Which is best for a small accountancy firm? Best of breed vs ‘does everything’ Practice Management Software
A question that has been pondered by many accounting practices of all shapes and sizes for a very long time is whether to buy a ‘does everything’ type practice management software or to choose the specialists in each area. Like a lot of things, there is no right answer. To help you decide which is best for you and your small accountancy firm we’ve outlined the advantages and disadvantages of each.
Best of Breed Software
Best of breed software are the best performers in their niche. Think of them as the crème de la crème, performing specialised functions to provide you with the top solution in the market. Another way to look at this would be to consider the metaphor of sports footwear. You could buy a pair of trainers which you use for the gym, running outside, netball, squash, tennis and walking. You get the idea. However, you wouldn’t quite have the grip you need for netball or the ankle support, or the shock absorbency of the best running shoes. Or you could decide to buy specialist shoes for running, the gym, netball etc.
Many of the most successful cloud accounting firms tend to opt for best of breed practice management software as it allows them to have the best of everything. They may have a quoting tool from one provider, an onboarding tool from another provider and a workflow tool from another. For example, using Xero workpapers, Xero Practice Manager, Xero, Practice Ignition, TaxCalc and GoCardless all together. However there are 5 things you need to do BEFORE you invest in Practice Management Software for your firm. Click here to download our Practice Management Cheatsheet to find out the 5 things (or risk wasting time and money)
While this is very valuable for the running of the firm, they do, however, need to have multiple best of breed solutions to work together to create a complete end-to-end practice management software package.
Naturally, this comes with its advantages and disadvantages.
- In-depth functionality and high-quality performance.
- Offers the latest unique features and functions.
- Increases efficiency and productivity within your firm.
- Allows companies to adapt to shifts in markets or customer preferences.
- Offers scalability and dynamism when your firm grows.
- Offers more opportunity for differentiation among competitors.
- Offers expert industry knowledge which you can leverage for your firm and to help your customers.
- Cross training on multiple systems will cost extra and take time.
- Generally a lot more expensive to purchase than just paying for one practice management software.
- No one port of call for support and each vendor may offer a different level of support.
- Takes time to integrate each software into your firm.
- The software may not match your exact business requirements so processes may need to be changed.
- Users may need to tab through multiple apps and interfaces in the course of their working day.
- Could result in inconsistent information across departments.
- May have to implement a full scale enterprise system down the road to accommodate corporate growth.
‘Does Everything’ Software
In contrast to best of breed, ‘does everything’ software does as it says on the tin. Think of them as the “Jack of all trades” where they offer everything you will need to run your accountancy firm. Accountancy Manager, Onvio from Thomson Reuters and the IRIS suite of practice management tools are good examples of ‘Does Everything’ software.
So you’re probably thinking, why would I opt for a Jack of all trades when I could have experts? Put simply: ease and convenience.
Having everything you need on one central software is incredibly efficient.
- Easy to install and use across the firm
- Requires minimal training and man hours as there’s only one central database
- Offers consistent level of support where there is one port of call
- Reduces costs by having a single solution instead of buying each application separately
- Offers the ability to share information between applications
- Each application is the full-featured version
- Offers consistent interface from one module to another
- Offers the option to install all of the programs at the same time or only the programs you want to use
- Future upgrades can update each application all at the same time
It does, however, also come with many disadvantages…
- Not all systems from the single vendor may be of equal quality or standard
- Not all systems may provide the functionality that you require
- Each system is limited to basic features and functionality
- Usually large upfront costs
- Maintenance and replacement costs can run high
- Installation of the entire suite takes up a large amount of storage space
- May be purchasing more software than you actually need
- May not be compatible with other popular business software
- May limited scalability and growth of your firm
How do I choose what is best for my accountancy firm?
When choosing an accounting practice management software, the question shouldn’t be ‘best of breed’ or ‘does everything?’ You should be asking yourself “which software solution will help me gain the strategic business advantage I’m after?”
Only when you identify where you want to take your firm, can you choose the best solution that will help you achieve this.
To help you make the best decision for you and your firm, try to:-
- Identify your requirements
- Differentiate between essential functions and desirable functions
- Research software and give yourself options
- Look at case studies or speak to practices of a similar size who have used this software
- Think about quality, the need for training, integration, support, updates, major benefits and limitations before making a final decision
Your requirements will change as your practice grows so you need practice management software that will accommodate this growth and grow with you.