The importance of the right ERP for accountancy consolidation
To manage mergers and acquisitions fast, efficiently and easily, your ERP needs three essential attributes: flexibility, interoperability and configurability.
Consolidation in the accountancy industry is a growing trend. In such a highly competitive market, one of the only ways for practices like yours to compete is through economies of scale; to acquire companies and/or their assets. And, if you can do it faster, easier and more efficiently, you will raise your competitive advantage sooner.
But onboarding new practices is a huge undertaking. There’s due diligence, systems consolidation, process alignment and endless administration. In short, mergers and acquisitions (M&As) are costly, disruptive, risky, and the whole process can slow you down.
If your practice, as the purchaser, doesn’t have a modern, flexible enterprise system in place, M&A activity can cause even more headaches and raise more questions. The most important question is: which systems and processes do you use, those of the new entity, your own, or a combination?
Get your ERP in order
The smart strategy is to get your enterprise resource planning (ERP) system in order before you even embark on an M&A track. That way you can remain in control of the project and its future direction.
To successfully onboard a new entity or change the structure of the business — whether you’re acquiring an existing member of your network, adding a new legal entity, branch, cost center or profit center; or just changing the reporting structure — your firm needs a platform that allows you to make those changes quickly and efficiently and implement new practices.
The reality is that many new acquisitions will stay, at least for a period, as separate legal entities. So, you need to be able to onboard them, report on them and implement any new processes (while providing both management and statutory consolidation) without placing additional burden on what is probably a very busy finance team.
The three non-negotiable attributes of your ERP
The right ERP should allow you to onboard any new entity and ensure post-merger governance is handled with ease.
Today’s ERPs use a single source of truth, which improves data visibility and decision-making across multiple entities. It also helps to align organizational data, processes and departments, improving the operational efficiency of an otherwise disjointed company.
The new platforms have an architecture of ‘microservices’ (multiple components). They use application programming interfaces (APIs) — universal software connectors that allow systems to talk to each other. And they have a ‘low-code/no-code’ usability.
This means they can easily integrate with or extend out to other systems, even the existing third-party solutions of the new entity. The separate components can be easily rearranged to meet changing requirements. And processes can be easily re-configured by users with little or no IT expertise, which empowers your people and keeps system costs low during the changes which follow.
These ERP attributes of flexibility, interoperability and configurability are all non-negotiable if you want to buy another company or its assets, business segments or subsidiaries.
Finally, deploying an ERP like this creates the opportunity to modernize processes and structures; to adapt your culture and adopt new, more efficient ways of working — a great start to a new relationship.
All professional services businesses need to win more business, optimize billable utilization, execute profitable projects and bill with precision.
But, if you are also able to merge and acquire accountancy practices or their assets faster, easier and more efficiently, you will benefit from economies of scale, increase revenue and margins quicker, and raise your competitive advantage sooner in a highly competitive market.
Learn more about Unit4 ERP for Accountancy firms.