Building a technology stack for an accounting firm is like completing a 1,000-piece jigsaw puzzle. It seems really intimidating when you begin, but when you start creating the border, and then slowly filling in the picture from the outside in, it starts to come together very quickly. And then you can walk away from the puzzle, and come back to it as wanted — and when you’re done, you realize that it was easier than you thought it would be at the start.
Despite its nomenclature, a tech stack is more like a puzzle than a Jenga tower. Removing one piece should not cause the whole system to tumble. Rather, the stack is a deliberately built system that makes room for new technology when needed and available, and isn’t stuck on using the same old tech just because “that’s the way we’ve always done it.”
The analogy of a puzzle isn’t perfect, though — an accounting firm isn’t ever “done” building a tech stack. There are always new technologies and capabilities becoming available that can add to or replace certain pieces of the stack. But overall, the tech stack at any given accounting firm does have a general “shape” to it.
But let’s start at the beginning: A tech stack in accounting firms is simply a collection of apps, usually that all connect to or complement a central accounting software platform in some way, to make the operations of a firm work smoothly. Typically, a firm will start with selecting their central platform for the service they’re providing, whether it’s accounting, bookkeeping, tax preparation, audit, or something else, and then select apps to support their additional services as needed.
For instance, a firm serving small-business clients for traditional outsourced accounting services will use an accounting software platform such as QuickBooks, Xero or Sage Intacct; if their client businesses have employees, a payroll app will be a logical addition to their stack, as are time sheets; and bill pay will be desirable to make payment from clients easier. It’s in this logical, natural way that a tech stack is built.
Stack 1 and stack 2
Oftentimes, a firm will have, broadly, two different stacks: one for internal firm use, and one that is client-facing. Firms that service niche verticals, for instance, will gather a collection of industry-specific apps their clients may use in order to serve their clients well.
For example, Jay Kimelman, chief accounting officer of his firm, The Digital CPA, serves e-commerce companies, which have a specific set of technology needs. Using Xero as his central accounting platform, Kimelman also uses A2X Accounting, which is an automated accounting app specifically built to serve Amazon sellers. The app tackles Amazon marketplace sales, fees, cost of goods sold, and “Fulfilled by Amazon” inventory. He uses two additional apps to handle inventory: Unleashed and Dear Inventory.
“For the client-facing apps, it’s important to understand the value of truly ‘niching up,’” Kimelman said, “And understanding all the players in the industries you’re working in. In my case, I’m working with e-commerce and I’m sticking with that, so knowing how inventory apps differ, and which one is better for different situations, is important to making you very successful.”
As Kimelman demonstrates, a tech stack can also include more than one app that serves the same or similar function. Of course, firms should aim to avoid this if the apps are completely redundant, but sometimes a new client will already be using a certain app and be perhaps too large or dependent on it to switch; as a firm, you have to decide whether it’s worth that client’s business to adopt that duplicate app.
Dawn Brolin, CEO and founder of Powerful Accounting, has a large client that came to her using project management software called Asana.
“We had never used it before for project tracking, and so we needed to learn it,” she said. “The majority of our clients embrace what we do and use our platforms, but we do have to adapt in some cases like with Asana. And sometimes by learning it, we like it and we implement it.”
Brolin and Kimelman agreed that having a working knowledge of the different apps available in the marketplace ensures that your firm is always using the best app available. It also allows you, as a client of the software provider, to suggest features and upgrades that you may want from them.
Having a good client relationship with the providers of the apps in your stack is invaluable. In addition to giving you a working knowledge of the apps in the space, shopping around for your next solution also allows your firm to figure out what kind of support you can expect from the providers.
Kimelman explains that most app providers will provide a demo and/or a free trial period. If they don’t, he said, it’s appropriate to ask for one. And if the 15- or 30-day free trial is not enough time to properly get to know the solution — and Kimelman thinks it often isn’t — it’s also appropriate to request an extension, explaining the reason for doing so.
“In this way you can vet how quickly they respond, what the support is like, what their documentation is like, and whether it’s easy to use,” he said.
On premise, or in the cloud?
Kimelman has built a stack that is entirely cloud-based, or online. This works well for smaller, nimble firms, and if your firm is building a stack from the ground up, it makes sense in 2019 to consider an entirely cloud-based ecosystem.
Reasons to rely on desktop software exist, however, and firms may choose to build an ecosystem around, for example, QuickBooks Desktop. Some on-premise systems offer certain capabilities that their cloud equivalent may not yet have. Selecting a cloud-hosting solution, however, can alleviate the issue of not being able to access the system anytime from anywhere.
Some examples of accounting-specialized cloud-hosting providers are Cetrom, Cloud9 Real Time (now owned by AbacusNext), Cloudvara, Right Networks and Xcentric. Cloud hosting can be viewed as something of a stepping stone between on-premise and online software, and allows a firm to host all of its myriad apps in a remotely accessible location, even if some of those apps may not be cloud-enabled.
Another benefit of cloud hosting is that the provider often offers additional security and redundancy that a smaller firm may not be able or willing to invest in. All of the companies noted above have physical servers in multiple locations, so if some unforeseen event damages one location, another one remains up and running. They also have physical and virtual security measures in place, as well as backups in case of data corruption. These types of precautions can be expensive for small firms to provide themselves.
Beyond the selection and curation of the apps in a stack, considerations such as hosting and security play a big part in building a stack as well. As Brolin said, “A tech stack is almost like a business plan — it’s not supposed to be a stagnant item.”
Over time, a firm will subtract from and add to its stack, and the idea is to do it carefully so the ecosystem is built deliberately. Ideally at the end, your stack will create a foundation for robust services, and will allow the firm to operate efficiently, maximizing profit and value.
