How integrated app stacks are helping practices thrive

This content is brought to you by Xero.

It’s hard to believe that cloud-based software for accountants and bookkeepers hasn’t been around forever. Judging by practices’ proficiency, you’d be mistaken for thinking this software was always the norm.

Now, we’re entering an era of customisation. Instead of practices bending to make the technology work, cloud-based software is becoming more customisable, adaptable, and flexible for teams and clients alike. It’s a whole ecosystem that you can use to power your practice. Much of this is thanks to app stacks.

As we discovered in our latest piece of research, ‘Leveraging the app advantage’, the practices using apps with Xero save time, are more productive, and see more revenue, profit, and client base growth. Here, we share how you can apply this research and start building an app stack that works hard for your practice and clients.

Benefits are abundant for app stack users

If you’re new to app stacks, they’re a collection of tools that connect or ‘stack’ together to form a complete system. Instead of using standalone tools, you can link up separate software and apps so that data flows between them and processes and tasks are automated or simplified.

An example from the Xero app library is Dext Prepare. Your clients can use Dext Prepare to snap a photo of their receipts or bills, and email it directly to their Xero organisation for you to match and code.

Right now, we’re seeing practices use apps in two different ways: for managing the practice and managing client services:

• Managing the practice involves tasks like scheduling work, handling client comms, and dealing with sales and marketing. We’re seeing practices choose apps that cover invoicing, document management, and maintaining client details. And they’re reporting saving time on manual daily tasks and increasing practice productivity as a result.
• Managing client services covers bookkeeping, compliance, and advisory – tasks like bank reconciliation, filing tax returns, and creating forecasts and budgets. The most commonly used apps in these categories are for recordkeeping, billing and payments, and payroll.

You don’t need heaps of apps to see an impact. The smallest practices use an average of three, and the average number of benefits experienced per app is eight. Just adding one app to lift the administrative burden on your team could make all the difference.

When practices choose apps, their clients are rewarded too. According to our research, clients using apps with Xero save time on manual daily tasks, operate more effectively, and work more efficiently with their advisors.

Aside from saving time on daily tasks, there’s a clear commercial case for apps. We compared revenue and profit for practices using apps with Xero versus those that don’t, and discovered those using apps are more likely to experience revenue and profit growth. For those who achieved this growth, 24% attributed it specifically to apps that integrate with Xero.

App advisory

So much of the value accountants and bookkeepers provide is through advisory. Getting to know a client’s business exceptionally well, combining this with expertise and hard-won experience, and delivering the right guidance at the right time will always have a place in accounting.

With the growth of app stacks and the digitalisation of business, many of your clients will be curious about how they can make technology work for them. Practices offering app advisory can tap into this need and provide a vital billable service. Our research also shows practices offering app advisory have much to gain: they add more clients to their roster than those that don’t provide app advisory.

The ingredients for an effective app stack strategy

It all starts with your accounting software – this is your hub, and every app you use should integrate neatly with it. Your hub provides most of the functionality, so you don’t need to add apps for every single task, just a curated few that meet your practice and client needs.

It’s helpful to think about apps in the context of your client journey. Services look different from practice to practice, but you’ll likely recognise these tasks and processes:

• Onboarding
• Data capture
• Document management
• Invoicing
• Payments

Start with one of the regular processes in your practice, and consider how it can be improved or developed using apps. Perhaps your onboarding process is slow, and requires lots of back and forth between your team and clients. In this case, you could try a tool that offers proposal templates and automates contracts so that once they’re signed, client information automatically flows into your accounting software.

You can also build your app stack based on practice pain points, client needs, or opportunities for growth. You could replace that niggly document management system that takes up desktop storage, or choose an analytic tool that gives you deeper insights for client advisory.

It’s worth considering the impact of legislative and industry change, too. As MTD for ITSA comes into place, digitising document capture could help you and your clients with compliance. And as late payments continue to be an issue for small businesses, your clients might appreciate swifter billing with digital payment options.

Whichever apps make sense for your stack, we recommend adding one at a time. The idea is a curated stack, not an overflowing one. Test it with your team and clients before adding something new. Because it’s not the number of apps that makes the biggest difference, it’s how well you’ve integrated them.

What appstacks tell us about the future of accounting tech

Our research confirms that adding apps to your accounting software can have a huge impact on your practice and clients. You can all expect to save time, increase productivity, and work more effectively together.

Practices using apps see more revenue and profit, and add more clients to their books. But even if growth isn’t your goal, apps can help you continue servicing your clients to a high standard. As technology becomes more deeply embedded into practice and client processes, being able to offer app advisory and support your clients with tech decisions is becoming a sought-after skill.

The practices we surveyed plan to continue adding apps for more functionality. But you can start seeing the benefits of these integrated tools with a single app. Check out Xero’s full report today.

This content is brought to you by Xero.

Xero offers a cloud-based accounting software platform for small and medium-sized businesses..