Seems like everywhere we go, the next big question from accounting firms revolves around online workpapers. For many firms around Australia, it is the next logical step once they have embraced the flexibility and freedom of using cloud accounting tools such as Xero and WorkFlow Max.
The two names on everyone’s lips are Fifo Workpapers and Spotlight Workpapers. While this says much about the pair’s impressive marketing abilities (as neither product has as many customers as the most popular provider, Business Fitness), it is a reflection of where the firms of the future are looking for their solutions.
We are fortunate to have been involved in the beta-testing program for both Spotlight and Fifo. We have extensively tested them in our accounting firm and more broadly as an advisory service to the industry. What follows are our experiences and thoughts to give you a guide as to which one may better suit you and your team when you are ready to make the move.
Whichever you choose, you will be on the path to greater efficiency and profitability. At a minimum you can expect time savings on your current compliance budgets of at least 20 percent when compared to using Excel Spreadsheets or manual working papers. That is a win for all firms and a point that every accounting firm in Australia should be looking at closely.
A key feature of both products is the elegant way in which they make dealing with client queries and interactions as well as review points very, very easy. It’s hard to imagine going back to a paper file or manual workpapers once you have seen just how simple both products make generating, dealing with and managing contact points with staff and clients.
When we dig a bit deeper into each product, we can see some differences starting to appear.
The overall impression is that it is very sleek, very modern looking. If you are a small, 100 percent Xero firm where the person preparing the workpapers is also the reviewer, then look no further than Spotlight Workpapers. There are no extra features and a minimalist workpaper stack means you can get the work done very quickly and take advantage of the tight integration with Xero.
Spotlight only works with Xero ledgers and now that it has been acquired by Xero, the integration between the two products is very, very good and will continue to be enhanced as Xero brings its Practice Studio together.
There is also integration with Xero’s Workflow Max Practice Manager. However, the integration is only around clients and does not contain some of the deeper integration seen in the Fifo-Workflow Max partnership.
One downside is you need to have both Xero and Spotlight open at the same time if you need to dig deeper into workpapers and transactions. This is fine for preparers of workpapers but anyone wanting to review the work done will find this somewhat frustrating as they have to jump between the two programs. There is also no ability to review offline either.
For Silver and Gold Xero partners, you will be able to access Spotlight Workpapers for free (a closed beta test is still underway in Australia). No pricing is available for firms who are not yet at Silver status.
On first glance, the Fifo workpaper approach will look and feel very comfortable to most accounting firms. Designed around the balance sheet, the entire workpaper stack is comprehensive and has all the workpapers and reconciliations you would expect.
This approach in terms of layout and content is probably the biggest difference between the two products. While we were certainly more comfortable with the Fifo approach, it may be too much for some firms who are looking for even greater efficiencies.
Fifo has a cool feature that allows you to create a fully bookmarked client working paper file (cross-referenced as well) with client source documents contained within 30 seconds. From our experience with accounting practices, this feature alone will save most firms an hour or two on every job!
FIFO has a direct feed from Xero (although as you would expect, it isn’t as smooth as Spotlight’s) but you can also import trial balances from all other accounting packages such as MYOB and QuickBooks Online.
One final point; Fifo has really thought through their integration with Workflow Max. Firms which have chosen WorkflowMax as their practice management solution can share client details, jobs, statuses and completed workpapers automatically.
We found reviewing workpapers much easier and quicker in Fifo than Spotlight throughout our testing across all forms of clients.
There are no discounts or free offers with Fifo Workpapers other than the 14-day trial. Expect to pay around $20 per client per year.
Ignore the price difference for the moment. If you are moving from manual or Excel-based working papers, you will gain so much from introducing either Spotlight or Fifo that the difference between free or $20 per year per client is irrelevant.
There are such marked differences in the philosophy and style of each product that you really need to examine your current habits and working paper preferences.
Ultimately, it comes down to what you feel most comfortable with. You can feel safe in the knowledge that whichever way you go, inefficient and time-wasting systems for workpapers will be a thing of the past.
So get in touch with your Xero account manager and get added to the Spotlight trial program or go to the Fifo website and take the free 14-day trial.
Tim Callcott is a chartered accountant and business improvement specialist with Focus Growth Strategies, a practice that specialises in improving accounting firms.