Practice management in the coronavirus era
The onset of coronavirus and lockdown orders in late March intensified interest in practice management. John Stokdyk and Maddy Christopher track how software tools are responding to new challenges and consider the longer-term prospects for practice automation.
Traditionally spring is when an accountancy partner’s thoughts turn to improving practice processes and reviewing their software options.
Self assessment season exposes stress points in how the practice is organised. In the February aftermath this year, our What would you do differently survey found that 23% of respondents who had good tax season experiences this year had made improvements that made their processes run more smoothly. Yet 60% of practitioners surveyed did not intend to implement any improvements this year.
The onset of Covid-19 in March changed the picture completely. By the end of the month, traffic on the subject in Any Answers had quadrupled since February. On closer examination, accountants were struggling with working from home while fending off client queries about all the business support schemes and worrying about how they were going to charge and collect fees during the crisis.
Practice software developers saw the shifts too. AccountancyManager reported that the number of emails dispatched by accountants to clients via its program had surged 430% by the end of March compared to the previous month. Text message traffic had also doubled.
Onkho founder Emanaur Rahman said his customers had been building more custom workflows and sending communications to specific categories of their clients during the past month.
Yet the level of Any Answers practice management traffic fell away dramatically in April as the realities of advising clients on loans, grants, job retention, self employed income support monopolised accountants’ time. They also had their own cashflow issues. As clients struggled and cancelled direct debits or negotiated over fees due, firms put their own finances on an emergency footing. This is not a time for extraneous spending, so any great ideas for investment look to have been moved to the back burner.
Need to streamline
The pressure on firms to streamline will be intense, according to Sage practice product marketing director Chris Downing. “What we’re seeing is like MTD, but compounded 10 times. We’re going through a huge period of legislative change and uncertainty”
Practitioners are operating like the “fifth emergency service” digesting the ever-changing detail surrounding all the coronavirus support measures and working out how clients will be affected, he continued. “They’re squeezing 12 months’ of client contact into a couple of weeks. And sharing knowledge that isn’t fee-generating.”
Accountants still need to think about business as usual tasks like VAT returns, annual accounts, payroll year ends, planning for forthcoming year and P11Ds. “The day job hasn’t stopped. We all know those things will be coming back into play,” said Downing.
The Covid-19 outbreak is pushing back a lot of accounts and tax planning work into the summer, when accountants will need to deliver nine months’ worth of work in six, he continued. While uncertain whether the software spending taps will open up again in the summer, Downing expects a renewed practice efficiency drive over the next 9-18 months “because people have got to do more work in less time”.
Cloud comes into its own
For the past five years AccountingWEB’s annual software survey has been tracking the steady adoption of online tax, accounts production and practice management software.
Jonthan Stobart from AccountancyManager summarised a common view among the new wave cloud practice management software developers: “We all appreciate cloud practice management is the future. In the current climate people are embracing it a little earlier than they intended to. They can keep the practice running as efficiently as if they were working in the office.”
Being able to log in and out from different devices wherever you are is significantly less demanding than replicating PC installations on different machines at home or setting up hosted desktops.
Capium’s Indeveer Tatla went further: “We do not restrict you on staff user licences,” she said. “At a time when accounting firms are furloughing staff or relying on flexible resources to service their clients, it is not practical to have licences attached to specific devices. Accountants having to take on additional software licences during this time are paying a steep price for underused technology.”
Useful crisis tools
As well as dealing with bigger volumes of communications targeted at different client groups, developers such as AccountancyManager and Glide have been responding for requests to support other comms tools including phone calls and SMS texts. Glide has added an integration with Microsoft Office 365 to give better visibility over practice emails. Onkho, too, reports that customers want “more communication management features in our Inbox”.
The same message is coming from IRIS, which is readying up a communication tool called Engage that will offer “client communication as a service”. The client contact app will be offered free to IRIS customers, though mobile network charges will apply to text messages they dispatch.
Developers such as Sage and Capium that also have payroll programs have been building furlough tools into their programs to output the data needed to submit claims to the coronavirus job retention scheme portal.
Elsewhere, Capium is working to add virtual conferencing and synchronised calendars to facilitate remote team working. And Practice Ignition recently added functionality to manage price changes on proposals and payments in bulk. “This has been very popular due to the nature of Covid-19 and the impact on working relationships,” reported Trent McLaren.
Sage’s Chris Downing was tight-lipped about his plans for practice management functionality and concentrated instead on a government funding tool to help accountants and businesses understand what’s available. “Clients can get a better understanding of what’s available to them and accountants love it, because it saves them the time of producing their own flow diagrams setting out the options,” he said.
In an interesting move to expand its reach in the practice market, Sage is offering its accountant customers the recently acquired CakeHR app free of charge. The software gives them a mobile, browser-based solution for timesheets, shift scheduling and similar tasks. “Good old fashioned employee engagement in an easy format is key to creating a sense of normality and mitigating the impact of remote working,” Downing explained.
Need for integration
Alongside the transition to cloud practice systems, demand for integrated suites has been growing too, thanks to MTD. Nearly two-thirds of practice software respondents in our 2019 software survey used an integrated suite. This tendency was more marked among larger firm respondents, but with the launch of its Practice Management module earlier in the spring, Taxfiler greatly expanded the population of integrated cloud tax/practice suite pioneered by the likes of Capium, Nomisma and Sage at the lower end of the market. And more tax and practice functionality is on the way from the likes of Xero and QuickBooks Online.
As we witnessed in March, working from home will have exposed process weak spots for many practitioners. If and when practices do commit to upgrades and overhauls, they are likely to be more interested in adding new modules from existing suppliers to minimise any further disruptions, shifting the advantage further towards suppliers who can give them a full “practice in the cloud” solution.
But niche specialists like Glide and Onkho are not bailing out of the race just yet. This spring they’ve been leaning even more heavily on Zapier for integration with existing practice systems. Onkho uses Zapier to support contacts, proposals and time recording apps and integrates with popular practice tools such as Xero, QuickBooks, Practice Ignition and Toggl. On behalf of Glide, Ben Norwell explained that users can raise a Xero invoice or access a MyDocSafe file from within the practice program. “These combinations give firms billing, work in progress and analysis functionality they might see from the traditional large suite providers - but with full Xero contact/billing integration on top,” he continued.
“This has proven a successful combination in attracting medium-sized firms that are looking to move to the cloud but can't jump ship without comprehensive workflow, timesheet and billing solutions.”
Document management has been a feature of mature practice management suites like CCH ProSystem, Thomson Reuters ONVIO, IRIS and Sage for many years, but is now being embraced by the new cloud practice generation. While Glide is relying on integration with MyDocSafe, Capium and AccountancyManager now have their own document portals. “If you have an online shared portal and can get signatures, that is going to help in terms of avoiding meetings. And you don’t have to keep an eye on it. As soon as something lands, AccountancyManager will notify you,” said Jonathan Stobart.
Unrelated to coronavirus, but almost as pernicious for many practices are the demands of the fifth money-laundering directive imposed at the beginning of the year. “Accountants are keen to have more robust AML checks built into the platform with sophisticated document management to store this data effectively,” said Capium’s general manager Indeveer Tatla.
Over at IRIS, meanwhile, JF Sullivan says the company is working feverishly to deliver one of the emerging requirements for an integrated practice: the single client view dashboard.
Whatever happened to workflow?
Practice workflow tools remain elusive. While some developers such as AccountancyManager, Capium, Glide and Onkho have detected signs of activity, workflow automation is mainly confined to larger firms and early adopter small practices. Those firms that have already put digital workflows in place will be using them, but others may not have the time to design and implement new digital workflows while under such intense pressure from clients.
Practice Ignition has proved the tools are effective for building client proposals and onboarding them and IRIS plans to move into this territory, so we can expect to see a slow burn in this aspect of automation.
JF Sullivan commented: “In large firms workflow means something very specific around who works on what task at one point, and different job codes for different activities for billing purposes. Workflow would be able to control that - but not necessarily in Taxfiler practices.”
Occupying the middle ground, Glide’s Ben Norwell was more bullish on the subject. By offering a connector to Wolters Kluwer (CCH) and Thomson Reuters (Digita), with IRIS on the way, he said: “Workflow management remains the best option for all practice sizes where they expect a high level of control and ability to configure a system to get a bespoke feel.”
Strength in diversity
The diversity of practice software approaches and variety of tools available makes any decision harder for practitioners. We always emphasise in software comparisons that the trick isn’t to hunt for the “best” program, but the one that best fits your needs and budget.
With demand for productivity improvements building, but sales still sluggish in the industry Sage’s Chris Downing nevertheless sees this diversity as a sign of strength: “It creates opportunity. People identify gaps in the market and this drives performance. We’ll see further innovation in the market from all the vendors trying to serve their customer bases in ways that will help them work smarter, with multiple vendors, and free up their time.”
What are your practice management software plans this spring? Are you planning to tackle the bottlenecks you've discovered when the lockdown pressure eases? Share your thoughts and software requirements by commenting below - and don't forget to add your ratings to this year's software survey (when you have time)
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