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You’re understaffed, overworked, and drowning in spreadsheets.
Thinking about your tech stack? Seems like a luxury you’ll tackle after you get through the month-end close.
Yet, the key to getting more of that manual work off your plate (and shifting to be seen as a strategic business partner), ultimately lies in investing upfront in a strong accounting tech stack.
So carve out the time to do it right, read through our list of tools you need in your accounting tech stack, and keep in mind the following 5 key questions.
Watch full webinar with Dave Wieseneck & Parker Gilbert on building an accounting tech stack.
1. What’s breaking and where is your team losing time?
First lay a strong foundation with your ERP and payroll tools — then focus on existing processes that are breaking at the seams.
Dave Wieseneck, VP of Finance at Demostack, advises that for some businesses what’s layered on next will naturally be invoicing.
Whereas for others, “It really depends. If you're only going to be sending out one or two invoices a year because you just have one or two customers as an early company, do you need a separate invoicing and payment platform? Probably not.
If you have 50 vendors that you're going to be starting with (because with every company you usually start paying vendors, employee reimbursements, and some payment outflows before you start making revenue), then maybe you start with expense management before moving to invoicing and payments.”
Ultimately, Dave suggests asking, “Where are you doing things manually? Where is that starting to break? And then say, now we have this pain, let's go solve for it. As opposed to trying to build everything all at once.”
2. Manual vs. automated: what frequency do we need this information to make decisions?
You’ve identified key pain points in your current process. Check.
Now, is an automated solution the right fit? Or should you continue managing the process manually?
Parker Gilbert, Numeric CEO & Co-Founder, suggests keeping front and center the fact that, “Our job as a finance and accounting function is to serve the business, it’s to enable our business partners and teams to go make good decisions as quickly as possible.
And so, starting from that question, consider, what operationally is going to drive those decisions?”
Your cash position is a clear example of where real-time information can directly influence business decisions, like marketing spend. Investing in integrations and tools in this sphere can translate to real-time impact.
On the other hand, for workflows where decisions are made on a monthly or quarterly basis, perhaps continuing to pull that Excel file manually may be the most cost-efficient option for the time being.
And starting with a manual process at first will later inform the right automated approach.
Wieseneck shares when he’s considering an automation, “We're gonna do it manually for a while and learn it, we're going to develop that muscle memory, and then once we know it intimately, we can either figure out how to automate it or get an integration that’s customized to do exactly what we need.”
The tools you need in your 2024 tech stack
3. Is an up-and-coming solution or an incumbent the better fit?
You’ve thought through whether a manual or automated approach is the right way of solving the pain point. Now, which specific tool should you go with?
A lot goes into making the right software choice, with much of it coming down to a risk vs. reward balance of incumbent solutions and up and comers.
Key questions to consider:
- How “core” is this tool our tech stack?
- What are the consequences if this breaks?
- How well does this solve the problem? How big is that problem?
- For incumbent tools:some text
- What is the level of support my team will receive?
- Will my feedback be incorporated into the product roadmap?
- What’s the pace of innovation?
- For up & comer tools:some text
- What’s the roadmap for the product?
- How well funded is the company?
- Who are current clients? Can I speak with client references?
- Is the company hiring and growing quickly? (One signal of sound financials)
- What data security and compliance certifications and measures does the company have in place?
Wieseneck advises, “Going with an up-and-comer GL system is going to be a pretty big risk because it’s the core of your stack…
Going with an up-and-coming spend management tool or an invoicing tool, there’s much less risk, because you can always decide to switch if it’s working.”
Incumbent solutions often provide the stability and infrastructure reliability that’s critical for your tech stack “core”. Up-and-comer solutions push the edge of innovation and can streamline processes more substantially, but need thoughtful vetting.
By diversifying your tech stack with classic choices and newer to market innovators, you reduce as much risk as possible while realizing as much opportunity as you can.
4. What’s the total cost of ownership?
You’ve chosen the tool for the job. Now before you sign that contract, consider the total cost of ownership — and that goes beyond the price tag.
What training will your team need? How long will it take to implement? What will your team not be able to do given the implementation?
Factor in ongoing admin and teams outside of the accounting sphere that will be impacted.
Finally, Dave Wieseneck recommends keeping in mind the potential cost in political capital.
“By rolling out a tool, especially if multiple teams are affected, you are cashing in some political capital that you've accrued with the organization.
If it goes well, you will accrue more political capital. But if it goes poorly, or if it's ill received, you may get the stop sign next time you want to do a project and you lose a little bit of political capital.”
5. How will you get other stakeholders on board?
The battle isn’t won yet. To be successful, you need to get two primary groups of stakeholders on board: budget holders and end users.
Getting budget holders on board
Parker Gilbert recommends communicating in trade-offs,
“Finance and accounting teams are some of the leanest teams in a company and are asked to do a huge range of responsibilities. And quite a lot of it is recurring, happens every month, happens quarterly, happens annually.
So, the attention and focus should be on taking those sort of recurring processes and then highlighting what are the trade offs if we can accomplish those more efficiently.
What time opens up to then work on value-add, discrete projects to advance and enable people to make better decisions and move quickly.”
Focusing on the financial ROI, time savings, and elevating what your team will then be able to tackle with the new efficiency gains can help get the greenlight on new software.
Getting end users on board
Now time to get the rest of the team to actually adopt the new software.
Wieseneck shares, “Users are lazy. But in a good way though, right?
They have a job to do. They want to get from point A to point B, and if you build too much of a process and too many approvals and all these roadblocks in the way, they're just going to go right around and take a shortcut.
So you need to make sure you illuminate the process, show them the path, and show them how to do the job they need to get done quickly.”
By clearly showing how software makes their day-to-day easier, you naturally encourage adoption.
And communication is key. Provide slack message updates, Loom video overviews, or full-team trainings dependent on the scope of the tool. Ahead of the contract being signed, think through what roll out plan is appropriate to encourage adoption up front.
In Conclusion
As an accounting leader, selecting the right tech stack is one of the most impactful decisions you’ll make.
You’re on the right track if you’re focusing on where you have active growing pains, deliberating the reward of automating versus continuing a manual process, and then selecting the right tool for the job out of up-and-coming and incumbent solutions.
Evaluating tools for a better month-end close? We’d love to chat.
Tierney Pretzer runs content marketing at Numeric, partnering with top accountants to break down best practices, thorny accounting topics, and helping teams navigate the world of accounting tech.
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