Businesses are often nervous about change for a number of reasons, like a perceived loss of control or the fear of more work and competence. Humans have a habit of looking to the past to see what worked and repeating the process. But for any business to progress, we must learn to let go of old, inefficient systems and embrace innovation.
This guide will cover:
- Why some accounting firms still use legacy systems
- How clients slow down system upgrades
- How legacy systems weigh down accounting firms
- Benefits of upgrading legacy technology in accounting
- How to overcome legacy system challenges with Countingup
Why some accounting firms still use legacy systems
The accounting industry hasn’t been the best at innovating, and progress in new technology adoption has traditionally been much slower than in other industries.
Accountants are under a lot of pressure from their clients and organisations like the FCA, SEC or any other financial regulatory body to adhere to the respective regulations. Failing to comply can result in severe consequences for both accountants and their clients.
Managing someone else’s money is a position of incredible responsibility, so if accountants have spent a long time working successfully with a particular system, they probably want to continue using it because it feels safer.
Accountants still clinging onto old systems may worry that making changes to their systems may disrupt their processes too much. There’s also a fear that a new system won’t work as efficiently or securely as the one they’re familiar with. But it’s not only accountants who feel this way, but also their clients.
How clients slow down system upgrades
Adopting new accounting technology may bring lots of new benefits like lower costs, greater visibility and time savings. Still, making the final decision to upgrade is not one accountant can make. Their clients must also be convinced of the benefits, especially if they’ve seen no issues with the current legacy system.
From the client’s perspective, if something has gone well and kept their money safe so far, they’d likely be reluctant to change it and potentially risk their finances being compromised. Accountants must brush up on their sales skills to clearly communicate how the benefits outweigh the potential risks and convince their clients to implement modern systems.
How legacy systems weigh down accounting firms
Here are a few challenges that legacy systems may bring accountants:
Compatibility with modern accounting
Legacy systems were created before APIs were widespread, meaning there wasn’t much thinking behind their architecture. As a result, legacy systems often lack compatibility with modern technology.
Nowadays, accounting software must be able to integrate with other tools to create workflows. Legacy systems are often disconnected from other tools, which makes workflows inefficient.
Expensive in the long run
While accounting firms may save money sticking with existing legacy systems in the short term, failing to keep systems up to date can rack up maintenance costs and expensive workflow inefficiencies down the line. As a result, failing to upgrade systems can negatively impact the firm’s profits and how quickly they can adapt to a change in business conditions.
Issues with security
Legacy systems may suffer security flaws since they are more difficult to update than new systems. The development rate of cybercrime and nefarious individuals is far faster than you can ever update legacy systems to try and prevent security breaches. As a result, companies that cling to legacy systems are more vulnerable to cyberattacks.
Benefits of upgrading legacy technology in accounting
Let’s look at how upgrading old systems can benefit accounting firms.
Saves money in the long run
While upgrading legacy systems cost money, it’ll likely save you a ton in maintenance costs. Most digital platforms are regularly updated automatically, meaning you don’t have to. Maintenance costs will become fixed, lower sums rather than variable ones, which makes it easier to plan ahead and make financial projections.
Future proofs your firm
Thanks to the prevalence of API integration, upgrading legacy systems means that your software can be integrated with any new tools your firm may need to use in the future. While you can’t predict what new platform will emerge, you can rest easy knowing your system will be able to adapt to it when it appears. Additionally, upgrading legacy systems means you can make major technological upgrades with minor disruption.
Modern tech platforms are often subscription-based according to things like company size, number of users, the suite of tools needed, and so on. This means you have to commit less money to the purchase and try different tools before making a final decision. Your firm may need to make changes along the way, and upgrading from a legacy system makes it easier to do so.
Improves customer service
These days, many clients expect on-demand accounting services, which makes it essential for firms to embrace a digital-first and agile approach that helps clients realise the benefits of the latest technology. Upgrading to modern accounting software will empower your firm to keep up with this demand.
Additionally, the flexibility and intuition of these systems allow you to create a personalised experience for your clients and gain a competitive edge over those that still refuse to let go of their outdated legacy systems.
How to overcome legacy system challenges with Countingup
You can save your practice time on manual admin and help your clients keep organised records with Countingup’s free accounting software. It’s built specifically to help you manage your self-employed and sole trader clients.
The business current account and accounting app automates time-consuming bookkeeping admin for your clients so they can focus on running their business—and send you accurate, structured data to work from.
It’s free for accountants and bookkeepers to use Countingup. Your clients receive a great value business current account, and you’ll increase efficiency while saving on accounting costs.
Countingup’s accounting software is MTD-compatible and full of features for you to efficiently review and manage client accounts with direct access to their real-time organised data. Find out more here.