Practice Management makes perfect

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Oct 11, 2022

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Assigning jobs, improving efficiencies, maintaining compliance: there have never been so many options for running a smooth practice.

Practice management software was designed to assign jobs to staff and keep firms operating at maximum utilisation. There have never been so many available in the Australian and New Zealand markets as there are today.

MYOB is still selling its server-based software, Accountants Office and Accountants Enterprise. It’s also offering its latest acquisition, the cloudbased GreatSoft. And last year it began marketing a customised version of its cloud enterprise resource planning (EPR), MYOB Advanced, to larger firms under the name MYOB Advanced Professional Services.

MYOB’s long-term rival Reckon with Reckon APS is now out of the practice management game (it sold its assets to The Access Group, a venture capital backed aggregator of business software earlier this year). Access is also selling the old HandiSoft (on premises or hosted) and a cloud-based version built on Salesforce’s Force.com platform. It’s also offering the server-based Access APS (formerly Reckon APS), which now has two online modules under the APS Plus brand as part of its ongoing migration to the cloud. And it still sells Access Elite (formerly Reckon Elite) to smaller firms.

Then there’s Wolters Kluwer, which offers CCH iFirm, and Karbon, which is going strong in Australia, New Zealand and globally.

FYI Docs falls under document management but is becoming an indispensable part of Xero Practice Manager (XPM). XPM, the only free software in practice management, is believed to be the most widely used platform but has had limited improvements over a number of years.

Each practice suite has its own set of high notes and limitations; many of the latter require a lot of digging to uncover.

What are the trends?

There are three apparent trends in this space: The first is an inevitable march towards browserbased software, even if some of the biggest vendors haven’t quite finished their cloud replacements.

A second trend, fought for a long time by the incumbents, is open integration. All management suites accept this as the future – although again for some it is more aspiration than reality.

A third trend is that mid-size and larger firms, frustrated by the pace of development, are cobbling together their own workarounds. They see this as the best way to get the accuracy of reporting and lift in productivity that software off the shelf is currently unable to deliver.

The shoehorn approach

Certainly, Adelaide firm Perks Accountants and Wealth Advisers’ experience with XPM is a case study in repurposing technology for one’s own needs. Director of cloud solutions, Nick Grieve was surprised when told by a Xero representative that his 230-seat organisation was too big for XPM.

“[Our] team had a look at what we could do with Xero Practice Manager’s API,” says Grieve. “We were confident we could get around its reporting limitations and build something over the top of it. We could see the benefits of XPM from an efficiency and an ease-of-use point of view.”

The firm went ahead with the implementation as part of a move-to cloud project that replaced five servers running Reckon APS and XPA, the phone system and file hosting.

Grieve now uses Power BI to grab client information from XPM and mix it with wealth and finance data from Xplan and other applications. This creates a view of accounting, audit, wealth, commissions, finance and fees for every client across the whole firm.

Perks uses a spreadsheet to record hours worked and utilisation, which Power BI then overlays on top of the data in XPM. In fact, Power BI is becoming a common platform for detailed reporting in larger firms, whether they are running GreatSoft, Access APS, Karbon or XPM.

The extra work required for reporting and overcoming other limitations has been worth it, Grieve says. Staff are very familiar with the Xero interface and are happier with the improvement in usability, navigation, and look and feel.

“I think it is more efficient,” he says. “Bigger systems probably have a lot deeper functionality than Xero Practice Manager, but we found we weren’t using half of that anyway.”

Another trend is that firms are happy to share their knowledge. Grieve and his team recently helped an 80-seat firm move from CCH iFirm to XPM and set-up Power BI to handle the reporting.

Movers and shakers

In terms of larger systems, The Access Group has created a new division, the Access Accountants Group – Asia Pacific group, to govern the on-premise and cloud versions of HandiSoft, APS and Elite. Kerry Agiasotis, president of The Access Group Asia Pacific, has given the group a 12-month deadline to deliver the full cloud versions – long promised – of HandiSoft and APS.

APS had already released two APS Plus cloud modules before the acquisition: Contacts Plus for client management and Workflow Plus for job management. The main piece, a cloud-based general ledger and report writer, is yet to come. Ledger Plus is due for release in the first quarter of 2023, says Dave Francis, who heads up the Access Accountants Group at Reckon.

One of the biggest complaints about the serverbased APS software was that it had extremely limited options for sharing data. The Cloud Plus modules include an API layer which makes it much easier to connect to other cloud software. For example, Contacts Plus connects to BGL 360’s corporate compliance and SMSF software, Francis says. The cloud modules are effectively a syncing tool for data with APS on-premise modules.

Access Group claims that 85 firms with a total of 3000 APS users are using one or more of its APS Plus cloud modules.

It is a similar story at MYOB, owned by the private equity firm KKR. MYOB has no intention of retiring MYOB Accountants Enterprise or MYOB Accountants Office which are still widely used, says Valantis Vais, MYOB’s head of product. The majority of sales however are for the cloud products, GreatSoft and MYOB Advanced Professional Services, says Vais.

GreatSoft can service smaller customers looking for a practice management solution because it has a more discreet footprint.

MYOB Advanced Professional Services is an extension of the MYOB Advanced platform, an ERP that MYOB sells to small and medium enterprises in Australia and New Zealand. “If firms are looking to step up their game, that’s where Advanced comes into play,” Vais says. Firms best suited to Advanced Professional Services want a higher degree of digitisation than practice management alone can offer.

MYOB doesn’t share the number of firms using its practice management applications. Advanced Professional Services launched 18-months ago and MYOB announced Moore Australia was moving to the platform. Moore, which estimated it would save A$200,000 “due to improved digital infrastructure” is now one of MYOB’s largest customers and one of the many businesses upgrading its SaaS offerings in response to the changing conditions brought about by COVID-19. “We wanted a one-stop shop where we could do everything from time tracking to billing, and access real-time insights from our seven offices within a few clicks,” said Greg Mallam, Moore Australia (Queensland/Northern NSW) managing partner, in a press release.

Hourly, fixed, or both

Another trend that has had a major impact on the way practices are run is the spread of fixed-fee pricing. A year after joining Altias Advisory Brayden Allenberg helped the Gold Coast firm purchase a similar sized practice in Brisbane. The two operated quite differently. The Gold Coast firm ran XPM and its clients were mostly on monthly billing arrangements. The Brisbane firm ran on HandiSoft, was mostly hourly work and heavily paper based.

Allenberg noticed the Gold Coast firm didn’t keep time sheets – a mistake, as the firm had no idea how many hours it was spending on fixed fee services and therefore which jobs were profitable. “My immediate reaction was, I think you’re undercharging,” Allenberg says. “That was based off my intuition of doing time sheets for 10 years prior.”

Allenberg advocated for a system that could track workflow and time-based billing more easily. He had several conversations with MYOB, initially about MYOB Accountants Enterprise and later about its GreatSoft acquisition. Altius selected GreatSoft and paid A$27,000 in consulting fees to set it up: a steep price for the small firm but worth it in the long run, Allenberg says. “There’d be a number of firms out there that don’t ever want to wear the cost. But from my perspective, it pays for itself in terms of increased billing and monitoring performance,” he says. Altius also pays A$800 a month for 13 users.

After implementing GreatSoft in February, the revenue of the Gold Coast and Brisbane offices each increased by several hundred thousand dollars. Allenberg notes that during this time the firm also standardised processes, moved clients from HandiSoft to Xero Tax and increased prices for the scope creep in the Gold Coast firm, proving Allenberg’s hunch was correct. “It might just have been a case of closer attention to the numbers and we’re going to bill what we’ve actually put on the clock,” he says.

Internal assessment

Mergers are a common trigger for re-evaluating practice management software. Megan Plumridge at New Zealand business advisory and accountancy firm +MORE (Plusmore) wanted to find a software vendor that was committed to improving her firm’s product. +MORE had been using XPM for four years and seen “next to no development”, she says.

Plumridge was impressed with Karbon’s triage system for email, which effectively replaces the Outlook inbox and calendar interface. “It is a massive thing for us. You can pull your emails into this triage and assign them to people and take your to-do list out of your email inbox,” she says. “I can see us moving into Karbon for total practice management.”

+MORE has been using Karbon for 18 months in its Wellington office and four months in Auckland. However, it still uses XPM for time sheets and tax. Karbon does have time sheets but it doesn’t yet have a billing engine. (Karbon demonstrated a billing module at a recent customer event and says it will launch soon.) The compromise of using XPM for time sheets means the firm doesn’t get enough detail on budget versus actual hours worked per job, however Plumridge hopes this is temporary. “We work out our profitability using average hourly rates anyway which we pull out of our financial reporting,” she says. “We do a bunch of WIP reporting out of XPM, and we’ve got Power BI reports running out of our XPM and Xero data.”

Plumridge will judge Karbon on how well the firm handles New Zealand’s agency filing deadlines in September and February. The September 2022 date will be a little early; +MORE is still ingesting a merger of the Auckland office. February 2023 will be the real test.

Many firms face intense pressure to meet Inland Revenue Department deadlines, working flat out on compliance through February and March. “We want to get to a point where we’re spreading our compliance work nicely throughout the year,” Plumridge says. She adds that when she was shopping around and doing due diligence, a New Plymouth practice mentioned that thanks to Karbon, they had met the filing deadlines for the first time ever.