How much does accounting practice software cost?

How much does accounting practice software cost? 

The cost of accounting practice software can vary massively depending on your accounting practice's functionality, pricing structure and the size of your practice.  

There are many different pricing structures, tiers, and packages available, which we will discuss later in this article, but you can usually divide cost considerations into two categories, which reflect the way the software is hosted: 

• Cloud-based accounting practice software pricing. 

• On-premise accounting practice software pricing. 

Let us look at them in detail. Keep in mind though that offers for this type of product never stay the same for too long. Providers regularly update fees and pricing structures to remain competitive in the market or as new features are released. 

Cost considerations for cloud-based software for accountants 

Cloud accounting practice management software usually comes with two choices: SaaS or cloud desktop. 

SaaS (software-as-a-service) is sometimes referred to as browser-based, web-based, or cloud-native software. The user interface in this scenario is a web page accessed via the user's browser. Its servers are typically outside the firm's local area network, and users control and run the software and process data from their local desktop devices.  

Cloud desktop software is still SaaS but uses a Remote Desktop Protocol (RDP). The RDP connects desktop PCs and laptops to operating systems and applications running on a remote server in the cloud.  

Cloud-based practice software: 

• Tends to be subscription based, for example, a monthly fee per user. 

• For your fee, cloud-based practice management software is usually maintained and updated in a secure cloud environment by your software provider. 

• Can typically be activated from any device with internet access supporting the software. 

• This arrangement is often described as the newer, modern way to buy/sell software. 

We take a deeper look at the undeniable benefits of the cloud in the following guide: A guide to cloud practice management software. 

Cost considerations for on-premise software for accountants 

On-premise accounting practice management software: 

• Tends to be licence based. 

• The software is loaded onto local hardware at the accounting firm's premises and maintained by the accounting firm's staff. 

• An on-premise software licence tends to be limited to the device it was originally intended for and physically installed to that device only. 

• This arrangement is often described as the old-fashioned way of buying and selling software. 

Additional cost considerations for on-premise accounting practice software 

In addition to the main pricing elements, there are other accounting practice management software costs that accounting professionals may need to consider. 

• Number of users

• Training and set up fees 

• Integration fees 

• Add-ons: additional features may not be included in any of the monthly plans and are charged as optional add-ons.  

Types of pricing plans for accounting practice software 

When you are researching the market for accounting practice management software, you will find a variety of billing options that depend on your budget and the unique needs of your accounting practice. Let us look at some of the most common accounting software pricing plans. 

SaaS accounting practice software prices 

A Software as a Service (SaaS) subscription is a pay-as-you-go service that charges users with a periodical flat rate, making it easier for firms to stay within a budget for their accounting software costs. SaaS applies to cloud-based accounting practice management software solutions, and often the software provider will not require an accounting firm to commit to a subscription permanently. 

There are various types of SaaS subscription plans available for accounting practice software solutions, so you should be able to choose the one that is most convenient for your firm: 

Freemium pricing plans for accounting practice software 

The freemium pricing model is best known for its usage in mobile apps for Apple or Android. It is where users can operate an application for free but will be charged for additional services or features. This option is ideal for accounting firms looking for quick, one-time accounting solutions or those that will be applied to lower-level tasks in your practice. 

Monthly subscription plans for accounting practice software 

A monthly subscription plan is usually more convenient if your firm prefers billing in smaller increments for its accounting software or if you are merely testing things out.  

Monthly subscription packages will usually apply a tiered pricing strategy. This simple solution makes accounting software billing easier for accountants and bookkeepers to digest and allows software providers to account for differing use levels.  

Tiered pricing strategies will usually be accessible for software providers to mitigate pricing increases and keep accounting firms on board with the software when their needs change or the firm experiences growth.  

A typical tiered pricing strategy will usually consist of the following three tiers:  

• A basic plan,  

• A standard mid-range option that has more capability than the basic plan, and 

• A premium top-end version with extra upgrades. 

Annual subscription plans for accounting practice software 

Annual subscription packages will follow the same tiered billing strategy as the monthly subscription. Still, they will save you more on your accounting practice software costs, as most providers will offer considerable discounts on an annual commitment vs. accounting software monthly billing. 

Per-user plans for accounting practice software

Another common SaaS pricing plan for accounting practice management software is per-user. This will usually be aimed at larger accounting firms with more employees.  

Generally, the more licenses a firm has, the lower the price per license is for all users. 

With the per-user plan, the pricing can sometimes be tiered. With tiered per-user pricing, accounting firms would receive a discount for exceeding a certain number of licenses, but the discounts are applied across the tiers, not the entire purchase. 

Per-feature plans for accounting practice software 

Per-feature accounting practice software pricing is often in the form of tiered pricing. It usually involves accounting firms buying feature "bundles" or packages specific to their needs.  

Rather than the per-user pricing plan, where firms upgrade to another pricing tier for more users, they will upgrade for additional functionality for their accounting software. 

One-time accounting practice software costs 

One-time billing for your accounting practice management software is more likely to be applied to on-premise practice software.  

Accounting practice software costs within the one-time pricing plan will involve more significant capital expenditure. Still, they can be a more cost-effective billing solution for firms installing, configuring and maintaining their software in-house. 

Things to consider before buying software for accountants 

Before you commit to accounting practice software, there are a few factors you will need to consider first. If you want to really see the true benefits of investing in software for accountants, you will need to ensure that the software you select can meet your practice's accounting needs. 

Take note of the following: 

• Consider your budget: the accounting practice software you choose will reflect on how much of your practice's budget you are able to allot to it. Cloud-based software will be your best bet if you are looking for predictable costs. 

• Identify your accounting practice needs: what do you really need accounting practice software for? Is it to simply make your compliance tasks easier, or are you looking for something which can assist you in running your entire accounting practice? Before you make that commitment, you will need to do your own research and try to visualise how you might be able to maximise the features of each offering, and whether that gels with your practice operations. 

• Determine what your practice will need in the long run: it is a good idea to research accounting software solutions that will be flexible enough to grow with your practice. That way, you can ensure that the accounting practice software will be able to cater to your needs no matter what changes your practice undergoes. For more on this topic, download our eBook: how to future-proof your practice. 

Accounting practice software costs based on practice size 

Every accounting practice has its own needs, and the responsibilities of sole traders and smaller accounting practices is vastly different to growing medium-sized accounting practices or large firms.  

Accounting software providers will often offer practice solutions based on the size and needs of accounting practices. 

Therefore, to answer “how much does accounting software cost?” effectively, it would depend on the size of your accounting practice, its requirements and how it operates. 

To make things easier to digest, we have broken down the next section of this article into accounting practice sizes: 

• Small accounting practices 

• Medium accounting practices 

• Large accounting firms 

Small accounting practices 

Small accounting practices, in this instance, refers to: 

• Sole traders, such as tax agents 

• Micro accounting practices with 1 to 4 employees 

• Small, growing accounting practices with 5 to 19 employees 

Smaller accounting practices will often require less complex software to accomplish tax, compliance, or bookkeeping tasks. Smaller accounting practice software usually consists of features to help automate manual tasks such as data entry, streamline compliance, and manage practice cash flow. 

Pricing plans in this category will usually be in lower price brackets with a smaller number of users, to keep the software affordable for smaller accounting practices and tax agents.

The Access Group’s HandiTax Cloud is designed with the needs of small business owners and tax agents in mind, it's an easy-to-learn, intuitive software that helps small accounting practices to prepare and lodge their client tax returns, faster, and from anywhere. 

Medium-sized accounting practices 

A medium-sized accounting practice, in this instance, refers to practices with 20 to 100 employees. 

Often, these practices are growing and are looking to utilise best-in-class, cloud-based accounting software, which can give their accounting practice a competitive edge by increasing productivity through more efficient practice insights. They are concerned about improving their practice workflows and client experience. 

Mid-sized accounting practices may find it difficult to manage the increased number of employees and will likely look to harness the power of their client and practice data. Using software like ZAP Data Hub gives them instant access to data and insights to make data-driven decisions across their practice and better manage their employees. 

Mid-sized accounting practices also have more clients to manage, so will look for software that has superior client management capabilities, so they can optimise practice resources to maximise current and future client opportunities in real time.  

Large accounting firms 

A large accounting firm, in this instance, refers to practices with over 100 employees. 

Large accounting firms looking at accounting practice software costs will be looking to revamp their entire firm, with best-in-class software that can help them advance every aspect of their firm, including tax, compliance, and practice management. They will generally want integrated software with a large number of users so that they have a seamless workflow in their firm. 

Used by 3 of the 4 top accounting firms, APS software is a fast and powerful solution, designed to meet today's workforce requirements, improve productivity, and get the most out of firm employees with a single platform. 

How to determine ROI when using accounting practice software 

Like any decision you make for your accounting practice, the return on investment (ROI) is based on how much time and money the accounting practice software saves you.  

If you or your employees waste a lot of time on manual administrative tasks, it will quickly pay for itself.  

There are other benefits from the top accounting practice management software, too, such as: 

• Accessing all your client information from one centralised location, enabling you to connect with your clients on a level you have never experienced before when using client management software. 

• Saving your accounting practice valuable time through smart automation through workflow software that you can configure workflows to suit how you want to work. 

• Giving you complete visibility of your accounting practice's performance through intuitive data-driven accounting practice reports and insights. 

• Working more efficiently with the potential for greater focus on your staff, jobs, and time management, with time and billing software for accountants. 

• With tax management software, preventing costly mistakes for your practice and maximising your efficiency for tax preparation, lodgement, and management during the busy tax season. 

• Creating consistency in your financial reporting process with general ledger software. 

• Be able to provide valued advisory services to your clients with information and insights they need to make data-driven decisions, using data management and analytics software. 

For more information on how a digital workplace can benefit your accounting practice, refer to our article: digital transformation in accounting. 

What features are included in accounting practice management software? 

Typically, accounting firms will be looking at software that can help them to run their entire practice, known as accounting practice management software. 

To find out more about practice management software and why it is essential to your practice, read our article for more guidance: Why do you need accounting practice management software? 

Most accounting practice management software packages include workflow management, client management, time and billing, and reporting and insights.  

Integrations may also be a feature you look for – where you connect your software directly to a third-party system.  

How to get low-cost accounting practice software 

Choosing the right accounting practice management solution can be difficult. As we have discussed, there are many variables that come into play.

The first step is to determine roughly how much you are willing to spend and your estimated number of users. This will rule out software you cannot afford right now.  

The next step is to establish what features you need, but to have an eye on the future and what that may hold for you: 

• Look for free trials or product demos for accounting practice management software. If you are unsure how well the package will work for you and how much it will cost long-term, then try it out if you can.  

• Don't go for the cheapest option. You get what you pay for, and you need to avoid purchasing accounting practice management software that is difficult to use and does not meet your requirements ‒ for the sake of a few dollars per user.  

• Ask the vendor how they will handle implementation and how much it will cost. For example, will they help you migrate your data? If not, will you have to spend hours transferring all that information over by yourself?

• You should also find out what fees you will pay if you decide to end your contract early or decrease users or features. If you're not on monthly pricing, most companies will not allow free downgrades or cancellations before the full contract.

We believe in offering cost-effective accounting practice management software that makes it accessible to accounting professionals regardless of their practice size. 

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But now, it is over to you. See if our software for accountants is best for your business and to discuss pricing further, and how our software might work for you in more detail, talk to a specialist today.