Why Your Firm Needs a Technology Account

The accounting industry spends billions of dollars each year on technology. Ten short years ago, the majority of that spend was in once-every-few-years equipment and software purchases. A firm could spend a few thousand dollars on a computer and software for each employee, then breathe easily for a few years until upgrades were needed.

Today, equipment is relatively inexpensive, to the point that computers and laptops are often considered a “throwaway” expense. And the days of purchasing a software package once and using it for multiple years are a thing of the past. Even a small a firm can easily spend several thousand dollars every year on “inexpensive” computer equipment and software as a service (SAAS) fees. Additionally, the prevalence of cloud accounting and the increasing popularity of remote workforces has made cybersecurity insurance and protection a must-have.

Technology is a critical part of your firm’s budget. But you must manage your technology spend properly; otherwise, what should be a key investment for your firm becomes a bloated overhead expense. Fortunately, there is a simple way to manage your firm’s technology budget.

Open a Technology Account

At Profit First Professionals, we advocate taking your cash management system beyond the core five bank accounts detailed in the Profit First book and leveraging additional accounts for strategic purposes. One account we always advise our member accountants, bookkeepers, and financial coaches to open is a Technology Account.

The purpose of this account is three-fold:

1. Once funded, you can easily take advantage of annual payment discounts for your SAAS subscriptions without having to leverage credit card debt.
2. By allocating a percentage of your firm’s revenue to your Technology Account, you can eliminate the guesswork about whether you are spending too much (or enough) on your firm’s technology.
3. Because you allocate a percentage of revenue to your Technology Account, your technology budget will naturally scale with your firm’s growth.

With a Technology Account, you can stop worrying about how to afford your firm’s technology stack, take the sting out of paying for it, and get back to helping your clients transform their businesses into profitable enterprises.