The technological revolution in the accounting profession has produced a veritable universe of new tools and solutions to unleash capabilities undreamed of by professionals just a decade ago. Today there is software for virtually every aspect of accounting that one might wish to consider. This includes programs not only for the traditional areas of auditing and tax, but also for financial reporting, regulatory compliance, data analytics, business intelligence, revenue recognition, liability calculations rental, ESG reports, etc. That’s not even taking into account the wider range of solutions for things like payroll, expense management, time tracking, accounts payable and receivable, and the myriad of other products that fill the business world.
But is it too much?
While the array of products available to the modern accountant is encouraging, some thought leaders have expressed concern that the sheer number of apps is beginning to bog down processes as professionals continually switch between programs that often don’t not communicate with each other.
Randy Johnston, executive vice president and shareholder of K2 Enterprises, noted that a typical CPA firm will have between 75 and 100 applications in use, which he says is just too many. Between the cost of having so many licenses, plus the hours needed to train accountants on the proper programs, plus the effort needed from IT staff to maintain them, tools that were once touted as creating efficiencies are beginning to to gnaw them instead. .
“Tools used more holistically would be preferable. There would be less to learn, less to maintain, less expensive to fire, and frankly, more would be done in less time with less effort. On the other hand, people may want to achieve very specific results with very specific tools, but many of those tools are too limited in what they can do,” he said.
Jennifer Wilson, who runs Convergence Coaching, raised a similar point, saying she recently saw a client complain about the large number of programs needed to find all of her team’s communications between Sharepoint, Teams, email, social media and even text messages. The number of ways people can now communicate, she said, is both “awesome and empowering”.
She said issues like this are faced by accountants in all areas of practice, from tax to auditing to consulting. It is widely recognized that the sheer number of applications is a problem, but at the same time, business leaders feel stuck because today’s hyper-specialized solutions are usually the only way to get the job done. way, even inefficiently. The way work is done today, unfortunately, is through many different software applications that each live in their own little silo and don’t integrate well with each other.
Wilson said it stems from a “best of breed” mindset where people are more focused on creating the best possible way to do a specific thing. So, one developer will create the best possible software for finding and applying tax credits, while another developer will create the best possible software for filing returns, while a third developer will create the best possible software for handling those returns. throughout the tax year; a practitioner in such a scenario could find themselves in a situation where they are using all three programs for a single client, constantly switching between them in different parts of the process.
The current alternative to this, however, is a kind of jack-of-all-trades situation where, say, a high-end tax software vendor will add functionality by “blocking something” to its core engine in a way that , yes, provides additional capacity, but not as well as a specialized program.
“Until someone designs something that deals more with these things as a kind of combined native product, I think accountants will always have this challenge of having to use multiple software applications. [problem] has been around since the software has been around. Is it a one stop shop where you get one product trying to do it all, or is it best in class where you try to do all these different parts and use a different program for each part? ” she says.
Until that happens, Wilson said, businesses are kind of stuck.
While Wilson was hesitant to say whether this problem would ever be solved for good, Donny Shimamoto, founder and CEO of IntrapriseTechKnowledgies, believed that the market would eventually listen to consumers and provide the most integrated solutions professionals crave today. This can be seen in the current wave of new integrations and compatibilities being announced almost daily by various software developers.
“Many software vendors are finally realizing that they can’t just provide niche functionality, but rather must meet the need for at least one full feature. For example, we used to see separate apps for accounts payable, cash disbursements, company cards, and expense reports. We are now seeing apps that integrate all of this into one app,” he said.
Johnston, however, warned that it is perfectly possible for companies to go too far in this direction as well and cautioned against replacing the current chaotic program chaos with a digital monoculture. “A more robust tool can actually do better, but you have to watch that as well, because sometimes a monolithic tool doesn’t do anything better,” he said.
This story is part of an Accounting Today series called “The Frontier,” where we explore the cutting edge of accounting technology through conversations with thought leaders across the country, who will share with us their observations, hopes, their concerns and even some predictions here. and there. We’ll see you at the border.
See the rest of the series here.