November 13, 2019
Professional Services Firms: 8 Accounting Pain Points You Must Avoid
Posted by Armanino Financial Advisory Team
Professional services firms provide their clients with the convenience of outsourced workflows and the clarity of expert insights. So it’s somewhat ironic that the internal operations at many firms are anything but efficient and insightful. Too often, organizations that excel at what they do for others struggle to do the same for themselves, particularly when it comes to finance and accounting.
This is, in part, a consequence of ambition. Firms that are eager to hit the ground running set up rudimentary accounting processes to start – the kind of introductory system that all new businesses need. However, as they grow, the same methods that once seemed adequate quickly become an obstacle at best and a liability at worst.
Most troubling, firms may be suffering from bad accounting without realizing the full extent of the problem. It’s easy to commit to the status quo, especially when it’s been in place since day one. Without another example for comparison, finance teams can start to accept that inefficiency, uncertainty and lack of functionality are par for the course. But they’re not, especially at the most successful firms.
Resolving these issues starts by acknowledging where and why they exist. Watch out for these common (but preventable) professional services accounting pain points that could be holding your firm back:
- Lack of automation – Ubiquitous accounting tools like Excel lack sophisticated automation, forcing the accounting team to invest significant amounts of time and resources into data-heavy workflows like reporting and consolidations.
- Underwhelming accounting software – A products like Quickbooks is fine for small firms just starting out, but the software’s linear configuration doesn’t allow for the dimensional, detailed accounting that established firms need to sustain their growth.
- Overwhelming manual inputs – Manipulating data by hand wastes time and creates the risk of human errors, which both contribute to the problem of missed deadlines and untrustworthy insights leading to disorganized decision making.
- Unmanageable data – Growing firms want and need to leverage ever-expanding amounts of data, yet turning that data into value proves challenging when accounting tools can’t scale and do little to expedite data management.
- Inconsistent cybersecurity – Service providers who work closely with clients’ data must make an intense effort to secure that data, but keeping it in outdated or underwhelming systems creates more risks than it resolves.
- Liability from BYOD – Smart devices that are widely considered to be essential for work also raise concerns about cybersecurity and regulatory compliance, meaning that a critical tool is also a constant source of risk.
- Ongoing integration issues – Legacy accounting systems can be difficult (or impossible) to integrate with new technologies firms introduce, creating a problematic gap between the firm’s finances and the rest of their operation.
- Unreliable compliance management – Compliance is becoming more complex and costly all the time, and those changes are difficult to keep up with using older systems that are not built to be agile or in-depth.
By recognizing and addressing these professional services accounting pain points, you can help ensure that your firm has the finance infrastructure it needs for its long-term success.
If these challenges sound familiar, Armanino can help. We offer a comprehensive solution including outsourced accounting workflows, expert advisory services and best-in-class software. Contact us to discuss how we can work with you to address your own pain points.
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