How to build an accounting tech stack

Tech stacks link multiple tools, passing data seamlessly and reducing the administrative burden for accounting practices.

An accounting tech stack can simplify and enhance your practice processes. Gone are the days of uploading the same information to multiple programs or signing out of software so that your colleague can take over. Now, you can build a system that involves multiple tools but feels like a single practice workflow.

What is an accounting tech stack?

A tech stack is a collection of tools and apps that connect – or ‘stack’ – together to form a complete system. You can find examples across industries – marketing tech stacks, operations tech stacks, and finance tech stacks.

Some tools automate admin entirely. For example, approvals software automatically sends invoices to the right approver before they’re sent. Stack this approvals software with a digital payments tool, and you could shorten the time between sending an invoice and receiving the money.

The key to any accounting firm’s tech stack is putting proper thought into which tools will benefit you most. It’s not about having as many apps as possible – it’s about cleverly curating your stack.

Benefits of a well-integrated tech stack

The right accounting tech stack will save you time, improve your services, and create new opportunities for you and your clients. The benefits are far-reaching and include:

1. Improved efficiency and accuracy: Integrated apps pass data between each other, so you don’t lose time manually updating information in multiple systems. And because this data flows seamlessly between apps, there’s less room for human error.
2. Increased scalability: Chasing up clients by email or phone works when you’re contacting one or two clients. But if you’re working with tens or hundreds of clients – and you need to call every single one – this process isn’t scalable. App stack tools grow with you, meaning your processes work with 10 or 1000 clients.
3. Enhanced decision making: Apps allow you to collect and analyse data across various practice and client functions – data which can bolster your advisory and expertise, and help you deliver even more valuable advice.
4. Better tools for analysis: Integrating reporting apps with your accounting software gives you access to beautiful data visualisations, projections, and reports. Perfect for sharing with clients, or managing practice efficiency.
5. Better practice and client collaboration: Using integrated apps with your cloud-based software means you can work from anywhere. Collaborate with your clients and team at the same desk (or on different continents).

Examples of when tech stacks are useful

Tech stacks can help with almost every process in your practice.

For example: when a client approaches you for the first time, a tool that handles proposals, contracts, and onboarding could help you standardise and professionalise those first few steps.

When work is in full swing, you might also benefit from a data capture tool. Something where clients can snap a photo of their receipts, invoices, and bills, and send them directly to their accounting software.

Throughout the client project, you’ll need to store and share information. A document management tool is helpful here – you can keep information centrally and securely. And when it comes to billing the client, look no further than a digital payment tool that automatically collects money when an invoice is due.

At the end of the project, you’ll want to review practice efficiency, productivity, and profitability. An analytics tool will help you discover new practice insights – and client insights you can use for advisory.

When all of these tools link back to a central hub – like Xero – you have a connected system for managing the entire practice workflow.

Choosing the right technology stack for your accounting firm

We’d recommend building your software stack one block (or tool) at a time. This will give you the best chance of integrating each new piece of software successfully.

It begins with your central platform – Xero. This will be your hub; a core piece of accounting technology that links all other tools together. Having a central piece of software that offers most of the functionality your practices and clients need means you can focus on building a curated tech stack.

It’s not about having the most apps – instead, you can be selective about the functionality you add. Think of this as a ‘hub and spoke’ approach – with Xero providing the core features you need to run your practice, and a handful of apps providing additional functionality.

When it comes to adding apps, look at your biggest practice challenge or opportunity. Pick one process or task that has the most room for improvement, then search the Xero App Store for a tool that addresses it. Consider your practice needs now and in the future – ideally, you want tools that are simple to use but have enough functionality to grow with your practice.

Once you’ve integrated that tool, tested it with clients, and feel confident using it, you can target another area of your practice. Be sure to keep backup copies of data while you transition to new tools (just to be on the safe side). Some tools will just be for your practice, others will be for clients. Trialling client-facing tools with a small group will help you find the right ones for your practice.

And don’t just pick tools based on accounting trends. New technologies are worth exploring, but if they aren’t serving a purpose in your practice, leave them out of the stack. Focus on the challenges and opportunities in your practice, and your client needs. For example, if clients need help with cash flow forecasting or automating accounts payable, start there.

Adding a single app at a time to your technology stack will also help with staff training. Ensure all staff are confident with the current tools before moving on to the next. Xero certification is always there to help you brush up on your skills.

How Xero integrates with other applications

The Xero App Store is home to a range of tools that help you with onboarding, invoicing, approvals, reporting, and payroll.

Some popular tech stack app integrations with Xero include:

• Syft: An all-in-one tool for reporting, forecasting, analysis, consolidation, and benchmarking
• Ignition: A smart onboarding and client management tool with professional and customisable proposals, client agreements, and billing features
• FYI: A cloud document management tool with smart process automation features
• GoCardless: An automated payment collection tool that picks up payments from clients’ bank accounts when invoices are due
• Dext Prepare: Document capture software as simple as snapping a photo of a receipt, invoice, or bill – and sending it to Xero

Optimise your accounting practice with the right tech stack

Building an accounting tech stack with Xero means you get access to industry-loved tools alongside inbuilt functionality. The Xero App Store makes Xero completely customisable for your practice, so you can build a tech stack that works for both your team and your client base.

Before you get started, check out our recent report on accounting tech stacks, where we take a closer look at the commercial benefits of building a practice tech stack. Learn how you can leverage the advantage to save time on manual tasks, increase revenue and profit, and delight your clients.