Accountants don't realize that they have more power in their dealings with software providers than they may think; accounting technology thought leader and journalist Seth Fineberg wants to see accountants taking a more proactive approach to the relationship — to the benefit of both sides.
Transcription:
Dan Hood (00:02):
Welcome to On the Air with Accounting Today. I'm editor-in-chief Dan Hood. You know, the days of off the shelf plug and play, set it in, forget it software are long gone. Accountants need to be deeply engaged with the technology tools that they use. And according to Seth Feinberg, they should maybe be thinking about more, being more deeply engaged with the providers of those tools. Here to back that crazy claim up is Seth Fineberg. He's a well-known journalist, consultant, thought leader in the accounting profession, a former editorial chief at Accounting Web and before that, a technology editor at Accounting Today. Seth, thanks for coming back on the podcast.
Seth Fineberg (00:32):
Thanks for having me back, Dan, that last time was, that was a hoot, so thanks for having me back again and really talking about something that's very, very near and dear to my heart. So accounting today did give me my start really talking about uncovering accounting from a technology perspective. I got to know a lot of the companies and businesses and providers and resellers in the space during that time. And really just seeing the evolution, evolution over the couple of decades that I've been covering the profession has been quite a joy. And I think we're at a point now just to, as a preamble to our talk, I think we are currently at a point in just the profession's history where it's rare that you're going to be making any kind of a professional strategic type of decision that does not involve technology. It's even possibly the thing that is going to, looking at your own sort of tech stack and how you work will determine the kinds of clients that you have working with you or even the kind of staff, okay, how are we going to work?
(01:54)
How are we getting work done? Someone who you're looking to hire, they might be kind of scrutinizing that very thing and in a way that it's never been done before. You wouldn't even think of that, oh you know what, yourself guys on Windows, are you using QuickBooks? What licenses do you have? You wouldn't think about that. You just were like, okay, do I have a computer to work on? I do. Okay, do I have a phone? Cool, great. And yeah, the rest was kind of up to you maybe got in your car and visited clients and you had your little, did your rolly, all of your follow the client files, you kind of roll 'em along in a suitcase or maybe a multicard or something like that. You went on a client visit. And I got to see the evolution of from that to, Hey, I just have my laptop and I'll just do my client visit. That way, you know, don't have big binders anymore really. I mean some I think still do, but by and large the organizers every year are, it's electronic.
Dan Hood (03:03):
Well they're depreciating those binders over a third of year life. So they want to, they're still useful.
Seth Fineberg (03:08):
They're still useful to prop open the door. I guess much in the way that the AOL CD is you would a coasts that you would get, it's a nice coaster or I've seen them prop open windows and things like this in the city. They're like, like yeah, I got a good dozen of those. But at any rate, it, it's been really, really exciting to see the evolution. But we are at a, I don't want to say a crossroads, but we're definitely at a pretty crucial time right now where you've as a firm particularly as, particularly mid to larger firms, but definitely even the smaller firms now are like, you know, have these partnerships with the vendor community out there that I think have become strained over time because the agreements that maybe you got into are being, I wouldn't even say renegotiated, I think it's just, it was very, very heavily, I think weighted. And again, no offense to the technology vendor community, but it was very heavily weighted on their end of things. The accounting firm was just, they didn't really think of maybe having their own agreement to say, okay, here I see your terms, well here's mine and maybe it's time for that to happen. But that's kind of where we're at. Yeah,
Dan Hood (04:37):
No, I want to take a step just maybe a slight step back for a second. Sure, yeah, because I think you're right. I think that certainly makes sense that we're at a bit of an inflection point where things may be changing in firms maybe needing to rethink that relationship. But maybe we talk a little bit about what that relationship currently is or up until very recently has been, as you say, it's, it's a little bit stacked in favor of the software vendor or a lot depending on how you look at it. But maybe we would talk about what does that sort of standard vendor accountant relationship look like and is it even a relationship? But I think for a lot of firms, it's not really a relationship. I get my software, that's it. That's not a relationship. What is the current interaction look like?
Seth Fineberg (05:17):
I go to the restaurant or the meal, I don't know. But yeah, it's not
Dan Hood (05:21):
A relationship, it's just dinner.
Seth Fineberg (05:22):
I dinner. I don't know. Yeah, you're absolutely right. But yeah, I mean is over time I think that it has gotten to the point of where the vendors who they need accountants as not just their user base, but really they've used it as this sort of conduit to the small mid-size business community that they ultimately sell to. They need the cpa, they need the accountant to kind of shepherd that along. And historically it's been these different agreements whereby it's like, oh, well you get it a percentage, you sort of become this sort of quasi like sales type of relationship or you get a cut of that, but all a sudden, and that's
Dan Hood (06:18):
Leaving aside straight up resellers. We're not talking about them. We're talking about just to basic accounting firms. You're referring clients. It's not
Seth Fineberg (06:24):
Exactly, but even even basic accounting firms for with some of why you would get into any kind of a vendor relationship of that nature is that it's like, well, you see that okay, well I'm going to benefit because well, I don't have to necessarily pay for that software. My client does. They get the license they to see, they pay for the seats and the contracts with whatever vendors is out there. In these days, subscription pricing has been become more of the norm. Whereas I remember writing about things where I was like, Ooh, subscription pricing, that's a new thing. Versus the software license, which is kind of a finite thing. You have your license for X amount of time and that includes maintenance and includes all these other things and then support. And then over time it's just, okay, well are you going to renew this or not?
(07:26)
And same thing I guess with subscriptions as well, but at the same time it doesn't come with a lot of necessary, the bells and whistles. You just hope that the support is there. But neither here nor there, the accountant really is kind of the middle person party to the game. And then that's the kind of relationship that has existed I think for some years now, is that they're kind of the conduit to the, but they haven't really benefited necessarily too much from that. But it has become more and more necessary to have those relationships, to have that themselves. They're on the accountant version of whatever, or they have, the accountant sort of has their face of things because let's face it at a point of where you don't want to necessarily have to deal with, oh well my client's on this version of this and I know some accountants still do, but you just want to deal with that lesson.
(08:35)
And last where it's like we want to be on the same thing. We want to just as we're talking right now, you want to be looking at the same thing. You want to be looking at the same books, you want to be looking at the same files, same financials, whatever it is, you want to be in it with your clients so you can do that work. And some of the software that's become a little more essential to just do your work, you know, do have that kind of agreement with the vendor that pricing is going to be X and service is going to be Y. And they haven't necessarily benefited from that too much, especially as prices now are going up. Support might be sort of going down or going left and you, you're just left questioning, well what am I doing? And maybe I should have had some agreement of, okay, look, I'm basically getting you business or I'm trying to exist.
(09:42)
I need your product in order to just do the core work that I do and now you're kind of straining me. What am I supposed to do here? And I remember seeing this too, back with when I was covering more of the VAR market, and it's not even that kind of relationship anymore, but the VAR market where, you know, had some of the bigger companies, the sages in Microsoft's where it's just they were kind of squeezing a lot of their partners and they're like, wait a minute man, I put you where you're at. And I'm not going to name names, but there are certain products that out there that have become ubiquitous with bookkeeping and accounting that the accountants, their accountant partners are. I think they kind of came to expect a certain relationship with them that they no longer have. And I use the word relationship cause I don't really want to sort of get into too many specifics because I don't want to call out any particular companies, but it we'll do that later has exactly, it really has become to a point where it's like, wait a minute, we to used to have a certain relationship here and now you're squeezing me here.
(11:11)
Or you're basically saying that, hey, you know, don't really need me because you can just go around me and go directly to my client or directly to these businesses now. And whereas you know, wind me and dine me for all these years and now you're just saying, yeah, well you know, can pay or not, we're going to get the business anyway. And I saw it, I happen with some of the bigger vendors in the space before, but I didn't know that I would ever really see it. But billion dollar software companies are going to do what billion dollar software companies are going to do. They have to sell product.
Dan Hood (11:56):
And I think this is one of the problems here is that for most of us, we don't look at it at a big billion dollar software company or even a million dollar software company. Most of us don't look at software companies and go, well, I don't want to buy it the way you're selling it. I want to buy it this way, or I want to have this relationship with you. We don't think we're in charge of that relationship. And
Seth Fineberg (12:18):
That's exactly my point. Sorry, I know I did kind of an end wrong.
Dan Hood (12:21):
No, no, no. Well cause there's a lot of moving parts to it. We don't think we're in charge of that relationship. We think it's just, well, I use this software and if I use this software, I use it on their terms. Now, I don't think we're going to be able to dictate terms to these software companies, but you can change the relationship a little bit. Maybe that's what, and I think what we're getting at is that the current relationship, maybe not what everybody might want or what everybody might deserve given as I think the way you outlined it, accounting firms are bringing a lot of value to this. The table in terms of close connections with clients with a strong advisor and recommender position, they're in a position to say, you should lose this software in much more so than anybody else is. So maybe knowing that, what should accountants be doing? What kind of relationship should they be looking for with a software company?
Seth Fineberg (13:11):
Oh look, make no mistake, I'm not saying that the big bad software company isn't necessarily all big and bad, but they might talk a big game. But at the end of the day, I still believe particularly these companies that are going after small and mid-size businesses, they need a good relationship with the accountant. They need them to at the very least, be able to recommend and understand all that they offer. It's essential because they can easily just tell their client, we can go elsewhere. And the thing is there, there's not only one game in town anymore. There was a time where you didn't have a choice. And now with so many choices to be able to get certain basic work done, whether it's tax, accounting, payroll, what have you have a lot of choice and they know it. And so that in order to have that better relationship, I think that they can start dictating some terms of what that relationship is. And I think it's ti, it's time vi,
Dan Hood (14:27):
Right? That's what I want to hear more of. I want to go, it's the 10 demands of the rising accounting proletariat to discuss the revolution. But we need to step step away for a quick second, but we're right back to lay out our demands. We are back with Seth Feinberg who is explaining why software, not software firms, accounting firms need to rise and storm the barricades of against software vendors. Again, we're not here to bash software vendors because they're delivering value enormously valuable tools to the profession that are making everybody's lives better, the work is better, clients are better served, et cetera, et cetera. But there is a possibility to change their relationship a little bit in such a way that it'll be better for everybody. And I think that's what we're talking about now. And I you've discussed the need for the position that accounts are in the leverage they have. If you wanted to say, listen, we're the prime gatekeepers to our clients. Everyone, every accountant brings 10, 50, a hundred small business clients with them. And then those people need all kinds of software on all kinds of services. And if the accountant's gatekeeper, they're in a little bit better positioned to say, listen, this is what this relationship should look like. Given that, what should the relationship look like? What let's formulate our list of 95 demands.
Seth Fineberg (15:48):
That was the 95 thesis or something.
Dan Hood (15:51):
Nail it to the door of
Seth Fineberg (15:52):
Exactly right. Go to any number of companies out in California or we're not naming these. No, we're not. No we're not. But no, there's true, there are plenty out there that can get certain jobs done and more waiting in the wings too because this is just how it's gone. I think with maybe existing relationships that may be cracking bit's, probably a good place to start and just saying, look, really start thinking, you know, mentioned at the outset, I don't think firms really thought that way or really thought about it and all of a sudden they realize that over time that maybe they should renegotiate some terms. But if you're entering a relationship, a new relationship with a vendor, I would just really be upfront and be like, well, what am I getting out of this? Or maybe just really think about what your expectations are.
(16:53)
More often than not, you are going to have to build some kind of a stack. You're going to have to have meaning a set of products and your client work with in tandem. And you can go back to your client saying, okay, great, this is my dawn. Dawn Brolin loves to talk about her starting lineup and she's done the work to evaluate everything that she says that she's going to use. And a lot of people don't know this. Dawn runs a three person firm. She is the quintessential accounting firm that is out there, very small, does a lot of deep work with clients, but she makes sure, so don't think that you can't do this for your solo pracs. And you six and eight person firm leaders don't think that. You can't just say, okay, look, I have evaluated a certain amount of software, I've got these relationships going.
(17:52)
And she's made sure that those, I'm not saying just her, but she's a great example of a C P A who has gone out, done the work and really sort of demanded a specific sort of line of communication you got. Even if it's just like, look, if something goes wrong, I mean, let's face it, you're busy. You don't really want to have to be thinking it, you just want things to work. What do you do when they don't? And invariably it's not, you want to know that direct line of communication of who do I go to? Who's my person, who's my people? Where do I go to just to solve this because I'm in the middle of busy season and I don't have a chance or my client needs X, Y, and Z. Where do I go to? So that could be as simple as I just need to know and I have certain expectations of, so it's kind of form your own service level agreement. They have theirs, maybe you have yours just from an expectations point of view. I think it starts from there and then it's just a conversation.
Dan Hood (18:56):
Well, and there's at the top end of that, at the far end of that conversation, everybody who's using software can start that conversation. There's a sort of far end of that conversation where you get even more deeply involved, super deeply involved with your vendors. And I want to talk about, maybe ask you about it from two perspectives. One, particularly you mentioned all the new competitions coming in, right? Used to be we had lot fewer options for general ledger software, for tax prep, for invoicing, for
Seth Fineberg (19:23):
Yes to You went to your Staples, you went to your Office Depot and you just got what was on the shelf there.
Dan Hood (19:28):
Yeah, there wasn't much in the way of options. Now there's a lot more, there's a gazillion apps for every aspect of accounting text, but whatever the case may
Seth Fineberg (19:37):
Be. And even those apps have apps
Dan Hood (19:40):
And they're all, many of them are very small, which means you have a lot more power with the
Seth Fineberg (19:44):
Exactly, exactly.
Dan Hood (19:46):
And you did. Exactly. So you can demand more. But also, and this is true at both, not just of them, but also you have the potential to shape what they do.
Seth Fineberg (19:55):
I was hoping we would get here.
Dan Hood (19:57):
Well that's, I'm in the sense of how do you not just say, this is what I want from you. This is not what I want from you now this is what I want to see
Seth Fineberg (20:04):
From you. This is how I want it to work, this is how I expect it to work. There hasn't been, historically, there really hasn't been enough accountant involvement in the actual creation and evolution of these apps. It's been largely developers who think are, I'm going to design all these things and it's going to be great.
Dan Hood (20:24):
And some of them will have a little, an accountants council or there's some people they bring in, but how do you get on that council? How do you get your voice?
Seth Fineberg (20:30):
Yeah, you alpha test your beta test or whatever. That's the great thing about the evolution of the apps today. It's all pretty much cloud. And because of that, the great thing, the promise of cloud, and I remember writing about it a good 12 years ago, was like, you really don't have to think about that. You know, don't have to necessarily wait six months or a year or a couple of years for another version to come out. It's constantly evolving. So if you're going to sign on to a vendor, maybe that's something you demand. Just be like, Hey look, if you're going to be coming out with, you're going to evolve this. Let me be involved in that evolution. Don't just go back to your developers and just say, well okay, we need to be thinking about doing social listening. And just maybe hearing from accounting partners about what you want actually get involved in that growth of that product.
(21:43)
Because then all of a sudden you've, you're kind of a stakeholder and everybody, all boats are going to rise. Everybody wins in that situation, you know, have a better relationship. And you also sort of get what you want. And I understand that accountants are very, very particular and you can't necessarily, I think of the scenario, Dan and I love to talk about The Simpsons and there was an episode where Homer gets to decide what the car of the future is and it becomes, it's too much because it got too many features and it's got too many things. It's not about that, but it is still about that. And I think they'll sort of take it collectively. They're not going to just listen to firm X over firm Y, they're going to sort of take a collection of that. But I think firms and firm leaders and accountants in general who use this stuff, they really need to be considered more in the evolution ti And again, it's, it's time. So when we're talking about your listed demands, I think that's one of them. I think it's a very long overdue.
Dan Hood (22:53):
Well, and I think, again, we're not here to bash vendors. Many of them are not to this sort of thing. Many of them would love to hear
Seth Fineberg (22:59):
From you. I would think so that they would want to hear that just, you know, have to start hearing it. You have to start speaking her and saying, look, I want things to look at work rather than complaining like, oh man, can't, what is this? Does this do,
Dan Hood (23:13):
Why doesn't
Seth Fineberg (23:14):
It do this? I got to do, I got to go through extra training now. But if you were involved from the jump, it's going to surprise and delight. I always love why it takes certain bookkeeping apps so long to come up, get the bank feeds. But if they were involved in that maybe earlier on, maybe it would've, would've happened sooner
Dan Hood (23:42):
Because she would've been saying, Hey, you got to remember about the bank feeds. What's a big problem for us is bank feeds. I dunno if you've heard about bank feeds, but bank recs. Bank rec's a big deal for us. God,
Seth Fineberg (23:52):
You a bookkeeper. Yeah. Yeah.
Dan Hood (23:54):
But that's thing for a software developer, they don't know what bank reconciliation is. They've never heard of these things and
Seth Fineberg (24:00):
That connection to that and that connection to those banks. Another thing that happens, bookkeepers out there, the connection can break from time to time. It just, oops. It's like, yeah, I know you love when that happens, but you're like, how can we get that to not happen break?
Dan Hood (24:22):
Excellent. Alright, well I mean we've made successfully the case for getting more involved with your vendors, making sure they're hearing your voice and recognizing that more that you have, have the opportunity to get out and say something to make your voice heard. Again, we're not actually, we just should know, considered exhortation to violence or to violent the violent overthrow of the software vendors of America, but just to get involved with them because they want to hear from you. Right? They're their customers.
Seth Fineberg (24:49):
There's no Bastille out there.
Dan Hood (24:51):
Yes, there's not. We are not suggesting you go down. That's why I'm going to stick with the Bastille. I'm not going to use any other examples of violent overthrows of government. But yeah, so we're not suggesting that just suggesting a closer relationship is going to be better for everybody. Is that safe to say?
Seth Fineberg (25:05):
Very safe to say. And probably the most realistic way to just summarize everything we just said.
Dan Hood (25:14):
Excellent. Alright, Seth Feinberg, thank you so much for joining us.
Seth Fineberg (25:16):
Thanks for having me, Dan.
Dan Hood (25:18):
We'll be talking again soon, I'm sure. And thank you all for listening. This episode of On the Air was produced by Accounting Today with audio production by WenWyst Jeanmary. Rate or review us on your favorite podcast platform and see the rest of our content on accountingtoday.com. Thanks again to our guest and thank you for listening.