Uncoordinated business systems can be costlier than you might think.
Let's consider the scenario of an accounting firm led by CA Manish Shinde, which offers services like bookkeeping, year-end filing, business advisory and more. Manish's clients are predominantly small and medium-sized enterprise owners.
As CA Manish's client base grew and the number of transactions he had to record increased, he realized that the conventional method—uploading the new lead information in a CRM solution , and repeating the process all over again in his accounting software to be able to send quotes—had become tedious. He and his existing associates could not manage the amount of manual data entry that needed to be done to keep their firm running. He decided to hire additional staff to manage his data across all his applications.
Although this seemed like a great solution at first, after a few months, CA Manish spotted an error. A payment made by one of his clients for the services he availed was updated in the accounting software, but it was not passed on to the sales staff. As a result, the sales team had been sending payment reminder emails to the client, who was understandably upset about it. Learning about the dissatisfaction of the client, CA Manish realized that if he allowed errors like this to continue to happen, he would stand to incur some pretty serious losses.
This is just an example, but CA Manish's case shows that a firm's productivity and profits can be severely impacted when team members from different departments and functions can't access accurate, real-time data across all of their systems. A digital plumbing system can help accounting firms avoid these situations and keep running at the highest efficiency level possible.
What is digital plumbing?
As the name suggests, digital plumbing serves a similar role to the plumbing system that you find in a house. Just as a home plumbing system directs the flow of water through pipes, a digital plumbing system directs the flow of information between all the apps that organisations use to run their business processes. Digital plumbing can help you gather crucial information for your clients , including yearly churn rates, net profits, and more, without having to collect information from each application separately. With this seamless flow of data, you'll be able to get a bird's-eye view of each client's business performance.
Importance of digital plumbing
As the landscape of available business technology expands in both size and complexity, business owners are looking at implementing tech stacks to boost their operational efficiency by automating data entry, reducing costs for maintenance and staffing, and giving all employees access to real-time & accurate data.
Reduces error and increases data consistency
Any business involves multiple departments operating together to increase productivity. You can imagine how complicated it would be to have these departments working separately with standalone systems that do not support integration, transparency, or data flow. This would increase the number of employees required to enter the same data across multiple systems, as well as the chances of data mismatches, errors, and latency.
Digital plumbing brings all the changes made to a business's customer data together, so all of the organisation's teams can access the same data and view the updates that have been made. By connecting their applications and automating data entry, businesses can cut down on the errors and frustrations associated with inconsistent or outdated data.
Streamlines business processes
Businesses need to have access to real-time, relevant data in order to perform essential tasks like generating reports, contacting clients, resolving customer complaints, & packing and shipping products. Without good data, they're at the mercy of whatever information is available to them. If that data is incomplete or out of date, it can lead to important tasks being done twice or not at all.
When a business invests in a digital plumbing system, everyone in the organisation can get immediate access to the accurate information they need on all of the platforms they use for their work, which allows team members to work more efficiently and managers to make effective, well-informed decisions on the fly.
Reduces operational costs
Besides the extra time spent on manual input and analysis, using separate systems also means additional expenses for maintenance and updates.
Strategically selecting applications and integrating them seamlessly can be a game changer. The ability of such integrated systems to sync data, generate reports, and automate tasks enables businesses to trim their expenses on staffing, in-house maintenance, and office spaces.
A compelling business plan, smart tools for daily operations, efficient management, and happy customers are the basics for building and growing a successful business. A robust, integrated information system is the key to keeping all of those basics working at an affordable cost.
Why should accountants focus on a digital plumbing strategy?
As advances in technology have increased, businesses have had to change how they operate, and the accounting world is no exception. Many businesses are turning to online tools that help manage accounting, inventory, payroll, expenses, and much more.
Adopting a digital plumbing strategy empowers accountants to identify and integrate multiple applications that work for their clients to get closer control over their financials.
By integrating applications, accountants can more easily gather insights and assume the role of a business advisor for their clients.
Moreover, complex accounting and compliance requirements have made it even more essential for growing businesses to learn to work with technical tools. Therefore, business owners require a trusted advisor who can pick the right applications for their needs, integrate them to ensure a perfect flow of data, and obtain business insights to analyse and improve their business performance. Business owners partner with accountants and share their company's intimate financial details and documents. They also often confide in their accountants and collaborate with them to make informed business decisions.
Today's business owners realise that the knowledge and expertise of an accountant goes far beyond bookkeeping or tax filing. They seek financial professionals' advice in technology decisions, business strategy, managing payrolls, maximising tax deductions, ensuring compliance, forecasting business performance, budgeting, investment planning, internal auditing, and more.
Gather data in real-time
Let's consider the example of a fairly typical accounting firm, run by CA Suresh Nair.
During the filing period, almost every employee of the firm appears stressed. One can find the office completely stacked up with files, papers, and books. The accountants of the firm have to organise the documents sent by clients, manually feed the data in every document into the system, prepare Excel sheets and reports, upload files in the government-approved formats and, file the returns. They have to be careful along every step of the process to avoid mismatches and errors, but even with their caution, there's always the possibility that the clients might have missed a few invoices or bills or delayed sending some necessary documents.
If CA Suresh and his team had an integrated suite of applications that could sync data across applications to avoid redundant manual entry, allow storage of client documents centrally, and simplify the filing process, his firm's daily work routine would be coordinated and smooth instead of confusing and stressful.
Become a strategic advisor
By streamlining your clients' business technology, you will not only gain easier access to their data, but also become familiar with more aspects of their businesses. This provides an opportunity for you to position yourself as a strategic advisor, especially for aspiring small businesses who seek advisory and consulting services from finance thought leaders and game changers like you! their.
Once your client has the technology, they will still need your expert opinion on budgeting, cash flow management, financial planning and growth analysis, future expansion, controlling expenditure, and so on. Your role will not be limited to bookkeeping and tax filing anymore. Thanks to digital plumbing and the new-age fintech SaaS solutions, your increased knowledge of your clients' businesses will prove to be value added advantages to your service.
Improve accessibility
When you have an integrated system that syncs a business's data across all of its applications and provides real-time insights, disconnected business operations become perfectly aligned. The business's data is made available to every accountant of your firm and can be accessed from any device. There's no more juggling between files and excel sheets. You gain the flexibility to work with multiple clients, and have multiple users within your firm working on a single client project, at the same time.
How to get started with digital plumbing
Identify your clients' specific business needs
Integrating third-party applications and synchronising data between them can be very tricky, and your clients might have trouble achieving a result close to their expectations.
If you have customers who are struggling with this, have a chat with them and identify the features they are looking for, so you can explore whether their tools are sufficient to carry out those workflows. It's possible that the applications they've chosen might not fulfil all their needs—after all, not all businesses can be run with the same workflow. For instance, some of your clients may focus heavily on customer acquisition and want to run most of their day-to-day work through their CRM solution, while others see their Accounting or Inventory system as the cornerstone of their operations. As an expert advisor, you have to analyse the tech stack plan, making sure that it has the tools to satisfy all of their needs and is easily customisable.
Chalk out a strategic plan for implementation
Now that you have a clear understanding of your clients' needs, you can turn your thoughts to planning the implementation.
You don't need to learn programming languages or build applications to apply the concept of digital plumbing. However, it is important that you have a basic understanding of how the applications you're suggesting will function, and how to tailor them to meet your clients' requirements.
Select the right tech stack
Think about what kinds of applications you'll want, for both your own firm and your clients' businesses. If you are looking to centralise your operations between you and your clients, the set of applications you use at your firm should be in line with the ones your clients use. This can save everyone a lot of confusion and improve accessibility.
Your tech stack should contain applications that allow your developers to connect third- party applications without a hassle. It will be icing on the cake if the application providers offer APIs to allow your (or your client's) developer to build tailored applications as per the client's needs.
Alternatively, you can focus on recommending an integrated software platform that already connects applications contextually, and carry out client implementations with the assistance of the software provider.
For instance, Zoho offers a wide range of powerful suite of applications that provides a unified platform to manage all aspects of a business, from Sales to Marketing to Finance to HR to IT.
Find a robust technology partner
With so many online applications available in the market, it can be very confusing to choose the best fit. One smart way to handle this would be to partner with a particular technology provider. Software-as-a-service (SaaS) companies offer various partner programs to help accountants use, recommend, and implement online applications to manage their clients' financials and their own firms' daily work.
Of course, good ideas have to be supported by good implementation. Be cautious in choosing your tools, and thoroughly assess your technology partners before you commit to them.
Make sure to check a prospective technology partner's operating history, financial condition, product offerings, long-term strategies, and desired markets. Most importantly, find out if the partner's products integrate with other commonly used tools, so you aren't limited in your ability to use or recommend other top-notch solutions.
Most technology providers conduct webinars and training as a part of their partnership programs, and it's a good idea to make use of these so that you have an in-depth understanding of the products. Besides tutorials and training, hands-on experience with the applications is key to becoming an effective user and advisor. Take some time to learn about customising the applications, too.
Track progress and measure results
The measure of success for digital plumbing is whether it resolved the challenges the user previously faced. Are your clients satisfied? Has it made the daily routine of your firm effortless? Has it helped your clients make more informed business decisions? Has it contributed to your firm's growth? Analyse each client business's operations after implementation to answer these questions and tell if it was worth the investment.
Keep up with technological trends
Learning doesn't stop after understanding a single concept. In a technologically evolving world, it is crucial to be proactive and smart about adopting new technology as and when it is launched. Understanding the tools available is the key to serving your existing clients effectively and preparing to meet the requirements of your future clients.
You might want to look for professional organizations or industry groups that you can join to exchange insights about the market for services like yours, as well as get to explore the number of prospects in your proposed service area.
Conclusion
Unlike a siloed system, a system built around digital plumbing is inherently cross-functional and synchronised, which drastically reduces both errors and workloads. With these systems in place for your firm and your clients' businesses, you can eliminate most of your redundant work, improving outcomes for your clients and helping you focus on providing value-adding services that contribute to your firm's growth.
Article has been contributed by Harshini Ravikumar
CAclubindia
