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Is Outdated Technology Hurting Your Firm?
Old technologies definitely don’t belong in a modern accounting practice or other firms
Antiques have a place: Museums and private collections. But old technologies definitely don’t belong in a modern accounting practice or other firms. If you walked into a new dentist’s office and found equipment from the 1980s, you would turn around and walk out. Likewise, if you hired a lawyer and found they didn’t use computers, that firm likely wouldn’t earn your business.
Much like the legal and medical professions, the accounting profession is rapidly changing both in terms of the laws regulating them and the best practices used to look after clients effectively. Likewise, technology continues to evolve to meet these needs and the expectations of clients who, in the modern economy, expect instant access to data, and fast reaction times to their service needs. Relying on old technologies to keep up with modern workflow requirements will result in a firm that is unable to operate efficiently, and that will lose the best clients and staff.
Older Tech Means More Downtime
Relying on legacy software programs, whether for accounting, time management, document management, project tracking, payroll, communications, or other tasks, means installing software updates and ensuring servers have the capacity and speed to run those systems. With many disparate operating systems on computers and servers, this inevitably leads to incompatible systems trying to work with each other. If the need for expert support arises, an IT technician may need to visit the firm -- if the company still supports outdated software versions. While waiting on the software fix or technical support, firm staff may be unable to use certain systems.
Cloud-based systems, on the other hand, are automatically updated remotely by professionals who know the ins and outs of the program. They also have experience helping hundreds or thousands of firms implement and get the most out of their systems, and also understand how to best integrate it with other online technologies.
Older Tech Means Greater Risk
When many firms started moving to cloud-based solutions a decade or more ago, initial concerns were over hacking. But time has shown that cloud-based solutions are much less likely to fall victim to unauthorized access. Most use the same data encryption and security protocols as the Department of Defense and international banks. Programs on firm computers, on the other hand, are often left open and accessible to unauthorized users, and in the case of disaster (fire, flood, theft) the data can be lost forever.
If a firm is using old tools for new jobs, they simply won’t have the capability to do tasks as efficiently. A 2016 survey showed that outdated technologies cost U.S. businesses up to $1.8 trillion in wasted productivity.
In the last ten years, productivity in accounting firms has increased. this is largely due to cloud technologies and mobile devices, which allow staff to keep working even when on the go. This also allows management to keep an eye on productivity, reporting and projects -- whether at clients, in the car or in the office. Couple this mobility with increased interactivity between different programs (like time and expense management, invoicing, and project management), and firm managers have greater insight into the nuts and bolts of their firm. This lets them resolve issues more quickly, and keeps staff engaged in the most productive and profitable tasks.
Spreadsheets are Dumb
The computer spreadsheet was invented in 1978 and Excel was invented in 1985. Yes, it has been improved since then, but in the end, spreadsheets are (at best) snapshots of data. Usually, data that had to be manually entered or manipulated on a spreadsheet that someone probably spent hours, days, and weeks “perfecting.” And then, the next week, new data inputs have to be added and it’s time to tweak the thing again. Check out these Five Reasons to Stop Using Spreadsheets.
Modern technology gives much more accurate and automatically populated reporting options, with live data that lets firm management see the ongoing, living and breathing financial health of the firm, or their clients’ businesses.
Losing Clients/Better clients
Back to the dentist/law firm analogy, if your clients can tell that you’re using outdated technologies, will they stay with you? Will you be able to gain clients who are savvy? A recent survey by Microsoft showed that as many as 91% of consumers might stop doing business with a company using old technology. This applies to business consumers, as well.
If your firm isn’t able to provide online access to at least some key data the clients need, or the client can’t electronically share a file with you or provide electronic signatures (where allowed by law), it creates a bottleneck to productivity and communication. Modern technologies should enhance the client relationship and help you communicate, regardless of the day of the week, time zone or geographical location. Even more so, a reliable customer relationship management (CRM) system will help manage the communications that your firm has with each client and ensure consistent messaging.
Missing Out on the Best Staff
Just as clients might be averse to a firm that is technologically stunted, new and experienced accounting staff may also shun the firm. Post-COVID-19, there will be a much greater expectation by firm staff (and other professionals) for flexible work locations. While many firms may move back toward a primarily office-based environment, at least having the technology, processes and knowledge in place to allow remote work -- along with the tools for remote management -- will enable the firm to attract highly qualified staff.
Losing What You’ve Earned
Outdated technology can also cause inaccuracies or logjams in the billing process. Having disconnected systems for tracking time, project issues, client communications and invoicing can result in billing that is wrong or not sufficiently detailed. Or, even worse, you could lose track of important information in the billing process.
Less Financial Stability
If your firm doesn’t have a handle on all of these things, then it is losing control over its future. An accounting firm is expected to be an expert in helping small businesses attain financial clarity. If the firm can’t do that for themselves, with knowledge of all aspects of the productivity and strengths of their practice, they may be perceived by prospective clients as not being able to provide that as a service.
It is so important that, as an accounting firm, you are up-to-date with the latest technologies. Otherwise, you run the risk of getting left behind, losing clients, and being unable to grow.