Is Your Tax and Audit Software Vendor Committed to Your Needs?

The role of technology and the IT function in CPA firms has changed significantly over the past 5 years. Our industry has never been early adopters of the latest trends, as we tend to be more conservative and cautious by nature. Who wants a technical snafu to blow up a client relationship or create a potential compliance issue?

Increased competition, more technically savvy clients and firm mergers are changing this paradigm. Firms recognize that to scale and grow effectively they need a good technology roadmap. Today, many firms  are hiring IT leaders from outside the industry for the depth of knowledge and experience they bring to the table.

Getting your internal IT department properly staffed and strategically aligned is only part of the equation.  The other piece is ensuring your vendors – the companies providing you with your audit and tax software – are good partners. This goes beyond learning if they have the features you need to run your processes. It also means ensuring their business strategy is aligned with your firm.

Software vendors are businesses. In the wake of the latest Wolters Kluwer restructuring, it is safe to say that organizations change.

Usually, the decisions they make are driven largely by their P&L – like most businesses. However, the hard truth is sometimes their decisions are contrary to our business needs – and this can be a big problem in our industry. Here’s why.

A few large audit and tax software vendors – who have been around forever – dominate the market. Everyone knows them and nearly everyone uses them. So when these vendors make announcements or change their strategy we all should pay attention. It is exceptionally difficult to offer a solution that meets the needs of large, mid-sized and niche firms. For someone to win, someone else has to lose.

I am not trying to paint a completely bleak picture here. These vendors are good – but they are businesses. They are going to focus their time and efforts where they can make the most money. That’s OK.

However we need to acknowledge that when a vendor makes a big announcement that they are, for example, changing their market focus (i.e. concentrating on smaller firms) it will have an impact. For the small firms this is good news. For the larger firms…well they’re just not that into you.

There is no easy fix to this because no one can predict the future. Vendors are going to respond to market conditions and market conditions change. What we can do is look for vendors who have that partnership DNA. Ones that show a true interest in your business and take a problem solving approach.

You’ll know it when you see it.