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Apr 10, 2018 15 min read

The Ultimate Guide to Accounting Practice Management Software

Have questions about accounting practice management software? Find the answers here.

The Ultimate Guide to Accounting Practice Management Software

The thought of modernizing the way you manage your accounting practice can be overwhelming. After all, there are a lot of steps involved. To truly modernize you have to invest in different kinds of software, transition to the cloud, go paperless, and more. But the switch is worth it. Not only will your practice become more efficient than ever, but your clients will love the improved, convenient experience. In this blog post we take a look at the main things you need to know about accounting practice management software including:

  • Kinds of practice management software you need
  • How the cloud works
  • Keeping client data safe
  • The process of going paperless
  • Starting a virtual accounting practice
  • How to leverage practice management software to become more efficient

What practice management software and tools do you need for your accounting practice?

There are so many different kinds of software and tools out there that could make your practice management more efficient, but if you start using too many pieces of software you’ll end up spending too much time switching between tabs and programs and re-entering information. You should look for software that does the following:

  • Customer Relationship Management
  • Document Management
  • Workflow Management
  • Billing and Invoicing

It’s an awesome bonus if you find a software that provides more than one of these functions.


Customer relationship management software, or a CRM, is just what it sounds like: a software for managing relationships with your clients. It helps you manage information such as client data and interaction, leads, contracts, and more.

While CRM software allows you to perform fairly generic functions such as emailing and creating contact lists, a good CRM can also do so much more. You can track your relationship with a client from when they first become a lead to when you’re billing them for casework. For example, you may be able to track information about a current or prospective client that enables you to form a better connection with them as you go—information like their birthday, current job position, or other significant interactions you’ve had with them.

CRM software is all about keeping track of the people and relationships that make your accounting practice a viable business.

Document Management Software

Document management software not only does the environment a huge favor, it also provides great value to your accounting practice. Instead of filling your office with file cabinets and overflowing drawers of documents and files, document management software allows you to store all of your documents in one convenient place. Any team member can access any file (as long as they’ve been given access under the permissions settings). You won’t ever have to run back to the office on your day off to find a document for a client or colleague.

Besides increasing the ease of collaboration, document management software will also save you a ton of time and enable you to dedicate more time to meaningful work. You’ll spend less time finding, faxing, and copying documents and more time on completing casework for your clients. Say goodbye to the overwhelming stacks of paperwork that slow down your daily tasks.

Plus, when you manage your documents via software, exchanging documents with your clients is quick and secure, and they won’t lose any hard copies.

Workflow Management Software

Is your office full of to-do lists and sticky notes with scribbled reminders? Do you send out daily or weekly emails to touch base with team members? Workflow management software can take the chaos and clutter out of your task management. It allows you to create collaborative task lists that keep everyone on the same page.

At a higher level, workflow management software helps you to see the overall progress of projects and see where your process needs to improve. No sticky note does that.

Additionally, once you have discovered an efficient process for completing a task or case, you can apply that process as a template to use across the board so that everyone in your practice is using the most efficient approach to accomplishing a task.

Billing and Invoicing Software

As an accountant, you know the struggle of not always getting paid in a timely manner for the work you do or sometimes not getting paid at all. The good news is, billing and invoicing software can help you minimize your accounts receivable and increase your cash flow.

You can do billing and invoicing without software, but software makes it more efficient and will even help you get paid more quickly. Consider this: an Invoicebus study of more than half a million invoices showed that clients typically take 11 days to pay online bills and 29 days to pay bills sent by other methods. Their theory is that the easier you make it for your clients to pay you, the more likely they’ll be to do so.

How does the cloud work?

Getting the right kind of software is the first step to modernizing your practice management, but if you want to boost your practice management further, you should opt for cloud-based software.

The cloud allows you to access an enormous storage capacity of hundreds of hard drives stored in remote data centers via the internet, instead of using up the storage on your computer.

Benefits of the Cloud

In addition to freeing up storage on your computer, the cloud offers many other benefits such as:

  • High-level Security
  • Increased Efficiency
  • No Storage Costs

The cloud is secure.

According to a Cloud Security Alliance (CSA) study, “…nearly two-thirds of IT professionals trust the security of cloud computing equally or even more than their on-premise systems.” In fact, companies who currently trust the cloud with their information include NASA, Amazon, Samsung, and many banks, so if you make the switch, you’ll be in good company.

The cloud is efficient.

The cloud promotes collaboration. Any number of people on your team can use the cloud at the same time and be working on the same documents. You don’t have to wait for one person to be finished with a task to start your own—you can simultaneously complete tasks and help clients.

The cloud is also an efficient option for working with clients because client information stored in a client portal is accessible from any computer anywhere with internet. Collaborating with clients becomes as easy as clicking a button.

The cloud is cost effective.

According to The Paperless Project, a typical company spends 15 percent of its revenue on creating, managing, and distributing paper documents, so you could significantly reduce your practice’s spending by moving your data to the cloud. Mike Sabbatis, CEO at XCM Solutions, LLC, said he’s seen savings as high as 30 to 40 percent.

Plus, many cloud-based software services are pay-as-you-go, so you won’t have to worry about busting your company budget.

Additionally, a huge benefit of the cloud is that it will keep you in the lead. According to a survey conducted by, 90 percent of accountants agree that offering digital services will set them apart over the next five years.

How do you keep your clients’ data safe?

As an accountant, it’s part of your job to keep your clients’ data safe. Security should be your highest priority no matter what practice management software you use. In a world full of cybercrime, that’s not always an easy task, but there are steps you can take to significantly improve security.

Arm Yourself with Information

The single best thing you can do in your effort to keep your clients’ data safe is to always stay up to date with the latest risks. Though the basics of security stay mostly constant, it is imperative that you know the details of the most likely security threats at any given time. After all, most security breaches happen when uninformed people are tricked into letting hackers in. Being up to date on the latest scam tactics could be the difference between being secure and getting scammed.

One of the best resources to help you stay up to date on information security trends is an IRS e-News subscription.  

Consider the Cloud

As mentioned in the previous section, the cloud is highly secure. Cloud storage providers are able to go to enormous lengths to protect their servers both physically and digitally. Of course, not all cloud storage providers are created equal, but those who make security a priority will be able to keep your data safer than your own time and resources allow.

Rethink Your Passwords

Password advice used to go something like this: use a random string of numbers, letters, and special characters as your password, change it at least every 90 days.

It’s bad advice. In fact, even the expert who came up with this password methodology says so. Creating a strong password from a random string of numbers, letters, and special characters usually means creating a password you won’t be able to remember. As a result, people tend to get overwhelmed and create passwords that are too simple and easy to guess (such as “p@$$word123”).

While basic password advice still stands (never use lazy passwords like “password,” “123,” or your pet’s name), recent password advice from experts is refreshingly simple. Your passwords should be long and memorable. Choose three or more random, unassociated (but memorable) words for your new password (ex. “hairy concrete actually dice”).

Choose Secure Software

Lastly, one of the best things you can do to keep your clients’ data safe is check the security measures of the software you use. For example, Canopy encrypts data, offers access control, and uses two-factor authentication (among other measures) to ensure the security of you and your clients’ data. Be sure to ask plenty of questions about security when you’re looking into a new software.

How do you go paperless?

Investing in software and using the cloud are steps toward a paperless practice but to go completely paperless, several other steps are involved.

Why go paperless?

Going paperless offers many of the same benefits as using the cloud (though the two are not synonymous). Like using the cloud, going paperless is efficient and cost effective (no storage, supply, or maintenance cost).

Going paperless is also great for the environment. For example, say you go through 10 reams of paper per month. That works out to 720 pounds of paper every year, or nine trees. And that’s just your business. Multiply that by all the other companies that are using the same amount (or more), and those trees become a forest—a big one.

By choosing to go paperless, not only will you feel great about doing your part to preserve the planet, but showing awareness of social responsibility will also make your accounting practice more appealing to millennial clients. In fact, according to a 2015 study, 91 percent of millennials would switch brands to one associated with a socially responsible cause.

Plus, your clients (especially your millennial clients) will appreciate the modern, convenient experience they receive from your accounting practice. After all, they’re already offered a modern experience for most of their other services such as banking, receiving their paycheck, paying their bills, etc. You don’t want to fall behind the times and expectations.

Steps to Going Paperless

If you’re ready to take the plunge into paperless, here are the steps you need to follow to digitize your documents.

  • Gather the documents that you want to make digital.

Gather all the documents that you need to keep and store—and take the opportunity to clean out and toss the rest.

  • Scan your documents.

Your physical documents need to be scanned to be made digital. This is one of the more time-consuming steps of the process, and it requires that you invest in a scanner that meets your needs.

  • Back up your files.

A popular way to back up files is using cloud storage services. Since cloud services are not directly connected to your computer, none of the documents you keep in the cloud will be affected if your computer crashes.

  • Shred your old documents.

Invest in a good shredder that you can use to properly dispose of all the documents you’ve scanned and backed up. Like scanning, shredding everything will be time consuming at first, but as time goes on you’ll only have to shred individual documents as you finish with them.

If you don’t want to take the time to shred everything yourself, you can pay for shredding services that will pick up your documents and shred them for you. Typically, these services offer complete security of your information.

  • Implement digital signatures.

For digital documents, you can use e-signatures, which have been legally binding in the United States since 2000, when the government passed the Electronic Signatures in Global and National Commerce Act (ESIGN).

Different forms of e-signatures include “Click to Agree” buttons, typing one’s name as a signature, and a scanned version of a signature, among others.

Keep in mind, e-signatures can be helpful for document exchange that’s just between you and your client, such as an engagement letter, but currently, e-signatures are not allowed on some IRS forms.

  • Look for other ways to cut down on paper.

There are countless ways of cutting down on paper within your practice, outside of digitizing documents. For example, you can take notes on your computer rather than using notebooks or sticky notes and you can use an app on your phone rather than write out to-do lists.

Want to learn more about going paperless? Check out our comprehensive guide.

How do you start a virtual accounting practice?

Starting a virtual accounting practice includes investing in accounting practice management software, using the cloud, and going paperless. Once you roll all of those elements into one, you’ll be able to manage a virtual practice and enjoy the freedom of not being tied down to a physical office. Say goodbye to dropping by the office on your day off for a client meeting and say hello to working from home during the hours you choose. You’ll have more flexibility in your schedule and improve your work-life balance in a way you probably haven’t thought was possible.

So how do you do it? From a software standpoint, what’s involved in starting a virtual practice?

Choose Software That Supports Your Expertise  

You will be running your whole virtual practice based on the software you choose, which is a huge commitment. Many accountants make the mistake of choosing software that doesn’t fit with their workflow model or needs.

If you’re claiming expertise in an accounting area, you need to use a software that supports that expertise. You don’t want to use the same software a generalist would use.

For example, though both of them provide document storage options, if you are in the tax resolution industry, you would want to use Canopy’s document management system over Dropbox because Canopy has been specifically developed for the tax resolution industry. Canopy’s engineers have developed solutions with tax professionals in mind, while Dropbox engineers have not.

When to Add New Products

Aside from your primary software, you may need to add other products to your improve your processes.

You should add a new product if you’ve been doing a certain task manually over and over again. For example, if you’re often emailing forms to clients or asking them to sign documents, you’ll definitely want to add a product that automates those tasks for you, so that you can spend more time on meaningful work.

Adding the right products to your practice should significantly increase your efficiency.

Managing the Disruption of New Software

At some point you may find yourself needing to switch to a new primary software that fits your practice’s needs better than the software you originally chose. The problem is, switching software is full of learning curves, and it can bring your practice growth to a halt while your team adjusts. If there’s too much disruption to your team members, your clients may experience poor service, which is exactly what you don’t want to have happen.

Mitigating the disruption of new software is incredibly important, especially within a virtual practice. Here are two things you can do to manage the disruption:

Get Team Members on the Same Page

A small thing you can do to get your team members on the same page with your software is let them know why you chose the software you did. If team members can’t see the reason you set up your practice with a specific software, they aren’t as likely to fully invest in using the software the way you need them to.

Create an Onboarding Process

A bigger thing you can do is commit to creating a training and onboarding process. It’s one of the most important things you can do for the success of your practice.

For example, you may create a  team onboarding process that lasts for six months, with a detailed first month. It may take a lot of effort to establish the onboarding process, but once you do, every new employee you hire from then on will be more prepared to start fully contributing to the team more quickly.

You can learn more about the steps involved in starting a virtual practice in our ebook The 5 Steps to Starting a Virtual Tax Practice.

How can you leverage accounting practice management software to become more efficient?

Once you get familiar with using your practice management software, the possibilities are endless for how you leverage it for efficiency. We’ve rounded up a few examples of how real tax and accounting professionals are leveraging Canopy’s practice management software in particular.

James Faughtenberry, The ATA Group

James Faughtenberry, of the ATA Group, uses Canopy’s task feature to create custom services for some of the services he offers most often. He compiled all his research on the process of setting up corporations and LLCs and set up a workflow that walks him through the steps. It allows him to onboard and set up a holding company and four subsidiaries in a week or less.

Before Canopy, James was using text messaging and OneNote, and it took him closer to a month to complete the same tasks.

After less than three months of using Canopy, I had streamlined my process so efficiently that I was able to add $3,500 in monthly recurring revenue. -James Faughtenberry

America’s Choice Bookkeeping & Tax

Robert Azar, of America’s Choice Bookkeeping & Tax, uses Canopy’s client portal to keep in contact with clients all across the US. He asks his clients to sign up and upload all their documents into the client portal. Once his team is done preparing a tax return or financial statement for a client, his team sends the final document through the portal for their clients to easily review. Plus, the portal acts as a secure, convenient place for clients to continue to access sensitive documents when they need to.

Our clients love Canopy. It’s so easy for them to register for the portal and upload their documents there. -Robert Azar

Want to try out Canopy’s Practice Management suite for yourself? Sign up for a free trial here (no credit card required).



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