How to buy small business software: getting it right

Software for a smaller practice falls into two main types ­ specialist practice software and general applications. The specialist applications help run the firm’s own systems and deal with specific service areas such as bookkeeping and accounts production, tax, bureau payroll and company secretarial work.

Practices will also need to use the ‘normal’ office applications that most other businesses use to cover word processing, email and personal information management, web browsing and of course spreadsheet modelling.

Whether considering the specialist or the general software, many of the principles are the same. One of the most important areas to consider is training and implementation. Most organisations would be better off buying the wrong software and implementing it properly and providing the right training than they would be by choosing the best software but failing to make sure their staff know how to use it. Choosing the right software with correct implementation and training is the ideal approach. Specialist applications are going to need continuing support and updating ­ particularly in a profession that is so much at the mercy of external regulations. It’s crucial to have confidence in the ability of the supplier to support and maintain its application adequately.

One element of the evaluation that should never be ignored is contacting other users of the software, preferably users of a similar type to your own firm and who are likely to use the software in a similar way.
There are some specific issues related to accountant’s specialist applications. Deadlines for online filing both of tax and accounting information are rapidly approaching.

The way the system will cope with developments in online filing and XBRL will be crucial. In addition, a good document and knowledge management system could have a substantial and direct effect on the quality of client service.

Those buying software for practice have always faced the choice of buying an integrated system from a single supplier or going for the ‘best of breed’ approach, which is likely to involve products from several suppliers. Hopefully, the xAPL standard for sharing data between products from different suppliers may eventually allow practices to choose what they consider the best individual packages without sacrificing the benefits of integration.

Resources

• Several software suppliers have ‘clubs’ aimed at practices that provide beneficial access to software and support in return for promotion of products to the accountants’ clients. See Microsoft, Sage and Iris for examples.
• For more on IT purchasing go to softworld.co.uk/af
• The ICAEW’s accredited product scheme includes several categories of software specific to accountancy practice (icaew.com). The ICAEW IT faculty conducts a periodic survey into the usage of software in accountancy practices which includes a recommendation rating based on the responses of hundreds of accountants in practice.
  

John Court is head of the ICEAW’s IT Faculty and Simon Hurst, vice chairman. The xAPL standard is an XML based standard for the interchange of client information agreed between the major suppliers of practice software in the UK with the participation of the ICAEW’s IT Faculty.

1. Software choice has recently become a lot more complicated, because the growing importance of online solutions and software as a service should not be under-estimated. For a smaller practice, an online solution could be ideal, replacing the need for extensive initial and ongoing investment in complicated IT infrastructure and maintenance with the ability to access the required systems from anywhere with any computer capable of running a web browser. The other main benefit of this approach is the ability to easily share data with other members of the organisation, or clients.

2. There are drawbacks – it does mean entrusting the firm’s own data and that of its clients to the internet – although there is probably a good argument that it might be safer there than on an internal server connected to the internet. The firm also becomes dependent on the reliability and speed of the available internet connection. For now, the biggest drawback is probably the lack of purpose-written online solutions for the specialist applications.

3. As well as online solutions there are open source options – though the desirability of compatibility with clients’ systems and with specialist software packages, as well as the familiarity of existing and future employees with Microsoft Office make it difficult not to go with the Microsoft option. Incidentally, any small practice that is intending to use Microsoft should investigate the Microsoft Action Pack although eligibility requirements may not be entirely straightforward. One of the most popular open source options is Openoffice.org, which is broadly used as an alternative to Microsoft Office.

Schemes / forums / programmes

It may be the case that the ‘traditional’ approach to software selection, involving detailed analysis of requirements and the creation of an extensive invitation to tender, is now little-used – particularly in smaller organisations. But some of the reasons for this approach are still every bit as relevant. Attending product demonstrations without a clear idea of what you need a system to do for your particular organisation can increase the danger of being seduced by clever product features to the detriment of addressing the basics efficiently.

Accordingly, it’s a good idea to put together a shopping list of requirements against which each product can be evaluated. While it’s sensible to take little for granted, current software products are likely to be able to cope well with standard requirements, so the shopping list should concentrate on particularly important areas, or areas where the business considers its requirements to be in some way different to those of other companies.

When compiling the list of requirements, it’s sensible to consult widely. A system imposed on users who feel they’ve had no say in its choice is far less likely to be a success than one where everyone feels committed to making it work.