The spend on technology embraces a whole host of areas – hardware, software-be it desktop or cloud, security etc. However, there is no getting away from IT being “essential to have”.
Online filing of tax returns, making tax digital for VAT, companies house e-filing, auto-enrolment, RTI…..the list goes on where electronic filing in the appropriate format is the only way to do things.
The primary output from most accountants is….accounts. Many will use “final accounts” software to generate the output. Company accounts in the required format to comply with Company disclosure requirements are going to look very similar irrespective of the software used. A prospective client is unlikely to choose one firm over another purely on comparing this output generated – and if two practices are using the same final accounts software the output may well be identical.
Some final accounts software does allow some degrees of “tailoring” and personalisation without having to resort to sending output to a word processor. The addition of a cashflow statement for non-incorporated businesses or five-year summaries are just a couple of examples.
As online accounting is rapidly becoming the norm, the ability to offer various degrees of automation, such as OCR of purchase invoices, expense tools, debt chasing etc can transform the service delivery over and above a “vanilla” online accounts solution.
However, awareness of such apps is required in the first place, and training etc is needed if the implementation is to be carried out as well. This all takes investment, both of time and possibly money. This may however be seen as generating a competitive advantage over others.
At the other extreme, those that only adopt the bare minimum of technology might well consider their spend on this a “necessary evil” – always looking at the profit and loss expense heading and seeking ways to reduce the overhead cost. The company accounts in the required format referred to above may be the sole reason for using final accounts software. There are some that still use Excel/Word templates. The compliance of the filed accounts can often leave a lot to be desired- but that’s a story for another day!
Some software may truly be an “expense” – where it continues being paid for, but no-one uses it at all. The access codes and passwords may also be long forgotten. Sometimes there are quite onerous cancellation clauses too! There are also products however that even just the occasional use can save huge amounts of time either “reinventing a wheel” or producing valuable benefits for the client.
In general, though, where do you sit with regard to the technology spend line in the accounts?
Do you regard it as an expense, as a competitive differentiator, or is it some of each so broadly neutral?
How often do you review software you pay for to ensure it is being used?
How often do you compare other similar products – both as regards functionality and price?