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Are You Overpaying for Software? How Companies Can Maximize ROI in the SaaS Jungle

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As software expenses continue to rise, accounting departments are faced with the daunting task of managing these investments effectively. In a recent webinar, Jason Parker of FinQuery dives deep into the critical importance of effective software management in today’s business landscape. With software expenses, particularly in the SaaS space, becoming a larger portion of business budgets, organizations must prioritize proactive strategies and processes to manage these investments effectively.

The Growing Importance of Software Spend Management

Parker begins by discussing the rapid growth of software spend, particularly in the SaaS space, and the need for businesses to prioritize effective management strategies. As he points out, “Finance, of course, is responsible for making sure that the money spent at an organization returns the commensurate value that you’re looking for. So if I’m a finance professional, I want to make sure I have visibility into spend across the organization.”

Effective management is increasingly critical, with software expenses becoming a larger portion of business budgets. Organizations must understand and optimize software spend across various departments and functions to ensure investments align with business goals and deliver value.

The Challenges and Risks of Limited Visibility

One of the biggest obstacles to effective software management is limited visibility into software investments. Parker explores the challenges and risks associated with this lack of transparency, including:

  • Siloed decision-making
  • Complex contract structures
  • Inadequate understanding of software usage

These factors can lead to suboptimal renewal decisions, security risks, and wasted resources. Companies need to adopt a cross-functional approach and centralized processes to mitigate these risks and navigate the complexities of software management.

The Path to Optimization: Data-Driven Strategies and Processes

So, what can companies do to optimize their software investments and drive long-term success? Parker outlines several key strategies and processes, including:

  • Centralizing contract management
  • Automating IT processes
  • Making data-driven purchasing decisions

As he emphasizes, “You want to be intentional about this. You got to make sure that what you’re using these tools for is solving the intended problems.”

Another crucial aspect of effective software management is measuring success through metrics like subscription spend per resource and license utilization rates. Parker notes, “What we see today is that almost every business is overspending on software because they don’t have the information they need to make the best decision. Managing that subscription spend per resource is important because just about every business out there can reduce that spend and obtain even more value in their investments.”

By adopting these data-driven strategies and processes, companies can optimize their software investments, mitigate risks, and ensure their investments align with business goals and deliver value.

The Bottom Line: Prioritizing Software Asset Management for a Thriving Company

In an increasingly software-driven world, effective software management is no longer a nice-to-have but a critical imperative for companies seeking to thrive. As businesses become more reliant on technology, companies prioritizing cross-functional collaboration, centralized processes, and continuous optimization will be best positioned to navigate the complexities of software management and drive long-term success.

By adopting the strategies and processes outlined by Parker, companies can optimize their operations and better serve their clients in navigating the complexities of the digital landscape. To learn more about how your firm can master the art of software management, be sure to watch the full webinar recording.

Earmark Launches Rebuilt App, Empowering Accounting Pros to Earn CPE Anytime, Anywhere

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PHOENIX, April 25, 2024 – Earmark, the leading platform for earning CPE and CE credits for enjoying podcasts, videos, and live streams, today announced the launch of its wholly rebuilt mobile app and new web app. The ground-up rebuild enables Earmark to provide a more seamless and efficient way for accounting professionals to earn continuing education credits anytime, anywhere.

The Earmark web app is available at earmark.app and allows accounting and tax pros to access and complete courses in their web browser, providing greater flexibility and convenience. Additionally, creators can embed courses directly on their websites, extending Earmark’s reach further. The rebuilt mobile app, available on iOS and Android, offers improved performance and user experience.

“Our rebuilt app and new web app represent a significant step forward in our mission to revolutionize the way accountants earn continuing education credits,” said Blake Oliver, CPA, founder and CEO of Earmark. “By providing a more accessible, flexible, and user-friendly platform, we empower CPAs, CMAs, and EAs to take control of their professional development and earn continuing education credits on their own terms.”

To date, Earmark has served over 10,000 users, offering 1,300 courses and enabling accounting professionals to earn an impressive 65,000 CPE credits.

K.C. Eames, Director of Client Accounting Services at Dark Horse CPAs, has seen the benefits of Earmark firsthand: “At Dark Horse CPAs we decided to try the unlimited team subscription to Earmark, and it’s been a success! People love the ability to earn CPE when driving, taking walks – it just fits into our schedule. It’s also nice to get some time away from the computer and still be able to earn credits. There are tons of shows/channels, lots of relevant industry topics to choose from. And since it’s unlimited, it’s low stakes to try out episodes.”

At Dark Horse CPAs we decided to try the unlimited team subscription to Earmark, and it’s been a success! People love the ability to earn CPE when driving, taking walks – it just fits into our schedule. It’s also nice to get some time away from the computer and still be able to earn credits. There are tons of shows/channels, lots of relevant industry topics to choose from. And since it’s unlimited, it’s low stakes to try out episodes.

K.C. Eames

To experience the benefits of the new Earmark app, accounting professionals can create a free account at earmark.app or download the updated app on the App Store or Google Play Store.

About Earmark: Founded in 2022, Earmark is the leading platform for accounting and tax professionals to earn CPE and CE through podcast courses. With a growing library of educational and entertaining podcast courses accessible through its mobile and web apps, Earmark provides a convenient, flexible, and high-quality continuing education experience. Earmark is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. Earmark is registered with the Internal Revenue Service (IRS) as an approved continuing education (CE) provider.

Press Inquiries: Please email press@earmarkcpe.com.

How Auditors Can Bridge the Expectation Gap and Provide More Value

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The audit profession faces significant challenges, including evolving business models, high staff turnover, and a growing “expectation gap” between auditors and clients. The expectation gap refers to the difference between what clients believe auditors should be delivering versus the limited insights they often receive from traditional audit approaches.

In a recent episode of the Earmark Podcast, Alan Anderson, a renowned audit innovation leader, discussed the pressing need for a paradigm shift in the audit profession to address these issues.

Alan’s message is straightforward: In order to bridge the expectation gap and continue playing its crucial role, the audit profession needs to move away from its conventional compliance-focused approach. Instead, auditors should adopt a more proactive, insights-driven methodology that prioritizes comprehending clients’ businesses and offering timely, actionable recommendations.

The Expectation Gap: A Chasm Between Auditors and Clients

The current audit approach often fails to meet clients’ expectations. Auditors tend to focus on validating ending balances rather than understanding the entire transaction flow. For example, Alan described a client where 100% of transactions were based on container barcodes, but the auditors didn’t test the barcode system. They just traced numbers between reports without understanding the business.

Alan points out, “The expectation problem is that audits start at the end after the year-end has closed, and they start with those ending numbers, those aggregated amounts on the balance sheet or income statement. And then they test some of those items. The real gap is auditors don’t understand how the transaction even got into the general ledger.”

The expectation problem is that audits start at the end after the year-end has closed, and they start with those ending numbers, those aggregated amounts on the balance sheet or income statement. And then they test some of those items. The real gap is auditors don’t understand how the transaction even got into the general ledger.

Alan Anderson

To narrow the expectation gap, auditors must shift their focus to understanding transaction flows from inception through the system, providing more timely insights and value to clients. Addressing this gap is crucial for the audit profession to maintain its relevance.

Turning the Audit Upside Down: The Bottom-Up Approach

Auditors must adopt a bottom-up approach to understanding transaction flows to provide more value and timely insights. Alan emphasizes, “We need to think about turning our audit upside down. Rather than starting at the top, at the balance, and working down into the items, we need to start from the bottom up. When we start from the bottom up, we can be much more timely. We can be much more understanding of what’s happening to business.”

We need to think about turning our audit upside down. Rather than starting at the top, at the balance, and working down into the items, we need to start from the bottom up. When we start from the bottom up, we can be much more timely. We can be much more understanding of what’s happening to business.

Alan Anderson

This contrasts with the traditional “top-down” approach of starting with account balances and working backward. The bottom-up approach involves:

This bottom-up approach involves:

  • Starting with understanding transaction flows from the beginning
  • Working up to the financial statements
  • Providing real-time insights and understanding of the business
  • Offering greater value to clients

By adopting this approach, auditors can level out their workload, reduce the intensity of busy season, and deliver more meaningful insights to their clients.

The Power of Industry Specialization

Audit firms must specialize in specific industry segments to avoid commoditization and provide unique value to clients. As Alan notes, “When you try to be the pure generalist, doing any type of client of any type of industry, you’re just going to be a commodity provider. But I do believe that we can provide relevance in what we do if we set our mind to it, and our clients will see value.” 

When you try to be the pure generalist, doing any type of client of any type of industry, you’re just going to be a commodity provider. But I do believe that we can provide relevance in what we do if we set our mind to it, and our clients will see value.

Alan Anderson

Firms that specialize in specific industry segments and perform data-driven audits are more likely to:

  • Survive in a competitive market
  • Provide valuable insights to clients
  • Understand their clients’ businesses better
  • Offer more relevant advice

Generalist firms risk becoming commodity providers, unable to differentiate themselves or deliver unique value. Industry specialization is key to the paradigm shift needed in the audit profession.

Leveraging Technology and AI

Emerging technologies such as AI and blockchain have immense potential to enable the transformative, bottom-up audit approach Alan advocates. These tools can automate routine tasks, flag unusual transactions for auditor review, and continuously monitor systems.

For example, Alan describes putting an “audit bot” on a client’s system to analyze transaction flows and remove outliers. The auditor then interprets if flagged items are errors or fraud. This frees auditors to focus on understanding the business and providing valuable insights.

However, firms must approach technology purposefully. As Alan cautions, many firms have thrown technology at audits without rethinking their underlying processes. Technology should enable a fundamentally transformed audit methodology, not just a way to digitize existing checklists.

Potential Challenges and the Path Forward

Shifting to a bottom-up, data-driven audit approach is not without challenges. It requires significant investments in training, technology, and developing industry specializations. Staff may initially resist moving beyond familiar checklists. Firms will need to overhaul long-standing practices and fee structures.

However, the benefits are clear. Auditors will provide more value, gain deeper business understanding, and enjoy more engaging work. Clients will receive timely insights to improve their operations. The profession can reverse high turnover by making audits exciting again. 

 Alan shares, “I worked with a firm experiencing turnover at levels equal to that of every firm in the country. They worked with us for a year, and their turnover went to zero. Three people left and wanted to come back. Those staff were having fun. They were enjoying what they were doing. And guess what? Their quality went up.”

I worked with a firm experiencing turnover at levels equal to that of every firm in the country. They worked with us for a year, and their turnover went to zero. Three people left and wanted to come back. Those staff were having fun. They were enjoying what they were doing. And guess what? Their quality went up.

Alan Anderson

Transforming Audit: An Imperative for the Profession’s Future

The audit profession stands at a crossroads. Maintaining the status quo is not an option in a rapidly changing business world. Forward-thinking firms will abandon a narrow compliance focus and transform their approach to deliver valuable insights and thrive in the future.

Auditors have a clear choice: cling to an outdated model and slowly becoming irrelevant, or seize this opportunity to reimagine their role and secure their position as indispensable business advisors. The future of audit is exciting – for those bold enough to create it.

To learn more about the need for a paradigm shift in the audit profession and how auditors can adapt to provide more value to their clients, listen to the full episode of the Earmark Podcast featuring Alan Anderson. 

To learn more about transforming your audit practice, read Alan Anderson’s book Transforming Audit for the Future from CPA Trendlines.

The Power of Transparency: How Accurate Compensation Data is Transforming the Accounting Industry

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Are you getting paid what you’re worth? It’s a question many professionals ask, but finding reliable answers can be challenging.

Having accurate and transparent compensation data is crucial for accounting professionals to advocate for fair pay and for firms to attract and retain top talent in an increasingly competitive industry. Fortunately, Dominic Piscopo, Founder of Big Four Transparency, has the data. In a recent webinar, he shared what he learned, and we’ve summarized the key takeaways for you in this article.

The Birth of Big Four Transparency

Dominic learned the hard way about the significance of paying people what they deserve. While working at one of the Big Four accounting firms, he realized he was being paid much less than other firms in the area were paying people with similar skills. This discovery made him frustrated and unhappy with his job, even though he liked everything else about it.

Piscopo was inspired to create Big Four Transparency, a crowdsourced compensation database that helps accounting professionals know what they’re worth and assists firms in staying ahead of the curve.

Dominic explains that “Big Four Transparency is essentially a giant crowdsourced compensation database. The front-facing function is to help accounting professionals gain access to high-quality compensation data. This is meant to help guide you in your career, help you advocate for the type of compensation you should be looking for in today’s market, and keep you up to date on the evolutions of that.”

Big Four Transparency is essentially a giant crowdsourced compensation database. The front-facing function is to help accounting professionals gain access to high-quality compensation data. This is meant to help guide you in your career, help you advocate for the type of compensation you should be looking for in today’s market, and keep you up to date on the evolutions of that.

Dominic Piscopo, founder of Big 4 Transparency

The accounting industry is experiencing a growing demand for dependable compensation data, as evidenced by the popularity of platforms such as Big Four Transparency. According to Dominic, almost a quarter of a million professionals have utilized his platform alone. As more employees seek out this information, firms prioritizing transparency will have a competitive edge in attracting and retaining the best talent.

The High Cost of Inaccurate Compensation

Compensation is crucial for accounting firms, as it directly impacts their profitability. The workforce generally constitutes the most expensive part of the business. If the firm pays its employees excessively, it may significantly impact its profits.

But the costs of underpaying employees can be just as severe, including:

  • Constrained resources for taking on new work, sacrificing firm growth and valuation 
  • Loss of institutional knowledge due to high employee churn
  • Disrupted team dynamics and low morale, which leads to more turnover
  • High recruiting and onboarding expenses that can exceed the cost of raising salaries to market rates

Accurate compensation data helps firms make informed decisions that balance financial considerations with employee satisfaction and competitiveness in the market. By investing in the correct data, leaders can develop strategies to optimize costs while attracting the talent needed to drive growth.

Navigating the New World of Work

As remote work becomes more prevalent, accounting firms must adapt their compensation strategies. Piscopo emphasizes the importance of considering the office model (remote, hybrid, in-person) when setting salaries.

For example, remote-first firms should assess whether they need to target high-cost-of-living talent markets. These firms can offer competitive pay while maintaining profitability by carving out certain expensive cities from their compensation benchmarks. However, firms may still need to include those geographies for roles requiring specialized skills concentrated in pricier areas.

The Power of First-Party Data

To make sound compensation decisions, firm leaders should prioritize first-party data over other sources. Salary guides from recruiters and data shared among firm alliances can be prone to bias and lack granularity.

In contrast, first-party data sourced directly from employees is less biased, more detailed, and provides greater confidence in accuracy. Piscopo advises firms to invest in accessing reliable first-party compensation benchmarks to stay ahead of the curve.

The Importance of Nuanced Analysis

Throughout the webinar, Dominic stresses the value of granular data. He shares how filtering out a few high-cost-of-living cities can significantly impact salary benchmarks, even at the entry level. 

When analyzing compensation data, firm leaders should examine both averages and percentiles. Averages provide an excellent high-level view but can be skewed by outliers. Percentiles are less sensitive to outliers and lend themselves well to setting salary bands.

Dominic recommends using the 25th, 50th, 75th, and 90th percentiles to establish pay bands with room for progression. For example, a first-year senior accountant might start at the 25th percentile, while a high-performing third-year senior could reach the 90th percentile.

Firms should also dig into granular data cuts, not just overall ranges for a role. Drilling into specific cities, experience levels, and service lines can reveal essential nuances. For instance, firms should avoid grouping higher-paid advisory/consulting roles with audit/tax positions.

Leveraging Data to Spot Red Flags

Beyond informing pay decisions, compensation data can help leaders identify potential organizational issues. Piscopo shares an example of how comparing a firm’s average weekly hours to industry benchmarks might reveal understaffing. By proactively addressing these red flags, firms can boost retention and productivity.

Compensation platforms can also provide insights into job satisfaction through factors like the office model. For instance, if remote employees consistently report higher fulfillment, firms might consider expanding virtual work options. 

Recognizing Data Limitations

While compensation data is a powerful tool, firm leaders must also understand its limitations. Piscopo cautions that small sample sizes can skew benchmarks, particularly when segmenting by role, city, and experience level factors.

He suggests strategies like grouping together geographically and economically similar cities to draw reliable conclusions from limited data. Firms should also be transparent about any limitations and avoid misleadingly presenting data.

The Risks of Relying on Negotiations

Piscopo points out that relying on candidate salary demands is risky, as most applicants won’t disclose the minimum they’re willing to accept. Firms that base pay decisions on these negotiations may end up overspending.

Instead, leaders should ground compensation strategy in data. By understanding the market through a data-driven lens, firms can develop salary bands that balance external competitiveness with internal equity and profitability.

Embracing Transparency, Driving Growth

In today’s competitive landscape, accurate compensation data is more than nice to have – it’s a critical tool for driving firm growth and profitability. By investing in first-party data, analyzing the nuances, and proactively identifying issues, accounting firms can optimize their talent strategies to attract top performers and boost retention.

The demand for pay transparency will only continue to grow. Firms that embrace this trend and arm themselves with reliable data will be best positioned to navigate the challenges of the evolving industry. In the words of Dominic Piscopo, “Compensation is usually the highest cost item for accounting firms. If you don’t get it right, it will cause some issues.”

The Hidden Costs of Business License Non-Compliance: How to Protect Your Company’s Reputation and Bottom Line

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Imagine your business making headlines for all the wrong reasons – a news crew at your doorstep, questioning why you’re operating without proper licenses. The reputational damage alone could be devastating, not to mention the potential financial and legal consequences. In today’s complex regulatory landscape, effective business license management is more critical than ever to ensure compliance and avoid costly pitfalls.

In a recent eye-opening webinar, Alan Ruttenberg and Vicky Basile from Avalara dive deep into the often-overlooked world of business license compliance. They shed light on the dire consequences of non-compliance and emphasize the importance of effective license management. 

Let’s explore the key takeaways from their discussion and discover how your business can navigate the complexities of licensing requirements.

The High Cost of Non-Compliance

Non-compliance with business license requirements can lead to severe penalties and consequences that can jeopardize a business’s success and reputation. Financial penalties can range from small fines to significant amounts impacting a business’s bottom line. At the same time, legal consequences can include misdemeanors, court appearances, and even jail time in some cases.

The most devastating consequence of non-compliance is the potential for reputational damage. Alan Ruttenberg shares, “I always cite this person named Gladys; she had a catering business. She had a license, a food license that had expired… She found out because the local news station did a report on businesses that are out of compliance within the municipality, and they sent camera crews to her catering business and forced their way in and tried to interview her staff about why they don’t have their business license.” 

The negative media coverage and public perception resulting from such incidents can be hard to quantify but devastating to a business’s image and customer trust.

The Complexity of Industry-Specific Requirements

Adding to the compliance challenges is that business license requirements vary widely across industries. Some industries, such as healthcare, food service, and construction, face more stringent and extensive licensing requirements due to public health and safety concerns. Failing to meet these industry-specific requirements can lead to severe consequences. 

As Vicky Basile points out, “They can also come down and come in and shut down your business. I’ve been on construction sites where the inspector comes and lines all of the contractors up and asks for their licenses. All the electricians and plumbers, and if they don’t have them, they have to leave the job site.”

To effectively navigate these complexities, businesses must develop robust management strategies tailored to their unique compliance needs. This involves staying up-to-date with industry-specific regulations, maintaining accurate records, and proactively managing license renewals and applications.

The Critical Role of License Management in M&A

Business license management becomes even more critical during mergers and acquisitions (M&A). While an issue with business licenses usually won’t jeopardize a merger or acquisition, it can create problems after the deal is complete.

As Alan Ruttenberg explains, “Business licenses don’t just transfer. You don’t buy the business licenses from the company that you’re obtaining. There are big ramifications to not getting a head start on transferring the licenses from the acquired entity to the acquiring entity. This is something that can trip up a lot of M&As.”

Failing to transfer licenses during M&A properly can lead to significant disruptions and risks for the acquiring entity, including the inability to operate in certain jurisdictions or complete ongoing projects. To mitigate these risks, businesses must incorporate compliance considerations into their due diligence and integration processes, ensuring a smooth transition of licenses and permits.

Navigating the Path to Compliance

So, how can businesses navigate the complex world of business license compliance and avoid the pitfalls of non-compliance? Here are some key strategies:

  1. Conduct a thorough audit of your current licenses and permits to identify any gaps or upcoming renewal deadlines.
  2. Invest in robust license management software or services to streamline the tracking, application, and renewal processes.
  3. Stay informed about industry-specific regulations and requirements and develop tailored compliance strategies.
  4. Foster a culture of compliance within your organization, emphasizing the importance of proactive license management.
  5. Seek guidance from compliance experts or legal professionals when navigating complex licensing issues, especially during M&A.

As the regulatory landscape evolves and becomes more complex, the importance of proactive and effective business license management will only continue to grow. Businesses prioritizing compliance will be better positioned to avoid costly consequences and maintain a competitive edge in their industries.

Don’t let non-compliance derail your business. Take action today to ensure your licenses are in order and your compliance strategies are robust. To learn more about the real-world implications of business license compliance and practical strategies for effective management, watch the full webinar featuring Alan Ruttenberg and Vicky Basile from Avalara.

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