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Is a Practice Automation Boom Coming?

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After two years of sprinting to stand still during the pandemic, the latent demand for growth from ambitious practice owners and accountants is evident, but an equally important driver for automation tools is the struggle to recruit and retain staff in one of the most challenging labor markets ever experienced by the accounting profession.

Mar 3rd 2022
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The Practice Ignition rebrand, scale-up and push into North America marks the latest development in a fast-moving, fast-maturing practice automation and workflow tool market.

How practice automation and streamlining will play out over the coming years is still unclear and vendors from different parts of the accounting ecosystem are seeking to find ways to capitalize on the demand.

Sage’s acquisition of pricing and onboarding app GoProposal back in October positioned client onboarding as a centralized ‘horizontal’ function, with other accounting platform operators rumoured to be pursuing similar models - and potentially eating into operators like Ignition’s turf.

Speaking to AccountingWEB, Ignition co-founder and former practice owner Guy Pearson stressed that by using automation and workflow tools, professional services firms can also gain an advantage over competitors by optimizing client management (and increase profitability).

“Clients service teams, team leaders, even partners at some firms, are spending up to 20 percent of their time checking who’s paid, calling prospects to see if they’ve received the proposal, chasing up engagement letters amends - it’s all unnecessary and no one enjoys it”.

Karbon’s recent raise of $66 million, which the practice management vendor plans to invest in developing end-to-end practice management capabilities, "from prospect and lead to proposal, onboarding and scheduling” points to growth in the market from a slightly different angle. Meanwhile, tools like Dext are making similar noises about enabling advisory functions for firms through automation, but from an alternative perspective.

Ignition has built its reputation on tools that enable accountants and bookkeepers to streamline client sign-ups with templated proposals and engagement letters, adding a range of other add-ons over the past decade, including automated client billing, price proposals benchmarked by region, client dashboards and a CRM system.

Through a series of strategic partnerships with software giants such as Xero and QuickBooks Online, Ignition has grown steadily, and ten years on more than 5,000 accountants, bookkeepers and professional service firms use the vendor across territories including Australia, New Zealand, the UK and North America.

While its largest customer base is still in Australia, North America represents Ignition’s second-largest market, and according to Pearson, the vendor’s recent raise of $50 million in Series C funding will help bolster growth plans in the territory,

“While we’re in the very early stages of adoption, we’re seeing huge take-off in North America,” said Pearson, who put the tool’s popularity down to several factors. “We’re seeing North America increasingly embrace cloud accounting and the US in particular now seems to be heading down the Neobank route.

“North American businesses have struggled to get paid during Covid like everyone else. Covid has almost forced businesses looking to move on from checks to skip over payment methods deployed in Europe like fast transfer in favor of services like Bill.com, GoCardless or Ignition.”

Ignition has bolstered its progress in North America through partnerships with the likes of Intuit and Thomson Reuters, and recently announced a platform integration with full-service payroll provider Gusto, allowing users the ability to simplify onboarding and billing, and scale their firms more effectively.

“Historically in the US, payroll is something very separate to the work CPAs or bookkeepers,” said Pearson. “You lump payroll onto ADP or something similar. But we’re hoping to bring that together.

“Gusto connects to Ignition and automatically populates client and employee headcount specifics to save time, streamlining payroll billing workflows, and allowing CPAs to upsell people advisory services.

“If a CPA looks after payroll for clients it can automatically charge them based on the number of employees the client has,” continued Pearson. “This is how Gusto charges and it’s a solid system as payroll is hard to fudge. We’re looking at unit-based billing driven by a third-party system.”

 

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