Can you have confidence in new tech offerings?

Jas Bhohi FMAAT, managing director of Kumar & Co Chartered Accountants, recommends using Companies House financial statements to review how long the company has existed, the strength of its balance sheet, its cash position, and whether it is profitable.

He says: “In practice, it’s less about analysing every number in detail and more about forming a sensible overall picture of whether the vendor looks stable and credible enough to rely on long term.”

Chris Argent FMAAT, founder of the GENCFO Community, points out that many vendors will have funding from investors, so a check should be made to identify whether sufficient funds are in place to support losses in earlier years:

“Many vendors are in a startup up scale up mode, so they are funded well enough to [ensure] success. You don’t want to buy a product that is not funded for growth.”

“Founders with relevant industry experience or a track record of building successful businesses tend to inspire greater confidence, particularly where they are supported by credible investors or institutions with the resources to sustain growth,” says Bhohi.

Karen Feltham MAAT, owner of Aligned Accounting, is mindful of adopting new vendors whose founders may not give their full commitment to projects or get distracted by other business opportunities.

She says, “It’s worth considering whether founders have a history of building and exiting businesses quickly or frequently changing ventures, as this can sometimes signal a short-term focus rather than a commitment to developing and supporting a product over the long term.”

Penelope Allard, director at Wild Bookkeeping, finds that founders of very early-stage vendors often respond to questions in the evenings and weekends, which is really helpful, especially when testing software out of hours.

For later-stage companies, she expects a response within a couple of hours during working hours.

She recommends seeking out vendors that assign specific account managers so that both parties are mutually invested in successful outcomes.

“It’s important to know who your account manager is so you can contact them. When you are assigned an account manager, it’s worth asking how long they have worked at the company, as it can be really frustrating to spend time investing in a relationship and then have that individual leave,” says Allard.

Argent points out that future developments should be considered in line with your own ambitions and that you should be mindful of “pursuing something that will not evolve as you evolve.”

Allard recommends assessing the robustness of the underlying platform that tools are built on to instill confidence that they can withstand changes to incorporate new features and scale with complexity.

“I’m noticing a trend for several newer entrants to the market being built on conversational chatbots such as Claude. While it’s easy to go onto LLMs and put prompts in to build simple apps this is unlikely to scale. It’s worth finding out who is doing the coding and understanding if they have sufficient credentials to build something scalable, says Allard.

From experience, she also flags that acquired vendors can lead to a tail off in support for features and integrations, so it’s good to be aware of changes to overall ownership.

John Toon, head of technology at HLB International, believes that most new SAAS products should have a relatively straightforward process for doing this. However, he recommends that accountants should still put sufficient checks in place for peace of mind:

“You need to be able to validate that you can get the data out and that the data is available. For many of the newer platforms, this is likely to be through access to APIs or connecting data to your other systems,” says Toon.

He also stresses the importance of checking the terms and conditions to review how long data will be held and whether it will remain accessible if vendors fail. Understanding this will enable users to put a timeline and plan in place for contingency arrangements.

Laura Whyte FMAAT, managing director of Whyfield, says, “Financial security is extremely sensitive and should be stored securely and have access restricted to those who have permission to and who need to use it.”

This view is also echoed by Toon, who notes the risk this could pose to clients if robust security credentials are not in place.

He says: “The very basic things I’m expecting are strong user management and multi-factor authentication. However, it’s much more preferable to have a single sign-on so I can connect directly into my Microsoft estate.”

Single sign-on provides full control over onboarding and offboarding users at large accounting firms, helping overcome the potential issue of departed employees still having access to data after they leave the firm.