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Be Wary of Third-Party Application Promises

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Be Wary of Third-Party Application Promises

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Christina-Reynolds-for-web-2.pngI'm a big proponent of third-party applications. After all, with the right app, you can customize an accounting system like QuickBooks to streamline many of your specific accounting processes and save a considerable amount of money and time on bookkeeping.

As with any major purchase, however, you need to read the fine print. Third-party apps might involve cutting-edge technology, but a bad sales rep can still resort to unscrupulous sales techniques that date back to the days of horse-trading. Beware of the bait-and-switch or an obvious mismatch, where the rep pushes an expensive app that's not right for your needs.

Here are some questionable practices to watch for:

  • Free trials: Get the sales rep to define "free." Is it a completely free trial, meaning with no strings attached? With some trial offers, you have to sign an annual contract, and only the first 10 days are free. Depending on the application, 10 days might not even be enough time to figure out how to use the app, let alone determine whether it suits your needs. A month into the contract, when you determine the app isn't right for you, it's too late — you're on the hook for the full year.

    Never sign a contract without thoroughly vetting it. And don't sign one that automatically kicks in if you fail to opt out after the trial period.
  • Third-party implementation consultant required: Some third-party apps need to be adapted for your needs. This step could require a third-party consultant with specialized training — which, depending on the app's complexity, could be an additional cost upwards of $10,000. So be sure to ask for details about every step and related cost involved in the setup process when pricing a third-party app, and get the details in writing.
  • Actual monthly costs vs. advertised monthly costs: If an advertised monthly cost seems too good to be true, it probably is. It could be the cost per month per user, for instance. So if you have five users, the actual monthly cost would be five times higher. Make sure you understand how the advertised monthly cost is calculated and what it includes. Is it a simple flat fee? Or is it a subscription, with the advertised per-month cost contingent on signing a long-term contract? In some cases, you'll have to ask a lot of questions to ferret out the true monthly cost.
  • Upselling or overselling: Finally, you have to be careful that the rep isn't upselling you or overselling the app. One of my clients wanted a basic third-party app and a sales rep tried to force-fit a sophisticated, super-detailed app that was way beyond what the client needed. It was like selling a riding lawnmower to someone who needed a weed trimmer. We spent many, many hours over several months wrestling with overly complex details for this client — all of which could have been avoided if the right-sized solution had been selected at the start.

Spread the Word
Many third-party apps, like Bill.com, are great products with transparent terms of service. But if someone tries to sell you a third-party app that you're not familiar with, do your due diligence. Review demos and contracts. Call references and consult third-party vendors that you have a good relationship with. Get as much information as you can before making the commitment.

And if you come across a disreputable sales rep or a third-party app that isn't all it claims to be, speak up and let others know. Even in a high-tech world like ours, word of mouth is still our best defense.

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This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.