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5 signs you’ve outgrown your practice management system

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By Steve Templeton, Founder & President, PracticePro 365

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As accounting firms have expanded in recent years, firm leaders have struggled to get the performance they need from their existing practice management systems. Gone are the days when separate systems for billing, internal accounting, client relationship management (CRM) and project management could meet the demands of growth-oriented accounting firms.

Today’s leading firms draw on business intelligence that spans offices and functions to inform everything from day-to-day project management to strategic business decisions with long-term ramifications. Managing partners are looking at their PM systems through a new lens and demanding that they become more productive, accomplish more and work more efficiently — all so that the firm can focus on its real business of serving clients.

Yoked-together point solutions simply can’t deliver the performance that progressive firms require. But change isn’t easy or cost-free, so firm leaders frequently postpone the decision to upgrade even when the existing system is clearly not serving as well as it once did. How can firm leaders determine the best time for change? The following five signs indicate that the moment has arrived — or long passed.

  1. Constant patching of tenuous connections between point solutions. The need for timely and comprehensive data has challenged the limits of PM software, pushing individual firms and partners to create innovative ways of linking data stored in different silos. Though often impressively engineered, these tools for cobbling together disparate data sources represent a failure of PM software. If the firm is investing time in patching, tweaking and stitching together information just to get a clear picture of what’s going on, that’s a clear sign that it’s time for a PM system upgrade.
  2. Decreasing ability to course-correct. How much profit are you writing off due to inaccurate or inaccessible information? Lack of visibility into project status, time spent, and other key information means mistakes slip by. When leaders can’t see critical data, they can’t correct course during the engagement. As a result, they face a no-win situation: present clients with a fee increase after the fact or eat the loss. If unmet visibility needs are hurting profitability, a more capable PM system is definitely in order.
  3. Disjointed information damaging the client experience. If partners and marketers across the firm can’t access the same client relationship data and see an inclusive history of engagements, firm connections, communications and touches, the client experience suffers. Disjointed data that leads to client attrition or negative feedback signals that the firm needs a new PM system — one that incorporates full CRM capability.
  4. Increasing discrepancies in data from different stakeholders. One meeting, one question, three different answers. That’s the unfortunate situation for firms that rely on an inadequate PM system. How much revenue is the firm generating by practice area? By industry? Which partners or projects created the most profit last year? In many cases, this kind of information is nonexistent or almost impossible to tease out. If analyzing revenue (or other business intelligence) takes superhuman effort and excessive time, the firm requires a more full-featured PM system.
  5. Concerns about downtime. If a natural disaster, a power outage or other threat to local servers can bring work to a halt, the firm is vulnerable to costly and disruptive delays. Such external factors could spark problems that persist long after the original issue is resolved. PM systems that limit accessibility based on device or location won’t cut it anymore, at least not for a busy accounting firm. Firms that haven’t yet adopted a system with secure, cloud-based connections and anytime-anywhere access for all kinds of devices are putting performance and profit at significant unnecessary risk, and should seriously consider upgrading.

All five of these worrisome signs indicate that an accounting firm is missing out on opportunities for enhanced growth and profitability. If you recognize your own PM system in this list, you may be wasting resources that could be better spent on billable work and growth initiatives. The sooner you make the move to a more functional system, the more quickly you’ll be able to redirect those resources to generating revenue, delivering improved client service and creating sustainable firm growth.

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