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Do tech stacks work

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I have recently been looking at various tech "solutions" to auto-post clients' purchase invoices. I find it incredibly interesting that every provider I have looked at does not show on their website their system in action. I have had demos and again, all they do is tell you what it does, but not show you. Logic tells me that these systems are unlikely to be helpful for small clients - yet everybody is screaming tech stack in the media.

SO am I merely being a Luddite, or is there a reason there are no working demos ?

 

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By exceljockey
04th Aug 2021 10:31

In my experience, the smaller the client, the less likely a tech stack is going to bring in any efficiencies. I wouldn't worry about tech stacks for the sake of tech stacks. Rather I start with a problem the client is having and try and find a tech solution to solve it. If the client is processing purchase invoices without any accuracy issues and timeously then I don't bother with any auto posting software.

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By cbp99
04th Aug 2021 11:11

I imagine you are referring to things like Receipt Bank (now Dext)? We have tried this and don't use it because a) it requires too much set up in terms of removing irrelevant delivery notes, duplicates, staples, creases etc and b) the outcomes still need to be checked for accuracy. In one case, a Vat return for a pub was wildly wrong because the software had processed all invoices for food supplies with 20% Vat.
In short, the time-saving is negligible or even negative (although there may be economies of scale if the quantity of paperwork is large enough and relatively uniform), and the automation removes any critical faculties from the process.

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Replying to cbp99:
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By Paul Crowley
04th Aug 2021 11:30

Much appreciated
I share your opinion

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By Hugo Fair
04th Aug 2021 12:10

In what media are "everybody screaming tech stack"?

I think cbp99 perfectly encapsulates why you don't find realistic working demos. It's like the early days of OCR (for those with long memories), where you could end up spending longer correcting the resultant mistakes than typing it in with one finger!

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By JD
04th Aug 2021 13:07

QBO does allow the processing of receipts or in other words, tech, without the stack and it is possible to arrive a list of contacts quite quickly using a csv from the clients bank.

However is there time advantage compared with analysis of a bank csv and properly organised file of paper invoices (a lot quicker to check than clicking on each individual poorly taken image) - as cbp99 has said, absolutely not.

Will clients put up with the additional cost and administrative hassle- no, but neither will they do anything about it until HMRC hit them in their MTD pockets.

Will Aweb, continue to be a month piece for the tech companies, instead of overtly challenging and testing the tech companies misrepresentations (on our behalf) on what the product/app can actually do - yes sadly

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Glenn Martin
By Glenn Martin
04th Aug 2021 15:53

Xero + Bank Feed + Dext makes the biggest difference if rolled out correctly.

Then things like GoCardless, Stripe which help you get paid on time are worth looking at.

Beyond this, the business case starts to wain. A lot of reporting apps are costly , they need a lot of time from you to make sure they are correct, and ultimately have low value to the end client so limited take up and value.

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Replying to Glennzy:
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By CJS88
04th Aug 2021 16:13

Seconded

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
05th Aug 2021 09:24

I'm glad you asked that, Michael.

As one of the commentators who frequently uses the phrase ‘tech stack’, I have to assume some responsibility for your plight. Your gripe caused a ripple of anguish here because we’re currently working on a new feature called ‘My Tech Stack’ in which we're asking practitioners to tell us about the cloud software tools they use in their firms.

Our hope was that this would help guide other accountants in their choices rather than winding them up even more.

To begin my defence, ‘tech stack’ is a slightly more graphical and specific phrase or mental image than something like ‘ecosystem’, which it has supplanted. Like any tech buzz phrase, its use expands as more people recognise it as a way to communicate how their systems are arranged.

The concept derives from a longstanding internet model, where the data arriving on your screen is often depicted as being carried on underlying slabs of software stacked up from the internet protocol (IP) communications base through the domain server addressing software, the operating system of the device you're using to the cloud-based application platform (eg Xero or QBO) that plugs into add-on tools through their own application programming interfaces (APIs).

Essentially, the disconnect you’re experiencing comes from the change in how the tools are marketed and provided to you. When programs cost hundreds or even thousands of pounds and were supplied on disks (magnetic or CD-ROM), a salesperson would come to your office or meet you at a trade show and run you through the functionality in a demo.

The new generation of cloud accounting apps cost much less per month on subscription rather than as a one-off usage licence, though of course the costs will build up over time. To sell them profitably, the small developers can’t afford the hands-on sales technique. Instead of a demo, however, most of them offer free trials so you can test the tools yourself over a month or two before you commit to them.

If you’ve got a cloud platform in place, search for the vendor’s ‘app marketplace’ and then review what’s available for the kind of function you want (expenses capture, reporting/forecasting etc). Hook up your engine to it and then throw some live transactions and records at it to see if it’s up to the job. It takes time, but gives you a much better chance to explore the functionality and identify the weak spots that you might miss in a traditional demo.

As long as you have the time to assess the options (or can delegate someone who enjoys playing with these new tools), it’s probably a better path to choosing the right software. The advantage of the tech stack approach is also that you don’t have to pay for a lot of functions you don’t need. The apps accountants and businesses use tend to be point solutions that handle specific tasks - so rather than paying £10k for a client/server suite where most users go nowhere near all the different modules, the tech stack approach lets you tailor the software configuration according to need.

We recently interviewed Xero’s Gary Turner, who touched on this issue. This is what he had to say: ‘Thirty years ago, the accounts department had software that was very functional for invoices, statements or maybe getting a payroll or P&L out.

‘Software has broadened beyond those business needs to address personal productivity, email, CRM and the needs of the service desk or sales team as well as finance and strategy. What’s really interesting now is this evolution of discrete point solutions almost down to the process level…. I think we’re getting business owners to think about how to optimise their businesses - that must be a good thing.’

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Replying to John Stokdyk:
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By Hugo Fair
05th Aug 2021 10:45

A fascinating history lesson but, sorry John, any term that requires that much explanation is unlikely to reach common acceptance let alone understanding.
A shorter description might have been ... another piece of tech jargon designed to preclude the common herd from the ensuing conversation.

Oh and it's simply not true that "The new generation of cloud accounting apps cost much less per month on subscription rather than as a one-off usage licence".

Back in the (bad) old days when you bought your package in a cardboard box from a shelf, the typical home-user/SME software cost less than a month's sub now for equivalent cloud software ... but that was accompanied by easy-to-understand demos/guides/manuals.
The absence of much of this in most cloud offerings is due to laziness and/or penny-pinching ... which is not adequately replaced by getting the prospective user to spend days 'trying it out'!
To use your analogy of "Hook up your engine to it and then throw some live transactions and records at it to see if it’s up to the job" ... some of us expect a new car to work without having to carry out mechanical testing prior to purchase.

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Replying to Hugo Fair:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
05th Aug 2021 12:59

There are other threads where AccountingWEB members are having a pop at Xero for the poor data input facilities and the quality of the ledger. It's a fascinating exchange, but raises an important point.

A lot of the comments about the data capture apps here are talking about their unsuitability for very small business clients, where it is feasible for an accountant to input the transactions faster into VT Transactions+, Sage 50, Excel or one of the other sub-£100 desktop bookkeeping tools.

Fine - as I always say, software decisions aren't really about finding the "best" solution, it's finding the one that fits best with your usage patterns and budget.

But the kind of home-user/SME accounting software you can buy in a box at PC World is not the kind of tool that is going to help you generate quotes for consultancy work (or accounting services even), manage automated sales processes or inventory, or roster scheduling and timesheets in a hospitality business and so on and so on...

If you do want to extend the functionality of a basic cloud bookkeeping engine, the options are out there to do it incrementally to meet the needs of your business clients, who hopefully might be growing and becoming more ambitious and need more accounting support.

And to answer Hugo's last point, I'd argue that most people who are going to buy a car usually do like to carry out mechanical testing prior to purchase. It's called a test drive!

PS - I take on board some of the snipes that Aweb (and me personally) are acting as shills for cloud software suppliers. Yes we do spend a lot of time researching and writing about them, but we can't be wholly responsible for the adoption of these tools by 80% or more of the firms who take part in our software surveys. The market is moving inexorably in this direction, thanks in part to MTD, and we always look to keep in step with what our members are doing.

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Replying to John Stokdyk:
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By Hugo Fair
05th Aug 2021 13:24

Wholly agree, John, that software decisions aren't really about finding the "best" solution, it's finding the one that fits best with your usage patterns and budget.

However a couple of points:
1. The concept of plug-ins (or add-ons as they used to be known) is not the sole preserve of Cloud 'engines' ... there have been specialist packages in all the areas you mention (quotes, SOP, rostering, etc) for 20+ years - some, but not all, with great interfaces to major 'engines'.
2. Although "most people who are going to buy a car usually do like to carry out mechanical testing prior to purchase. It's called a test drive!" ... it's not expected that you'll try out the car's pig-carrying capacity or caravan-towing prowess, or indeed spend several days trying out mechanical performance enhancements.

And for what it's worth it didn't occur to me that you are "acting as (a) shill".
We simply have diametrically opposed views on the benefits & flaws of cloud computing (it definitely has both) - and where the balance lies for most of us.

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Replying to Hugo Fair:
John Stokdyk, AccountingWEB head of insight
By John Stokdyk
05th Aug 2021 14:08

OK, I was perhaps playing up the accusation for effect, and will happily accept your point about desktop integrations and the continuing gulf in our views.

One point I would like to add, though, is that if the complexity or volume of transactions is significant, the advantages start to weigh in of favour of cloud APIs. It may take more effort at the outset, but if you connect up the transaction sources to the ledger and are able to reconcile them (automatically in some cases) to bank account statements, you eliminate a lot of time and potential errors from the data input end.

This week Dext just bought a data gathering app called Greenback, which collects, standardises and consolidates transaction data from 16 ecommerce platforms. These are places where a lot of smaller businesses trade these days. So which tool would you prefer if you had clients with those circumstances, a cloud tech stack or manually inputting the data on a desktop system?

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Replying to John Stokdyk:
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By JD
05th Aug 2021 14:46

Sorry John, but it is not true to say that it is cheaper or more productive. The subscription model is used because of the significant additional profits it generates and quite frankly the only thing these companies are interested in, is maximising sales/using us as their sales team.

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By markabacus
05th Aug 2021 11:54

I also find cloud base system much slower to input the data into. Whilt not a huge fan of Sage it is out main book-keeping package for those clients we do the books for. Desktop based inputting invoices in batch mode can be quickly done whilst for the cloud systems some of our clients use [Sage and QB] it is screen based and much slower. The clients pull the data in but then generally make a mess of the allocations and Vat.
At lot of time is spent educating, re-educating and educating again only surpassed by the corrections we have to make each qtr before finalising their vat return.

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