Editorial team AccountingWEB.co.uk
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Survey: Practice software at the crossroads

After the year we’ve had, nobody is keen to make many predictions about the future of accountancy. But that’s not stopping AccountingWEB from testing out a few theories about where practice software is heading – and you can provide the evidence to put us on the right path.

19th Oct 2020
Editorial team AccountingWEB.co.uk
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Since the beginning of the year AccountingWEB has been watching the monthly shifts in traffic through our Any Answers pages to see which issues were dominating discussions among accountants.

The coronavirus came along like an earthquake in March to shake almost every other topic off the chart, but once we looked below the surface some interesting behaviours emerged:

  • Tentative trends such as working from home and online meetings with clients became business as usual overnight
  • The arguments against using cloud bookkeeping, tax and practice applications started to sound a bit silly when everyone was working remotely
  • Practice management issues such as client and staff comms, billing and HR exploded into life as the UK went into lockdown, but then fell away as they got to grips with even more pressing concerns such as trying to help client businesses stay alive by preparing loan and furlough grant applications.

One of the theories we advanced over the summer was that the crisis overwhelmed the traditional spring software review season for practitioners and that the industry effectively lost out on one of its key revenue-generating periods.

Several suppliers have confirmed our suspicions, but not Practice Ignition UK and European general manager Emma Crawford-Falekaono. “Quite the reverse,” she informed us in a recent AccountingWEB Live interview.

“We saw a lot of uptake from practices that needed to make adjustments for working from home. Remote working exposed some of the flaws in their processes and they needed better visibility on where their proposals were and billing to ensure that their revenue was still coming through.”

Cloud practice and tax tools

Compared to last year, votes for TaxCalc and BTCSoftware have held in the tax software category, with just under 50% of the current vote, but Practice Ignition’s testimony about the growth of cloud practice management is supported by current voting, in which more than two-thirds of ratings in that category have been posted for smaller, independent cloud providers including PI, Capium, AccountancyManager, Senta and Uku.

Between them Sage, BTCSoftware and TaxCalc can currently muster 23% of the ratings.

Fewer users have shown up to rate the more established tax and practice suite providers such as IRIS, Sage, Wolters Kluwer (CCH) and Thomson Reuters.

The current pattern of voting in these categories add a new twist to the long-running tussle between “best of breed” separate apps and these larger, integrated practice suites. Last year saw the suite population jump significantly, partly on the back of integrated cloud offerings from Capium and Taxfiler, but also we suspect driven by practices looking for the easiest way to update their internal systems to cope with the new MTD for VAT workload.

We will need to dig into ratings from individual firms to clarify exactly what’s happening, but the resurgence in 2020 of specialist practice management tools may have reversed that trend.

Have those major suite players genuinely slipped down the league table within the AccountingWEB popular, or have their customers been too busy with other issues to rate the applications?

This is where we need your help. If you can spare just a few minutes to participate in this online software sampling exercise, we will use the figures to hand out our usual software awards as well as publish the findings in our Software Reviews section.

Have your say in the 2020 survey!

Replies (3)

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By Rgab1947
20th Oct 2020 10:06

The large practice software providers are losing the plot with desktop and "fake" cloud software. Fake being the desktop version put on a drive in the cloud. Its slow and has lag and give none of the benefits of a full cloud based integrated package.

However they are sophisticated and suit the larger companies very well.

Covid as you rightly point out has shown that cloud is the way to go. There are plenty solutions out there and if using QuickBooks, Xero or Freeagent or any of the others combined with AP, CT etc. then the need to be in an office fast dissapears.

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By NewACA
20th Oct 2020 10:45

I think the more volumous voting for cloud providers is being provided by the fact there are many more micro-practices than larger practices of £300k+ turnover firms.

In the past, micro-practices had all their software on their desktop (using IRIS and Sage 50), but now a lot of them have moved to the cloud, quite possibly also as the micro-firms have a shorter-life span, and so many more are newer to accounting, so have set up their software more recently.

The larger firms have no need of the cloud, as they are big enough to organise their own "private" cloud: dedicated server(s) accessible anywhere and at all times wherever staff are, and have desktop software on those servers. When I say larger firms, I imagine those of over £300k turnover plus on average.

Another reason why the larger firms do not use the cloud software, is because the cloud software is very basic. This is true not only for the likes of xero (say compared to the desktop Sage50 bookkeeping) but also for products such as TaxFiler compared to the IRIS suite. Larger firms tend to be more aware of and need more comprehensive products (less so in need of "vanilla flavour offerings") than the micro-firms that have more basic client requirements, hence stick with the more established software providers.

Therefore, it is not that the larger firms are "behind" the micro-firms in cloud take-up, but have different needs being already fully met by the more established providers and their own (or outsourced) IT department.

Larger firms prefer (rightly) to be in control of their own cloud (which could just be a server in their own building, but available from anywhere), so that they are not reliant on another provider holding all their client data.

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By North East Accountant
22nd Oct 2020 16:33

The future is proper cloud.

All the big incumbents have so far failed to invest enough in their cloud offering, preferring to continue coining it in from their desktop platforms, with half baked hybrid cloud connected setups.

Who will be the next "Blockbuster" and who the next "Netflix".

I remember nipping down to blockbusters of a Saturday evening and getting a few videos out...... and now we virtually only watch Netflix. How times change.

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