There is no doubt in the fact that we have transitioned into a digital era. Right from how we make payments to perform our daily grocery shopping – all it takes is a click of a few buttons. While the world has largely adopted the technological shift, this evolution has been slower for the accounting industry. Many accounting and finance leaders are trained to work within traditional systems. The problem is those systems are no longer compatible with today’s business needs. The leaders understand that their outdated practice needs to go and that they need to heavily add technology as a part of their operations. However, they fear, they struggle.
And because of a rigid mindset, several accounting firms find themselves grappling with the gaps in their tech infrastructure. These gaps lead to a lack of productivity, inefficiency, and burnout among their fellow employees. As an accounting firm owner, you have to stay up with the latest trends in technology. If you can bridge the gap between technology and overall operations, the power of technology fuels your growth and profitability. Keeping up with the ever-evolving nature of accounting practices can be challenging when you do not have a strategy to tackle these issues and have a proper governance structure.
In this article by Finsmart Accounting – trusted globally for outsourced accounting services, we will share everything about bridging the gap between accounting firms and tech vendors.
Understanding the gaps
The first step to bridging the gap between accounting firms and tech vendors is to acknowledge there is a problem. Being ignorant, indifferent, or rigid does not solve the purpose. The fundamental difference lies in the perspective and priorities. While accounting firms are focused on delivering accuracy, high-quality services, and maintaining compliance, tech vendors are driven by innovation and disruption. While the accounting firms do away with the traditional approach, for tech vendors it is all about pushing the boundaries. This difference in alignment is what creates the main gap.
Most accounting firms, today, have a tool in place – practice management, project collaboration, or otherwise. The problem is that sometimes these tools do not provide holistic services. Having a tech that addresses the bottleneck is important. The communication and perspective differences between the accounting firm owners and tech vendors cause confusion, delays, mistakes, and a host of other problems.
Challenges faced by accounting firms:
As we delve deeper into the accounting and tech vendor gaps, it is essential to understand that the challenges they face are different. For accounting firms, it is about adopting and integrating new technologies into their workflows and operations. The top challenges include:
– Difficulty adapting to change:
The accounting industry, in itself, is traditional in nature. Accounting professionals, including the top financial leaders, often resist change as they feel they might lose out on critical data or make unwanted errors. This makes it difficult for firms to learn about and incorporate new technologies.
– Complexity and integration issues:
Many accounting firms perform some of the most complex operations. This leads to an increased difficulty in integrating new tech seamlessly. Compatibility and data migration issues increase the problems even further. For accounting firms, making time to seek technology that allows them to effectively incorporate complex processes is yet another challenge.
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– Cost concerns:
For accounting firm leaders and CFOs, optimizing will always be the top priority. And new technology does involve a significant amount of cost – upfront investment, maintenance cost, etc. If it is a small accounting firm, it further limits its chance to adapt to new technology, given its budget constraints.
– Lack of technological awareness and expertise:
Most accounting professionals and firm leaders lack technological awareness. The expertise required to shortlist, evaluate, implement, and keep a constant track of what is working and what doesn’t lead to a lack of technological incorporation.
Now that we are familiar with challenges faced by accounting firms, let’s discover some bottlenecks encountered by tech vendors!
Challenges for Tech Vendors
It is not just the accounting firms who face significant challenges, tech vendors also have their share of struggles. Their top challenges include:
– Restricted understanding of the accounting process:
Most often tech vendors lack a deep understanding of the complexities of the accounting workflows, their operations, compliance, and regulatory needs. Hence, the solutions they provide are often not customized to meet the needs of the accounting firms.
– Challenges in trust building:
Accounting firms constantly deal with sensitive, financial information. This makes them more cautious when dealing with technology vendors. They sometimes find themselves at a crossroads on whether they can trust the tech partners. Building trust and credibility is a key challenge for tech vendors who deal with accounting firms.
– Long sales cycle:
The sales cycle in the accounting industry is often longer than in any other sector. For accounting firms, it is very important to evaluate the potential impact of new technologies on their operations before they can decide on the services
Read on to learn how to bridge the gap between accounting firms and tech vendors.
How to bridge the gap?
Bridging the gap between the accounting and tech vendors comes with its own set of challenges. However, accounting firms need to adapt to technology to succeed in the fast-paced business environment. Here are top tips that can help:
– Develop an overall strategic plan for your firm:
Every firm is unique in some way. Having a strategic plan helps pave a direction for the accounting firm. The focus of the strategy should be on growth initiatives and be able to drive technological decisions. If your firm doesn’t already have one in place, make that the focus of this financial year. While you curate the plan, do not forget to involve the IT department as they are critical in ensuring the right alignment. In case, you have outsourced your IT operations, at least share the results before they get to work.
– Develop a technology plan:
While the overall firm plan works as the center point to formulate technological adaptations, a technological strategy is important to help the team make and implement technological decisions and investments. Share this plan with all the members who will be using this technology. This plan needs to be driven by the IT team, along with collaboration from partners and staff to ensure everyone is on the same page.
– Constant education and training:
Just like accounting firms aren’t sure of everything tech, so is the case for technology vendors. Firms must invest in ongoing education and training programs to equip their employees with the skills and knowledge needed to integrate technology into operations effectively. Similarly, tech vendors can also provide targeted training and resources to ensure accounting professionals and leaders understand the offerings and benefits well. There are multiple events that include both tech and business aspects. This ensures that everyone hears the same information and then realigns if needed. It also allows dedicated time to discuss strategy and utilize new information effectively.
– Setting clear expectations and having an open communication:
Communication is key to a successful partnership. Accounting firm leaders must clearly lay down their requirements and expectations to tech vendors to ensure bridging the accounting and tech vendors gap. Tech vendors should also work closely with the firm leaders to understand the specific challenges and pain points faced by them. Keeping up with the changing times within the accounting landscape can be difficult for both accounting firm leaders and tech vendors. You should also consider joining communities where members from both teams can push beyond the limits of their practice and bring fresh perspectives. This also helps understand if you are walking on the right track.
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– Pilot programs:
Pilot programs and proof of concept initiatives allow accounting firms the opportunity to test new technologies in a controlled environment before they can be sure of their full-scale implementation. This approach allows firms to evaluate the benefits and challenges of technology before they make a significant investment. This model is great for small accounting firms who need to be sure before they make a financial decision.
Bridging the accounting and tech vendors gap: Wrapping up
The gap between accounting firms and tech vendors is real and bigger than most firms realize. Bridging the gap is a continual process that requires time and effort. For both firms and tech vendors it is important to focus on progress first and then on precision. It helps drive innovation and allows both parties to unlock new opportunities. Understanding each others’ perspectives, addressing common challenges, and embracing a collaborative approach can help accounting firms and tech vendors work together, harness the power of technology, and deliver great results.
If you struggle with technological adaptations, outsourcing your accounting practice gives access to a variety of technological expertise. To know more, write to us at connect@finsmartaccounting.com
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Director Growth Strategy & Alliance
Maanoj Shah is a finance and outsourcing expert with strong Business Strategy and Scaling-up experience. Over the last 20 years, he has incubated multiple businesses and helped build global enterprises in verticals as diversified as hospitality, technology, and healthcare.
