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A graphic depicting Crunch's accounting as a platform service
Crunch

Is accounting as a platform the future of the profession?

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Former top-60 firm Crunch has switched its entire operation to an “accounting platform”, combining its own software with a digital network of micro-practice accountants. Could this point the way to how practices will run in the future?

15th Sep 2022
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Have you heard of accounting as a platform? Fear not if you haven’t – but you may hear much more about it in the future, according to Crunch founder Darren Fell.

Formally a top-60 practice predominantly catering for around 10,000 microbusinesses, freelancers and contractors, in 2020 Brighton-based Crunch decided to change focus and remodel its offering to an “accounting platform”.

Drawing from the common term software as a service (SaaS – where users purchase software solutions on a pay-as-you-go basis from a cloud provider), Crunch has adopted the accounting as a platform model. This combines its own cloud software with a digital network of micro-practice accountants who log into a central Crunch HQ portal to pick up and process accounts production and tax work and to answer client year-end or self-assessment questions.

Successful trial

After initially scoping out the idea, Fell and his team trialled it with one chartered certified accountant, putting packages of work together for her to complete, and found they came back quickly and accurately. The system was then scaled up to produce 50 sets a week, then 100, and it continued to expand, to the point where the triallist began to employ other accountants to bolster capacity. 

According to Fell, Crunch found the move slashed its per unit price to the point where the firm has now stopped using any foreign outsourcing partners. But he is also adamant that for those accountants who are part of providing it, it has also been beneficial.

“We wanted to deliver a model into Crunch that would genuinely help businesses and accountants,” Fell told AccountingWEB. “The work we offer accountants is completely flexible, working from home. It’s attractive to parents who don’t want to go back to practice full time but remain brilliant accountants, or those who are looking for a bit more balance in their life.”

Fell believes that a major selling point for participating firms is the software’s automation, reducing time spent wrangling data, plus completely cutting out marketing spend and time spent onboarding new clients.

“We’re also taking on small practices with a traditional side,” Fell continued. “It’s fantastic revenue for them and once they see how much efficiency our software provides they tend to stick around. We’re working with accountants who see they can benefit from accountancy as a platform, rather than see Crunch as the competition.”

Crunch’s central accountancy function targets and onboards accountants suitable for the scheme and then sluices the work across to participating individuals or firms, who are paid depending on the volume of work they take on – with some earning upwards of £100,000 a year in fees, according to Fell.

Crunch has a “freemium” range of pricing, starting with Crunch Free, which includes accounting software, invoicing, expenses and bank feeds free of charge but does not offer year-end accounts. It then scales up to include paid offerings for sole traders, limited companies and small businesses. A full pricing list can be found here.

Clients can either get access to accountancy support as part of a paid subscription plan or pay a one-time, per-hour fee.

“The growth on our Crunch Free service between Q4 2021 and Q2 2022 has been 18% and we’re currently signing up more than 1,000 clients a month,” said Fell. “Overall we have 30,000 active software customers, with 9,500 SaaS customers using the Pro, Premium or Small Business versions. 

Built for scale and the challenges ahead

While similar services in the UK are few and far between, one comparable in the North American market is Intuit’s TurboTax Live and QuickBooks Live service, where the software giant hires CPAs to answer users’ tax and accounting queries from within its software. However, Fell believes there are inherent flaws with developers pushing accounting services through direct-to-market channels.

“The problem with taking a software-first approach to this is that the vendors’ route to market is through accountants. If they started taking firms’ clients, will that make accountants drop them as a software of choice? It’s a risky move.

“Our problem previously as a more ‘traditional’ firm was that we had problems scaling the software and the service side of things. We’ve now solved both,” added Fell.

Crunch built its first accounting software 15 years ago, but in 2020 completed a total rebuild of its systems. To cope with the anticipated rise in volume, the new version has been built as a service-based architecture, similar to the tech stack used by Netflix.

Concourse competitors

Is Fell concerned that commoditising tax and accounting work could lead to increased competition and lower fees? “We’re aware that concourse competitors are always watching from both sides of the practice and software fence,” he said. “We endlessly have copycats who come and go but we’re still here and that speaks volumes.”

Fell believes that the market for accountancy services is only likely to grow with the advent of Making Tax Digital for income tax self assessment (MTD ITSA), and is confident his firm is geared up for the challenge ahead.

“Some of the software players are making a big thing of it as it’s their only avenue of growth,” he said. “We now have a proper tech stack designed for scale and our new accounting as a platform model can handle almost infinite volume. While MTD ITSA will direct a lot more clients and accountants to us, we believe our model is ready for anything.”

Replies (27)

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David Ross
By davidross
15th Sep 2022 11:11

A very interesting article for those of us who are considering outsourcing.

But one supposes it relied heavily on a Press Release. What on earth is a "Concourse Competitor"? I'm always suspicious of those who talk down to use using jargon to make us feel inadequate.

Tom, you have been guilty of this in past posts - please translate

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Replying to davidross:
Tom Herbert
By Tom Herbert
16th Sep 2022 10:40

My apologies David, this was a direct quote from Darren that I should have either taken the time to explain or remove.

My understanding is that there are an increasing number of larger firms buying small/regional firms with an eye on the microbusiness market - ie apply a standard set of accounting tools and processes across all your offices/firms, which in theory will lead to efficiencies and - hey presto! - profits. In reality, this doesn't always work for a variety of reasons (KPMG Small Business anyone?), and I think Darren was expressing a certain level of cynicism about whether such operations will succeed in comparison to his new model.

Hope I've managed to translate.

All the best,

Tom

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Replying to TomHerbert:
David Ross
By davidross
16th Sep 2022 17:52

Thanks, Tom, for getting back to me. This still does not explain the word "Concourse" but no matter

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By lh3f9764bg1g
15th Sep 2022 11:30

I wonder . . . . . does anybody have any experience of using Crunch and, if so, what's the verdict?

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By James Green
15th Sep 2022 11:36

So Crunch is Uber and we are all jobbing drivers. Fabulous, the future looks golden.

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By johnjenkins
15th Sep 2022 11:42

Another name for franchising methinks.
What the big boys really should do is to train their staff adequately enough so that they can become partners or start on their own. There just isn't enough proper training, as I, and no doubt many more of us "oldies" received.

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By indomitable
15th Sep 2022 12:09

Interesting.

A few things spring to mind

This probably works for your Personal Service Company but wouldn't work for many of my clients who are SME's with complex bookkeeping, accounting & tax needs

I wonder how much they are paying their subcontractors

I am not sure how I see this model is any different from the other PSC contractor style providers, apart from they are not employing their own staff anymore. Can't see what the big change is or am I missing something?

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By Hugo Fair
15th Sep 2022 12:14

A world where accountants are just units of resource? ... fabulous.

And what happens to continuity of relationship (it's not all just a one-step process)?

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By numbercloud
15th Sep 2022 13:28

No

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By sophiajgs
15th Sep 2022 13:50

Well I am a Crunch client and have been for a couple of years.

They are absolutely brilliant - the staff are friendly, knowledgeable and really supportive. The software is super easy to use (if you want to) or they'll take care of everything for you (if, like me, that's what you prefer).

I definitely feel like I have a good relationship with the account managers I've contacted when I need something. Turnaround times are excellent and only ever held up by me! God the team are patient with me.

Honestly, the whole thing is soooo easy and convenient - someone mentioned Uber on here, well let's face it, that's what many people, me for one, actually want - on demand, on the go, nothing wrong with that. But any time I need a chat or some help then they are there for me. I used to be with traditional accountants and never felt as looked after and supported as I do with Crunch.

Reading this article, I love that this model is set up to fit so well with flexible workers - I'm a working mum myself and need that flexibility. Great to see a firm who understand this market so clearly.

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Replying to sophiajgs:
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By Hugo Fair
15th Sep 2022 14:30

Glad to hear it works for you ... but call me a cynic - if you only signed-up to this site today, how did you hear of this article?
Was it really that fortuitous - or were you, by any chance, 'encouraged' to post here?

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Replying to Hugo Fair:
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By johnjenkins
15th Sep 2022 14:39

It was the "God, the team are patient with me" that got me thinking. Unfortunately this is what will happen if the right training isn't given.

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Replying to Hugo Fair:
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By Paul Crowley
15th Sep 2022 17:38

Hugo
You are a cynic
Just like me and all the others

Could we be in Ruddles territory?

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Replying to Hugo Fair:
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By Winnie Wiggleroom
15th Sep 2022 17:43

Now if only there was some kind of moderating system on here where these things could be investigated properly....

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Replying to sophiajgs:
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By indomitable
15th Sep 2022 14:50

Curious to understand why a crunch non-accountant client would sign up to accounting web and post what appears to be a review of crunch.

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Replying to indomitable:
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By johnjenkins
15th Sep 2022 15:12

How about we get our clients to sign up and leave a review. Perhaps Aweb could dosh out an "excellence" award for who gets the most pages.

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Replying to johnjenkins:
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By indomitable
15th Sep 2022 15:16

Excellent idea

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By Calculatorboy
15th Sep 2022 22:38

How much do they pay ( x grf ) for smaller unincorporated clients who are still living in the stone age. I need to get rid of a few neanderthals to an unsuspecting numpty ..

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GS
By gabisanz
16th Sep 2022 08:02

How very interesting to open my email this morning and find an article that relates to me personally!...I actually have a great working relationship with Crunch since 2015 when I first worked there, I was always impressed by the drive, modern new approach and forward thinking culture. I think every industry and every aspect of our lives is always changing and evolving and so it is great to feel and embrace part of this change. I left my full time position there in 2017 but always stayed in touch. I have immense pleasure to say that I have been a part of this project from the start, it has given me flexibility and the chance to grow my own business and create and open other doors and opportunities that I have not thought about exploring before. May the future be welcome!!!

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Replying to gabisanz:
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By johnjenkins
16th Sep 2022 09:33

When you opened your mail this morning did you find a nice little envelope with a few quid in it as well?

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GS
By gabisanz
16th Sep 2022 08:02

How very interesting to open my email this morning and find an article that relates to me personally!...I actually have a great working relationship with Crunch since 2015 when I first worked there, I was always impressed by the drive, modern new approach and forward thinking culture. I think every industry and every aspect of our lives is always changing and evolving and so it is great to feel and embrace part of this change. I left my full time position there in 2017 but always stayed in touch. I have immense pleasure to say that I have been a part of this project from the start, it has given me flexibility and the chance to grow my own business and create and open other doors and opportunities that I have not thought about exploring before. May the future be welcome!!!

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Replying to gabisanz:
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By johnjenkins
16th Sep 2022 09:34

So you got 2 emails or have you got hiccups?

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Replying to johnjenkins:
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By Hugo Fair
16th Sep 2022 11:22

Be fair ... this is her only post in 7.5 years, so the excitement was probably palpable.

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All Paul Accountants in Leeds
By paulinleeds
16th Sep 2022 12:48

There's no such thing as a 'certified charted accountant', perhaps a chartERed certified accountant.

Second time in two days I've noted the charted spelling. Is it because HM ER had died and left us short on characters.

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Replying to paulinleeds:
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By Paul Crowley
17th Sep 2022 14:28

Brilliant

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Replying to paulinleeds:
Tom Herbert
By Tom Herbert
20th Sep 2022 10:26

Thanks for spotting Paul, that's been switched now.

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Replying to TomHerbert:
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By Paul Crowley
27th Sep 2022 18:47

My pleasure

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