The accounting profession’s technological revolution has produced a veritable universe of new tools and solutions to unlock capacities undreamed of by professionals just one decade ago. Today there is software for virtually any aspect of accounting one might wish to consider. This includes programs not only for the traditional realms of audit and tax but also financial reporting, regulatory compliance, data analytics, business intelligence, revenue recognition, lease liability calculations, ESG reporting and more. That’s not even considering the wider range of solutions for things like payroll, expense management, time tracking, accounts both payable and receivable and the myriad other products that fill the business world.
But is it all too much?
While the panoply of products available to the modern accountant is encouraging, some thought leaders have expressed concern that the sheer number of applications is starting to bog down processes as professionals continually switch between programs that often don’t communicate with each other.
Randy Johnston, executive vice president and shareholder of K2 Enterprises, noted that a typical CPA firm will have between 75 and 100 applications in use, which he feels is just too many. Between the expense of having that many licenses, plus the hours needed to train accountants on the appropriate programs, as well as the necessary effort of IT staff to maintain them, tools that once been touted as creating efficiencies are starting to eat away at them instead.
“Tools used more comprehensively would be better. There would be less to learn, less to maintain, less expensive to license and, frankly, more would get done in less time with less effort. On the concurring side of that, people may want to get very specific results with very specific tools, but a lot of these tools are too limited in what they can do,” he said.
Jennifer Wilson, who leads Convergence Coaching, raised a similar point, saying that she’d recently seen a client who complained about the sheer number of programs needed to find all the communications from their team between Sharepoint, Teams, email, social media and even text messages. The number of ways people can now communicate, she said, is both “awesome and challenging.”
She said problems like this are being experienced by accountants in all practice areas, from tax to audit to advisory. There is widespread recognition that the sheer number of applications is a problem, but at the same time firm leaders feel stuck because the hyper-specialized solutions of today are generally the only way to get work done anyway, however inefficiently. The way work is done today, unfortunately, is through numerous different software applications that each live in their own little silo and don’t integrate with each other well.
Wilson said this comes from a “best of breed” mindset where people focus more on building the best possible way to do one specific thing. So, one developer will make the best possible software for finding and applying tax credits, while another developer will make the best possible software for populating returns, while a third developer will make the best possible software for managing those returns through the tax year; a practitioner in such a scenario might find themselves in a situation where they’re using all three programs for a single client, constantly switching between them in different parts of the process.
The current alternative to this, though, is a sort of jack-of-all-trades-master-of-none situation where, say, a top-of-the-line tax software provider will add capabilities by “bolting something on” its core engine in a way that, yes, does provide some additional capacity but not as well as a specialized program.
“Until we have someone design something that addresses more of those things as a combined sort of native product, I think accountants will always have this challenge of having to use multiple software applications. This [problem] has been around since software existed. Is it one-stop-shop where you get one product trying to do all things, or is it best-of-breed where you try to do all these different pieces and use a different program for each piece?” she said.
Until that happens, said Wilson, firms are sort of stuck.
While Wilson was hesitant to say if this problem would ever be solved for good, Donny Shimamoto, founder and managing director of IntrapriseTechKnowledgies, was confident the market would eventually hear consumers and provide the more integrated solutions professionals today are craving. This can be seen in the current wave of new integrations and compatibilities announced near-daily from various software developers.
“Many software providers are finally realizing that they can’t just provide niche functionality but rather need to address the need of at least a complete function. For example, we previously saw separate apps for accounts payable, cash disbursements, corporate cards, and expense reporting. Now we are seeing apps that incorporate all of these in one app,” he said.
Johnston, though, warned that it is perfectly possible for firms to go too far in this direction too and cautioned against replacing the current chaotic morass of programs with a digital monoculture. “A more robust tool may actually do better, but you’ve got to watch that too because sometimes a monolithic tool doesn’t do the best of anything,” he said.
This story is part of an Accounting Today series called “The Frontier,” where we explore the cutting edge of accounting technology through conversations with thought leaders across the country, who will share with us their observations, hopes, concerns and even a few predictions here and there. We’ll see you at the Frontier.
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