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Beware the risks of bundling, warns Reckon

Reckon has warned of potential risks when bundling the cost of software into accounting fees.

News Mitchell Turner 06 October 2015
— 1 minute read

Speaking to AccountantsDaily at the annual Reckon Conference in Sydney, Sam Allert, managing director at Reckon said that bundling the cost of cloud accounting software into fees is “risky for an accounting practice”.

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If software providers increase the costs of their products, major difficulties could arise when attempting to raise the cost of service offerings within a firm, Mr Allert explained.

“If my software costs are going up, I might have no choice but to increase [fees].

“What if I’ve just done my own annual increase, and then all of a sudden the software price goes up?” he noted.

Mr Allert added that maintaining a commission and partner model would be ideal when offering accounting software to prospective clients.

“Take commission on the software. Don’t bundle it,” he warned.

“If you use that product, I’m linked to you as the partner. Great news is, as the partner I get commission on that. So that’s a win.”

Clients may be tempted to seek a firm who offers software separate to accounting services, as they may be attracted to a seemingly cheaper service fee, according to Mr Allert.

These clients may perceive that their “accounting fee is a half of what I was paying someone else,” he added.

Mr Allert also alluded to potential ownership issues if the arrangement for software fees was not made inherently clear.

“What if the client leaves, who owns the software?” he concluded.

Beware the risks of bundling, warns Reckon
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