How can accounting firms help clients with software needs, above and beyond the obvious acquisition and installation of accounting software? This question is being repeated by accountants everywhere as they look for new directions in which to grow their practices and serve their clients.

"Your existing client base is the best source of new business," said Rich Walker, director of accountant and advisor relations for Intuit Inc. "Small business owners look to accountants primarily for traditional services because that's all they know."

Interestingly, only 5 percent of small business respondents to Intuit's 2004 annual accountant and small business study said that they look to their accountants for technological support. However, accountants who responded to the survey indicated that tech support is the third most prevalent service that they provide to clients. Clearly, there is a disparity between the perception of the types of services that clients believe they are receiving from accountants and the actual types of services that accountants are offering their clients.

By making software consulting a more visible service, accountants can expect to be the obvious candidates to fill the role of trusted advisor, not just in the financial arena, but in the technology support arena as well.

The best part of incorporating software consulting into an accounting practice is that the accountant doesn't necessarily have to be a software expert to provide a valuable service. "It's knowing what's out there, what fits the best, what's priced the best, knowing the needs of the client" that provides the key to being a successful software service provider, explained Paul Lundquist, vice president of sales at Open Systems Inc., in Shakopee, Minn. Accountants "owe it to their clients to be educated, since their clients are coming to them as a trusted advisor," Lundquist added.

Intuit recommends that the accountants who support software products such as Intuit's QuickBooks spend a day with a client on the client's premises. "We call them, 'Follow me homes' or 'Follow me to the offices,'" Walker said. "The accountant watches their client work through the day, and by observing them in a new way, they can start to see places where they can help the client to be more productive, and therefore they can provide better services."

Walker said that when he describes this practice to accountants, he tells them, "I don't need you to be an accountant during that period; I need you to be an anthropologist. Step back and observe the behavior of your client." By spending a day in a client's shoes, Walker suggests that accountants can discover how the business is really being run. Perhaps the client is performing a task manually that can be done with a software application, or maybe the accountant can find other shortcuts that can be useful to the client.

There are plenty of areas in which accountants can provide software consulting, beyond the traditional assistance with the choice of an accounting program.

"A true consultant isn't just going to listen to what the client thinks they need, because what the client thinks they need is not always what the client needs," said Annette Rawlinson, president of Indianapolis-based AccounTech Inc.

Like many accounting software consultants, Rawlinson and others on her staff are accountants. "Clients realize there is a lot more that we bring to the table as accountants because we understand business, we've been in business. We bring to the table a knowledge of their business and the ability to translate their needs into a way to help them be more profitable, which could mean reducing expenses or increasing profitability, or it could mean increased efficiencies."

Howdy, partner

Gene Marks, president of The Marks Group PC, in Bala Cynwyd, Pa., recommended that accountants consider encouraging their clients to use customer relationship management applications. "So many people just don't have these applications yet," Marks said. "If accountants point their clients to CRM applications where they can manage customers, you're really doing your client a favor."

Marks also suggested that the best value that accountants can bring to clients "is to tell them what they're seeing out there in the market, what other clients are using. Accountants are out at so many different clients - they are the ones that see what other companies are using successfully."

Marks was critical of accountants who are reluctant to partner with outside software providers. "I've come across so many accountants that are territorial and defensive and get in the way, as opposed to being proactive and not being afraid of letting somebody else in that can also help their client. You're helping your client by bringing in experts."

"Generally, when people start small businesses, they start the business because they have some great idea or they know a lot about the market, but they generally are not financially savvy," said Angela Nadeau, executive vice president for Philadelphia-based CompuData, a firm that specializes in providing business software and technology solutions for small and midsized organizations.

CompuData's motto, "Better technology solutions mean better business," illustrates the company's belief that business owners need technology in order to compete in today's environment. Partnering with accountants provides the software vendor the opportunity to help accountants grow their practices by offering a variety of accounting and other business software options to their clients.

Open System's Lundquist and several others recommend that accountants use a resource provided by Accounting Library, an independent company based in Virginia. Accounting Library has produced a needs-analysis questionnaire for determining what types of software will be useful to a business. For a fee, Accounting Library measures answers to the questionnaire against thousands of features in over 100 products, then ranks the products according to how close they meet the company's needs.

Still on spreadsheets

While software technologies may be second nature to large companies, many smaller companies have yet to get on the bandwagon.

"A lot of companies are still doing spreadsheets," said Jim Plantan, partner at eCapital Advisors, a Minneapolis-based management consulting firm that specializes in corporate performance management. "There are too many errors [with spreadsheet accounting], especially when you get into situations where companies are expanding to the point where they have multiple people contributing information."

Plantan referred to a survey produced in May 2004 by and International Data Corp. regarding small businesses reducing the use of spreadsheets. According to the survey, 118 business leaders indicated that small businesses still rely on spreadsheets to perform key accounting tasks, including revenue recognition, contract management, purchasing, inventory, billing and payroll.

The survey found, however, that 80 percent of respondents agree that these accounting tasks are too critical for businesses to rely on spreadsheets alone, and 63 percent said that they believe spreadsheets are prone to errors. The majority of companies surveyed indicated that they plan to reduce their reliance on spreadsheet-based accounting within 12 months.

Plantan recommended working with clients to produce forecasting tools that can help clients get away from using past-performance-based budgets and get into using rolling forecasts. "There are people that get it and there are people that don't," Plantan said. "It's a process, it's a vision. You can almost tell when you go out there who is going to win the game and who's not."

Somewhere in the marketplace, there is probably a software solution to every possible business problem, but there is also such a thing as software overkill. Walker recommends learning about software applications that can be used as add-ons to existing applications.

In addition, Walker stresses the importance of learning as much as possible about the client's industry. He recommends Financial Research Associates ( and Sageworks ( as places to go for benchmark studies of small businesses, and also suggests that "there are a number of Internet news groups and discussion forums where accountants can talk to each other."

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