“Who signs a 3-year deal on software anymore?!”
Earlier this week Team Capium erupted into fierce debate.
Both sides fighting for a long-term 3-year deal with a 3rd party marketing software company. Never in the history of the business have Capium committed to a 3-year deal and, ironically, it’s something we know our Customers always come up against when migrating from legacy desktop accounting software.
Gordon Gilchrist of 2020 Innovation joined the team to talk through industry updates and, rather unknowingly, poked his head above the parapet into our debate. “Who signs a 3-year deal on software anymore!? Especially when you don’t even know if the software will be fit for purpose in three years.” says Gordon. Of course, he’s referring to accounting software providers with steep exit clauses, nonetheless the team bursts into laughter and in that instant the debate is resolved. But is he right?
At a time where technology is moving on at such a rapid pace and the commercial model of software has moved from a capital expenditure to accommodate business cashflow, whilst providing higher levels of service, it’s not surprising there has been a boom of Software as a Service businesses with monthly or annual recurring revenue models. And in doing so, rapidly accelerated expectations that data is paramount and should be accessible in real-time.
Digital technology has changed our world. From the way we shop, search for new products or do our banking, much of our everyday life is now driven by digital technology, software apps and the ubiquitous smartphone. And small business accounting is no different.
There is a new breed of tech-savvy business clients, many of whom now run their operations online, day to day, in the digital space. And they now expect their accountants and business advisers to do the same.
So, if your accountancy firm is lagging behind the times, there’s a pressing need to make the switch to digital so you can meet the expectations of the new breed of business clients. The UK government’s Making Tax Digital (MTD) initiative has pushed the digital agenda further. MTD has imposed new compliance requirements onto VAT-registered businesses, making it mandatory to record, store and submit tax information as digital data. The speed of change and proliferation of automation is accelerating, leading to the commoditisation of basic accounting services and putting mounting pressure on fees and market position.
Old-fashioned 3-year deals with desktop accounting systems, and hybrid desktop/cloud updates, no longer cut the mustard. Cloud technology and Software as a Service (SaaS) systems have revolutionised the way that software is used in business. And switching to a cloud platform is critical for a digital practice.
Looking back at the evolution of accounting, it’s clear that the past decade of developments in cloud software and digital technology has driven a huge change in accounting processes, productivity and purpose. So, where will technology take us in the next 10 years? And will those long-term deals come back to bite us? What do you think?
To read more about running an effective cloud accountancy practice in the digital age – download our latest whitepaper.