extending the shelf life of your investment.

Is communication covered? And no, not automated emails. In order to meet client expectations you need to have what we call a unified client view. That means getting all communication e.g. email, SMS, internal notes and other information e.g. meeting notes, work statuses into one place. That feeds the 360 degree view of your client that you will need to service them in a way that makes them so sticky, they never leave you. Don’t forget that it's always cheaper to keep an existing client than to find a new one. Stuart - Be wary of outdated solutions that were built for desktop and have simply been moved to hardware in a remote location. These fake cloud solutions provide none of the benefits that cloud-native applications can, such as security, regular and seamless updates and uninterrupted service, and they are not a longterm solution as the rest of the accounting ecosystem (and the world around us) evolves. On the other hand, systems like Karbon that are built from the ground up for today’s needs can scale on demand and will ensure your team can handle all that the future brings.

You should also consider the rest of your tech stack and the systems you use today. Look for solutions that can integrate with your existing data, and can handle multiple requirements — such as workflow, task management, client collaboration, and team communication. Tech clutter is a growing issue for businesses of all types. Your practice management solution should be what you run your entire firm around.

Finally, think longterm when considering the solution that is right for your firm. For example, if you have ambitions to grow your business, be sure to choose a tool that can scale with you. If your team will be working at home long-term (we may not even have the choice), you need a solution equipped for that. And look at the tool’s track record of innovation and product releases. Any solution must continue to evolve and innovate in the future. It not, it will quickly get outdated and you’ll soon be in the same position as you are now — needing to implement something new again. Celso - I think these 3 points should be taken into consideration when evaluating practice management software for smaller firms:

User experience: no one wants to use slow, clunky, confusing software. The software must be intuitive enough for everyone in the team to be able to perform their day-to-day tasks without training.

No set up required: the software should let you get organised and do real work within an hour of signing up. Unless you’re running a large firm, you shouldn’t have to stop everything and spend weeks or months planning your processes and configuring the software. Signing up for a practice management software should not become a project.

Plays well with others: this should be an important evaluation criteria of any software in 2020, but more so for practice management. Your practice management software shouldn’t restrict your software choices in other areas.

Jonathan - The most important criteria, in my opinion, is usability and the user experience. If the user experience is sluggish or poor, team members will not enjoy using the product and the implementation is more likely to fail. The second factor is its ability to integrate with your other systems, especially your accounts and tax packages. Third, but by no means last, would be functionality - does it genuinely save you time?

James - If you know people at other practices, see what software they use and ask them what they think. Reviews are also a great way to get under the skin of a brand and hear directly from their users. Try Capterra - the software review and comparison sites - or forums, like the one on AccountingWEB.

Work out what you need - Before you get sucked into exactly what different software can and can’t do, think about what would you love to automate across your practice? What are those time-consuming tasks you want to eradicate?

To make this easier, map out your existing processes for one client. Follow the journey from onboarding, through various compliance tasks to invoicing. Where are the bottlenecks? Where are the inefficiencies?

Some questions you might want to ask: How do you store client details? Are client files easy to find? How do you share documents with clients? How do you communicate with clients? How do you track work progress? How do you get client approvals?

You could even estimate the amount of time certain things take. This is an excellent way to see how much time your practice management system is saving you further down the line and assess your return on investment.

Don’t just look at the software - You don’t buy a house without taking into account its history or the neighbourhood. Because it’s not just the features of the house you’re buying, but the whole experience of living in it. Same goes for any software you use. The trial will show you around the ‘house’, but what are the people behind the software like?

Do a little investigative work to see what the brand stands for. Find out what the support team is like. Check how often they release new features. Check out the company’s social media. Challenge the sales team with questions. Read about the leadership team and the brand’s story. And see what their awards cabinet is like. Evan - Choose a software partner for your future business that will serve your needs in five years’ time. You want to grow, so ensure your provider can grow with you, otherwise you will have to undergo this process again.

Choose a partner that has a solution that works for you now. This may seem to contradict point 1, but your selection must be fit for purpose in the present while giving you the confidence that it will flex for the future.

Select a partner that is proven and has a credible business vision. You don’t want to opt for something that works now and has exciting plans for the future but then runs out of funding, leaving you with a product that isn’t going anywhere.

What are your top tips for accountants when it comes to implementing Practice Management software?

Stuart - Firstly, stop putting it off for when things ‘quieten down’. That elusive period rarely arrives! There is no perfect time to implement a new system, but the sooner you bite the bullet, the sooner you’ll start reaping the rewards.

A smart approach is to work with your vendor and ask for their help to develop an implementation plan tailored to your firm’s unique needs. There is lots to consider such as data imports, training, buy-in from your team, and integrations with your existing products. But any new provider should be able to assist with this. At Karbon, for example, we offer a range of implementation packages to suit all types of practices, ranging from free online onboarding, to bespoke full-service implementation.

It is also a great idea to appoint a change champion from your team to manage the implementation. Their job is to make sure everyone across the wider team is progressing, be the go-to person for queries and issues, and be the link to external support. From our experience practices that appoint a person in this role enjoy a much more seamless and painless experience. Evan - For me, there are eight aspects to consider when implementing practice management software.

  1. Implement the practice management software for where you want to be, not for where you are today.
  2. At all times, and in relation to your internal processes, ask yourself, “Why do we do this?” This is the time to eliminate the processes that you simply don’t need.
  3. What do you want to achieve in terms of information/reporting? Decide how your practice needs to work, which in turn defines how data needs to be collected or entered, which defines how it should be set up.
  4. Re-evaluate regularly to see how the market has changed - you may need to work differently and tweak the setup of your product.
  5. Plan, plan, plan. Downtime is expensive. Keep your team working efficiently while you put practice management software in place.
  6. Changing software is easy, but changing people can be difficult. Introduce ‘champions’ who support what you are doing and the reason for change. Others will follow.
  7. It’s a marathon, not a sprint. Create a plan, get the team on board with your vision and implement it in stages so you can accommodate any unforeseen challenges.
  8. Opportunities not threats. Sometimes support teams can fear their roles being replaced by software. This is a chance for them to explore other roles. Having implemented for hundreds of practices, I didn’t see individuals being made redundant. Instead, they were moved to roles that added value to the practice.

Jonathan - Take your time and don’t rush in. The worst thing you can do is buy based on price. You need to consider your entire firm and look at solutions that complement long-term business goals, not just a quick fix for one issue. Consider your firm’s growth rate and where you envisage the firm being in five years. The last thing you want to do is implement new software now, only to have to go through the entire process again in three to five years. Change can cause team members a lot of stress, so you should only do so to move to a more comprehensive, integrated offering. James - Invest the time to set up the system - most systems offer a free trial period. Use the time to set up the system correctly and talk to the sales team to help you create some simple goals to use your trial to its full extent. By the time you start paying for the system, you should already be seeing the benefits and time you’ll be saving.

See the benefits, not the drawbacks - each accounting practice is different and operates in slightly different ways, remember your primary reason for exploring software and investigate solutions that resolve that.

Don’t be put off by the specific ways certain features work. Get the team on board - Your practice management software is the centre of your practice. Onboarding clients, managing work as it progresses and organising everything from client details, deadlines and emails - to your daily tasks. So it makes sense that everyone in your team needs to buy into the idea of A) using practice management software, and B) The software you choose.

Emanur - Think specifically about what you want to achieve for your business, your clients and your team – in that order! Too often the team comes first but if you as the business owner aren’t being served this will come home to roost. Usually in the form of a shadowy parallel world of spreadsheets, a feeling of not being in control, a niggling doubt that some client might be upset somewhere but you don’t know and ultimately – stress. When it comes to stress, no one will carry that for you – it’s your business.

Don’t accept everything a software company says about how you should run your business. If you have clients you already have a business. You’re already doing sales, marketing, running operations, delivering a service and the like and you’re doing it successfully. Software should help you do it better but the emphasis should be on “help”. Software cannot run your business for you. You know how to do it best and insist that the software fits that. Of course, change is good. But you shouldn’t be changing just to use software!

Think about your clients not your workflow. The world is changing and practice management has to be client-centric. It needs to be about the delivery of the service and not about the production of compliance products. Here’s one to think about – doing workflow badly will mean your business will fail, but doing it well doesn’t mean you’ll be successful! Put your focus where it can deliver what you call and define as success. Celso - In his 2015 letter to shareholders, Jeff Bezos wrote how decisions are like doors. Some decisions are one-way doors, very hard and time consuming to reverse. Other decisions are two-way doors, easily reversible.

Implementing a practice management software must fall into the latter category: it should be reversible at any time with the least cost possible. If you can, choose a product that lets you stay in control of your data.

As you get started, aim for small and incremental changes. Don’t spend weeks designing the perfect workflows with all possible subtasks. Done is better than perfect as the saying goes.

A roadmap we’ve seen work successfully hundreds of times is to start by adding all your pending tasks to the product. As you get those under control, think about the common elements of those tasks and create templates. Once you’re comfortable working with templates, look into automating workflows. Move forward one step at a time and at your own pace.

How do you see Practice Management software developing over the next few years?

James - The next few years will be key for all accounting software as I believe there will be an increase in partnerships across the industry. AccountancyManager is already an advocate for working with other software companies to build integrations to provide our clients with the best possible user experience.

User's frustrations are formed in not being able to work efficiently. Users can't afford to spend time on administration or to use a system that adds an additional layers of admin to their work.

The first logical step for practice management systems is to integrate with the cloud accounting packages, like Xero and FreeAgent. I'm confident that this will continue to build into other areas and in a few years, data will be securely transferred between a variety of different programs, enabling the directors to work in the most productive way possible. Celso - Whereas over the past few years it was mostly about the vertical integration of many distinct features under the umbrella of a single product, we believe the pendulum is now swinging towards the unbundling of practice management software.

This unbundling is helping firms stay lean and agile by quickly iterating through best-in-class products to find the combination that works best for them. Stuart - The practice management solution should be the cornerstone of any accountancy firm. This means it’s the one place where anyone in the team — regardless of their role — can go to prioritise their work, plan their day, communicate with colleagues, speak with clients, or access whatever information they need to get their work done.

We are already seeing more data-driven insights and visualizations within tools like Karbon, which provide owners and their staff with clever insights that help them make better-informed decisions around all aspects of running their business.

This trend will only continue further as more and more AI and machine learning is introduced. As this develops further, the capabilities that will be possible for a firm are incredibly exciting. We will see some huge efficiency gains, powerful automaton that puts everything we know today to shame, and very clever analysis that factors in data from every system a firm uses. Being at the center of their tech stack, the practice management solution must be the driver of all of this.

Jonathan - This is an interesting question as it could actually branch into a number of new areas not currently being offered to accountants. The primary vision involves switching the thinking from ‘Practice Management’ to ‘Productivity & Intelligence ’. The way accountants operate is changing. Fees are decreasing and staff costs are constantly on the increase. Clients are still expecting compliance but now need more advice and engagement, and this is where a productivity and intelligence suite needs to be heading.

We hear a lot of buzz words within the industry such as Artificial Intelligence, Augmented Reality, Robotic Process Automation, and Machine Learning. However, in reality, as software developers, we are focusing more on what will help the firms become more profitable whilst remaining compliant. At IRIS we are certainly developing the afore-mentioned technologies, and accountants will start to see far more functionality than they are currently used to. There will also be a significant focus on automating processes and client interactions within intelligent workflows.

Emanur - The answer lies in how the accounting business develops. From what we have seen, practice management that is focused on workflow is no longer fit for purpose. We’ve led the development of Practice Management 2.0 because our roots aren’t in productivity, efficiency and automation – they’re in client retention. Just as the profession is become more outward looking towards the needs of their clients beyond compliance, practice management needs to do so as well. Increasingly we are also seeing quality control that used to be the bread and butter of practice management now becoming embedded in the compliance stack itself thanks to greater analytics and automation. So what then for practice management? We see that it needs a reboot a – Practice Management 2.0 is the art of delivering a service that your clients are willing to pay for, and stay for. That will make it align to the way that the accounting business is developing to meet clients needs. It means that a basic metric like “no deadlines missed” will have to make way for new metrics like “90% of client inquiries closed within 24 hours”. We’ve already substantially into this journey at ONKHO and we see lots of opportunities to innovate further to help our customers. Evan - Automation and collaboration will be critical. Consumers expect visibility – for example, quality retail experiences provide complete visibility from purchase to delivery. We know where our parcel is, when it can be expected and who is responsible for each stage of its journey. In my experience, clients simply want to know what’s going on or get access to information or documentation that has already been prepared.

My favourite analogy is that of London Underground, which was considering increasing the frequency of its service across the network. This would have required more trains, more drivers and other associated costs. Instead, they installed the screens that simply show when the next train is due and quickly realised that this was all that travellers needed to make them happy. Practice management software needs to give the client visibility of what they can expect (and when), but also be clear about what their responsibility to the advisor is. This also allows the advisor to plan for work much more efficiently, which keeps non-productive time to a minimum.

Future practice management software will consume data that is already available rather than requiring data entry. For example, when onboarding a client where information already exists at Companies House, practice management software can pull that data in and start workflows based on when the accounts and corporation tax are due.

Wolters Kluwer Tax & Accounting UK delivered an industry first when we launched the Open Integration Programme in 2016 and this approach is now universally expected. I anticipate practice management software will follow the same path, allowing practices to switch in/out bookkeeping/tax/document management systems from different providers but have a single practice management ‘home’ which gives the tax advisor insight into their business and clients, regardless of the products they are using.

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