As with so many applications, exactly what “practice management” software entails depends on who is doing the defining. Different vendors describe practice management as everything from time & billing to workflow management. And to some extent, each of these tasks and many more can be considered part of practice management. At its most basic, anything that’s related to effectively running an accounting or consulting practice is a facet of practice management.
That opens the door to a wide range of tasks under the practice management umbrella. If it’s critical to running your firm, then it most certainly is a component of practice management, like managing the engagement process, work in process, due date scheduling, timekeeping (whether for billing purposes or for computing realization rates when value billing is used), and tracking other applications such as write-up and tax prep.
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accompanying comparison chart, you’ll notice that different vendors have taken very different approaches with their applications. That’s a good thing, as it offers a wider variety of capabilities that will hopefully sync up with your firm’s needs without providing lots of unneeded functionality. Molding your system As a general rule, practice management systems have at least one or more of the following categories of features and functions. Of course, practices are different and not every practice needs every feature.
One of the core functions is the accounts receivable function. This may include billing for time or value billing, as well as tracking receivables aging. But just about every practice needs to be able to issue timely invoices and statements for the services they perform, as well as track the status of client payments.
Depending on how your practice is set up and the types of clients and services you provide to those clients, you might need something besides a simple “send the bill and receive the check” system. Retainers, progress billings, and the ability to charge interest on late payments are all features to consider, as is the ease and ability to collect and forward applicable sales taxes. So is the capability of billing expenses separately from services. These are all common features, but don’t just assume that a particular application system offers them. The time to find out if a needed or wanted feature is missing is before you commit to a particular vendor’s application.
Also of prime importance in a practice management system is customer relationship management. How and when you communicate with your client is going to have a great influence on how your client views you. Keeping clients up to date on the status of the work you are performing for them is a paramount requirement in managing your firm. Due date management and scheduling are a must, as is the capability of setting alerts for following up on inquiries and answering client questions and queries. Every client wants and needs to feel that they are your most important one, and your practice management system needs to be able to reinforce this perception. If a client is expecting a return or document, they should have it when expected. The same holds true of a return phone call or text.
An important adjunct to CRM is workflow management. A valuable capability in a practice management system should let you track a client assignment from engagement, to acquisition of data, monitoring the work-in-progress, getting the required authorizations and sign-offs, and following up with the client. This is a subset of project management, though it may or may not have such features as Gantt charts or work timeline charts.
Productivity tracking is another feature you may want in your practice. Whether or not staff time is captured as part of the revenue recognition process, it’s valuable data to be able to compute realization rates that provide an indication of how productively your staff time is being utilized. Another useful feature is CPE tracking for your staff to ensure that they get the required hours of CPE credit on time and filed with the appropriate agency.
Other features you may want to focus on include integration with other applications, dashboards and key performance indicators, as well as extended standard reports and/or an easy-to-use report writer.
Ted Needleman has been covering technology for more than 30 years, writing frequently on software, hardware, and related subjects. He was previously editor-in-chief of