How well do your clients react when you say, I’m going to have to file your taxes late this year because our computers went down?
I know, it has never happened at your firm…yet.
But you and I both know that your high dependence on technology makes you vulnerable to the costly impact of unplanned downtime.
It’s one thing to have your computers down in the evening for routine maintenance. It’s a completely different story if they crash in the middle of a workday.
That’s where IT Services for Accounting Firms comes into the picture. A Managed IT Services agreement with a firm like Alavanca ensures near-zero unplanned downtime, so you can get your work done and hit your tax-time deadlines.
But more on that later…
In 2019, ITIC ran a headline from a downtime survey that read:
86% of Firms Say One Hour of Downtime Costs $300,000+; 34% of Companies Say One Hour of Downtime Tops $1Million
The trouble is that you likely won’t ask yourself how much downtime is going to cost you until your standing in your office, desperately calling around to IT support firms to get some quick help…if they’re available.
You need a clear path for downtime prevention and recovery BEFORE you run into the problem, right?
Because it’s not just about money, is it?
- It’s about your firm’s reputation.
- It’s about meeting your clients’ expectations.
- It’s about ensuring long-term viability.
According to recent studies, 35% of businesses nationwide underestimate the cost of downtime.
But not you.
You run a business that’s all about the numbers, so let’s dive right into the topic at hand.
What Causes Downtime in an Accounting Firm?
Downtime in the small to mid-size firm can be caused by anything from a stray lightning bolt to some genius accidentally dumping his coffee into the company server…oops!
Here are the most common causes of downtime in an accounting firm.
- Human error
- Electrical surges
- Hardware/software malfunction
- Localized floods (burst pipe)
- Storm damage
- Vandalism (break-ins)
Did you hear about the 2018 Consumer Electronics Show? Heavy rainfall left thousands of techies in the dark for over two hours! If it can happen to them… Well, you know the rest.
What’s the Cost of Downtime without IT Services for Accounting Firms?
Here’s a high-level approach to calculating what downtime costs would be at your business.
- Determine how many employees are impacted by the outage.
- Calculate the average hourly salary of impacted employees. An estimate is fine.
- Decide the employee productivity impact percentage – in other words, the extent to which work will be compromised. Again, estimates are fine. For example, a network outage might result in a 90% productivity impact since email, file access, and phones could be unavailable.
- Calculate the Cost of Downtime = Number of impacted employees x Average hourly rate x Productivity impact percent. Example: 100 employees x $50 per hour x 60% = $3,000 downtime cost
How to Calculate the Cost of Lost Sales /Orders
Determine average daily sales for the month based on history. For longer sales cycles, use the same calculation.
- Calculate total business hours per day.
- Figure total downtime hours possible.
- Calculate Cost of Lost Sales = Average Daily Sales / Total Daily Hours x total downtime hours Example: $25,000 per day / 8 hours = $3,125 sales/hour x 14 downtime hrs = $43,750 lost sales
So far so good, right?
Here’s where it’s really going to hurt…
What is the number going to look like if one of your biggest clients walks because you can’t get their work done?
Aberdeen tells us that downtime is up 60% across the board since 2014, and when all the factors are taken into consideration, downtime is costing companies an average of $260,000 per hour of downtime.
Why Accounting Firms are in a Special Downtime Category
Can you imagine a busy boat repair shop being unable to fix boats during the peak of the summer tourist season? What about a ski-lodge that can’t make snow for the runs in a winter where Mother Nature isn’t sending any of the white stuff?
Your accounting firm faces the same challenge as these and other seasonal industries. You have monthly, quarterly, and tax-time deadlines, and nothing can get in the way of getting your work done.
We’ve spoken in general about downtime in other industries, but have you considered what an hour of lost work costs you at tax time?
IT Services for Accounting is a subscription-based IT support model that provides proactive, comprehensive business technology management, maintenance, monitoring, and security within a stable monthly payment. Everything is included, including your peace of mind.
Risk that you may have been able to assume when your firm was a small startup, you no longer want. That’s where the Alavanca team comes into play.
We get ahead of any potential issues by securing, optimizing, and continuously monitoring your IT systems for any sign of problem that could cause downtime. IT Services for Accounting Firms from Alavanca is your insurance policy against tax-time downtime panic and cost.
We’re here to serve you. Let us keep your business technology running and your CPAs working!
Ciro Cetrangolo is an IT specialist with over 30+ years in the IT services industry. Ciro has a deep understanding of the software, workflow, and underlying technology of accounting organizations and helps firms like yours achieve the secure, stable, and streamlined IT environments you need to accomplish your work more effectively. See my Amazon Author Profile