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Accounting software is chasing its own tail

16th Jan 2023
Brought to you by
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Aurelia are the automation and software experts for accountants and finance leads. We want to to...
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Have you ever wondered why all accounting brands look the same and have the same slogan? You’ve definitely heard and seen the slogan ‘for accountants by accountants’... 

MTD has accelerated the growth of the accounting software market however still a lot of accountants use spreadsheets and manual processes for all or part of their work. 

So what is exactly going on? Does the persistence of manual accounting processes mean that accounting software is falling behind in terms of delivering true value?

Accounting software | Aurelia on AccountingWeb

Looking from a perspective of a small, product-led company we see two major reasons why accounting software seems to be going round in circles, delivering the same ‘solutions’ just dressed in different design and interface: the speed at which big players ship products, and lack of true, product-led vision in approaching the accounting pain points. 

Big fish, big disappointment?

Not surprisingly, accountants, especially if working in the same niche (consider self-employed, LTDs etc) will share similar goals and pains. When discussing software, what they bring to the table is their knowledge of the industry, experience of the software they have used and working with clients and their processes. As a result, most accounting software addresses the same problems, solves them in the same way, just dressed in a different interface. 

There are favourites in the industry - usually the ones that have been in the market for the longest time and have kept up with the changing landscape, delivering solutions as they were needed. A great example of this would be Xero coming out with Xero Go in the summer this year as their response to MTD ITSA. The app itself has left a bitter taste after using it for the first time- nonetheless, it gathered very positive feedback from the accounting community as it felt like a step in the right direction.

It is in fact a common occurrence - ‘the favourites’ remain favourites despite breaking down just before quarterly tax returns or holidays, taking so long to run you could cook a meal for two in that time or just delivering new features late. 

The reason why the big accounting software companies ship slow is clear - a vast majority of accounting software has not been built from ground up but rather re-worked over years and had features added on top of the existing ones which disrupts user experience and makes it clunky. Furthermore, big accounting software providers are aware that changing any sort of tooling is a big challenge for an accounting firm. It requires moving all clients and processes onto a new system and as a result, churn from accounting software is low. That’s why the big fish of the industry don’t feel pressure to do better or provide more advanced, forward-looking features or improvements. They feel like they don’t have to.

Recently we have seen a shift with smaller, younger and more agile companies bringing accounting tools to the market. They are product-led, keen to listen to feedback and iterate on the product to deliver quality over a half-baked solution. Smaller companies like Aurelia are not weighed down by internal processes and usually attract top-tier engineering and product talent that is able to truly leverage technology to design solutions that you thought might have not been possible. Another huge advantage they have over the big fish is the  product-led approach where questions like ‘What are really trying to solve here’ are asked on a daily basis. 

You don’t need a hole in the wall, you need to hang a picture

If we look at how products are typically designed around problems we can draw upon an analogy from a book by Alan Klement, When Coffee & Kale Compete.

Alan mentions that, for example, when someone wants to hang something on the wall, there are multiple ways to do it.

“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole”. Or even more practically, they want to hang a picture which, depending on how creatively you can think, may not even require a hole in the first place.

Similar principle goes for accounting software - what problems are we actually solving? Is it matching invoices to transactions or is it something bigger - clients being unreliable with sending receipts for their expenses and the sheer amount of manual labour that goes with bookkeeping? 

The best possible way to tackle this challenge is combining the accountants’ experience of past solutions and the industry and the out-of-the-box thinking and technological prowess of product designers and software engineers. This could be like a breath of fresh air as product people can contribute ideas that accountants might have never thought about - either because they were so busy with the day to day or, because they just didn’t know what’s possible.

Consider this - if you ever start thinking about delivering other services like advice, reporting or even payments you’d need to look for another tool cause the ones you have in your stack are already heavily focused on bookkeeping and tax and limited in what they can do. But one small change in how a problem is approached, could deliver vastly different results. 

Imagine if rather than showing you a list of paid and unpaid invoices for your clients, software actually allowed you to pay on behalf of your client. It’s an easy way for software to open up new revenue opportunities. 

These are small steps forward that would make your job not only easier but also more rewarding in a metaphorical and literal sense (new service = more money in your practice’s bank account). In order to make this happen - we need to take a step back from how things were done so far and look at the problem from a new, fresher perspective that's not limited by biases and fears of 'it's impossible'.

Final word

At Aurelia we believe that technology has advanced enough to be able to really free the minds of accountants and finance specialists from mundane, copy and paste tasks and let them focus on delivering better results for their clients and their practice. That’s why, when designing our solutions - the end-to-end expense management tool or the e-commerce accounting automation platform, we always go back to the question ‘What problem are we really solving here, what’s the most desired outcome?’ so that we deliver more pictures rather than holes in the wall. We have heard once that it was easier for an accountant to learn to code than for a software engineer to learn about accounting. How about we flip it on its head and say, you tell us what keeps you up at night, we will listen, ask more questions and try to truly take advantage of what technology has to offer to bring you a solution that sets you free.  

So, if you had a magic wand and could do anything - what would you like accounting software to do in terms of bookkeeping and expenses? Let us know in the comments or drop us a line at [email protected]