Why you need accounting practice management software

As your tax and accounting firm grows, so does its complexity. More staff, clients, decisions, and processes to manage.

This is where accounting practice management software comes into play. If you’re not focused on systems, your growth can multiply your problems.

Working remotely? The need is even stronger. Now, your communication needs to converge somewhere that the entire team can collaborate.

No, practice management software won’t create the systems for you. However, a good solution can give you the structure and organization to grow your firm confidently, and continue providing excellent service to your clients at scale.

This guide is here to offer knowledge and explanation surrounding accounting practice management solutions.

What is accounting practice management software?

Think about the day-to-day of your firm.

• Team communication.
• Client management (onboarding, sending reports, and other tasks).
• Managing the projects and workload.
• Monitoring and improving efficiency.
• Keeping track of all of the above.

On top of that, the profession is in constant change. For your firm to communicate well, deliver value, and stay on top of trends, you need systems in place for organizing projects.

As your team works daily to move data, navigate integrations, and deliver financial reports, it’s possible for your team to feel overwhelmed. The profession is moving quickly, and in the future, it will be difficult for small tax and accounting firms to keep up while using antiquated systems.

For example, think of your staff. Do they have the ability to work remotely? If not, what if they have an opportunity to work at another firm that provides a flexible work schedule.

With a cloud-based practice management solution, your firm can operate seamlessly wherever your team is located. That’s not to say you’ll work completely remote, but the flexibility gives you the freedom to adjust to unexpected circumstances.

Key point: The right accounting practice management software acts as a hub to manage team communication, track client projects, manage deliverables, and keep tabs on key metrics showing how well the team is doing.

What is the purpose of accounting practice management software?

When you start looking for the right solution, you may be tempted to look at a general project management solution. However, you know better than anyone the needs of an accounting firm are unique.

For accounting firms, practice management software should be industry-specific to give you exactly what you need. Each profession has unique needs and processes. This is why practice management software for legal practices will look very different than practice management software for accounting firms. For example, you’ll want to use templates for workflows. A good practice management software tool will provide workflows for training staff and delivering services.

Your practice is already using technology. Email for communication with clients, a messaging platform for the team, and maybe even project management software. All of these are independent — often creating a nightmare of gaps for work and messages to fall through. As a Karbon user explains it, the practice management system provides visibility to stay on top of communication. A comprehensive solution combines most aspects of your business into a single dashboard, of sorts.

What should accounting practice management software include?

Most practice management solutions provide the ability to:

• Automate many of your daily tasks (giving you more time to focus on the more important stuff).
• Tame your inbox (by putting most of your communication within the software by either integrating your email or proprietary communication system).
• Manage workflow (keeping track of all the tasks of every client).
• Increase collaboration (by allowing all of the right people to have access to the files they need, and not the ones they don’t).
• Organize task and project management.
• Track performance (how long it’s taking your team to complete work and whether deadlines are being met).
• Identify bottlenecks (in your service and your growth).
• Track staff capacity and utilization.

The importance of practice management software lies in its ability to truly grow your firm. If you are not consistent in the work you’re providing, you’ll make it nearly impossible to add to your team and grow.

5 quick reasons a practice management software is important

1. The right practice management software will improve client services: A smooth-running practice means your clients get better service, fewer missed deadlines, and increased communication. If the entire firm is using a single piece of software, there are fewer changes for the most common mistakes.
2. The right practice management software will create more time: Every minute saved in email, follow-up, and getting your head wrapped around issues compounds into hours (even days) worth of time each month. This is valuable time you and your management team can spend working on, not in, your business.
3. The right practice management software will improve your team: CPAs and accountants (sometimes) feel like basic bookkeepers and tax preparers. They get time back, too, and your leaders can use it to discuss higher-value services with clients, such as forecasts, advisory services, and budget creation.
4. The right practice management software will increase your revenue: All of these benefits equal a healthier, more profitable accounting business and allows you to improve the sales process. Your clients will be more likely to refer leads to you, you’ll be able to better market your services, and the team will bring in more revenue from those clients.
5. The right practice management software makes you more profitable: To be at your most profitable, you should be tracking results against accurate forecasts, identifying your most effective clients and employees, and know what actions will maximize your resources.

All of this comes from using a software solution to take all operations and collaborations into a single place.

What to look for when evaluating accounting practice management software

Not all solutions in this category are the same. You’ll need to run your top choices through a few considerations before making a decision.

1. Consider your needs as a business 

Most firms want to grow, but the definition varies. Maybe you’re happy with a few CPAs/accountants, and a healthy, yet manageable load of clients. Or, you could think “the sky’s the limit” and want to grow into a sizable organization. The desired trajectory of your practice may influence the type of software you choose to manage things.

What to do: Take the time to really map out your current workflow and communication processes. It will help you project the way your company runs into the solutions you’ll review.

2. Determine your current bottlenecks

You’ll need to take time to reflect on what parts of the business are not functioning at an optimal level. Is work falling behind? Are you struggling with client retention? Is it slow to move new clients through onboarding?

Wherever the primary constraints are, this is where you can look to apply systems and automation to make a massive improvement.

3. Check credentials and support of each solution

Finally, when looking for the best fit for your firm, it’s important to check what others say about the software. You should look for evidence that a particular solution is easy to use and works effectively. Independent review sites (GetApp and G2), or even customer testimonials and case studies from the company itself, are great places to look. Usability is particularly important if you’re a bit of a technophobe. There’s no point investing in a product if you don’t know how to use it to its full advantage.

What to do: Take a look at who’s using a solution, as well as reviews and case studies of those who have used a particular product.