Once my birthday is over (4th December) its full speed ahead for Christmas and the New Year so time to review what has happened with cloud accounting software in the past 12 months and what we may expect in 2014.
2013 has been a full on year for cloud accounting software. We have seen Xero consolidate its position ahead of other cloud products. The company has delivered some quality functionality this year: a really robust purchase order module which augers well for Inventory and Sales Quotes scheduled for 2014, the ability to attach documents to records via Files and direct lodgement of TFN declarations with the ATO to mention a few of the more significant deliverables. Xero has really played to the market this year, partly of necessity as it is a public company and partly to reinforce its profile, build a community and brand awareness. Roadshows and conferences figure prominently on the agenda, consistently attracting large numbers that Reckon and Intuit can only dream of. However there are solid building blocks behind this, the company is propelled by its visionary approach; banking 2.0 is on the drawing board and Xero is looking at other ways to push rather than pull data to government, banks and other businesses to reduce the administrative burden, clearly positioning it as software of the future.
But in the coming year Xero will have more of a fight on its hands to maintain its lead in Australia. Intuit has mounted a rearguard action this year with its QuickBooks Online (QBO) software. Already a mature product when it was exported from the US to Australia, it had some key functionality that was lacking in Xero namely sales orders/quotes and inventory which may have positively impacted the decision making process in some businesses. Although tIntuit has gained traction here this year, building a physical presence with its local offices and staff, it still has a long way to go to catch up with high profile Xero in terms of brand awareness and adoption rates.
Marketing of QBO has been helped considerably with the release of the Harmony user interface in August which didn’t change functionality but delivered improved workflows and an infinitely improved user interface. Upgrading of the BAS module and the full integration of the KeyPay payroll solution has also enhanced its suitability, but although there are well in excess of 500,000 customers globally, the number in Australia is not known but is a small percentage of the global total. 2014 is likely to see more aggressive marketing techniques by Intuit to deliver it a viable share of the Australian market rather than new functionality in the product.
Possibly the biggest disappointment in 2013 was the failure of Reckon One to make it to market. It was announced in May 2013 with much fanfare but since then it has been plagued with technical and design issues and has wallowed in the doldrums. Despite a strong commitment to a 2013 release, Reckon has finally had to admit that we will have to wait until 2014 (a big disappointment for me as I have a client with 57 branches each needing their own company file that I was hoping to put on the product). Additionally based on questions at recent product webinars, the initial release will be somewhat light on in terms of both flexibility and functionality. A much longer wait is on the cards for a more functionality-rich product.
Reckon Accounts Hosted, although not a true cloud product, will come with a new platform that will enable it to run on any internet browser. Currently it will run only on Internet Explorer and even then the Hosted website is not optimised for the new features of IE 10 or 11 so it must be run in compatibility mode, so to be able to use any browser will be a welcome relief. Reckon is also promising a release of its API for the Hosted version in 2014 which is progress indeed – 5 or 6 years of waiting have sorely tested the patience of users.
Saasu hasn’t made any major waves this year and remains one of my least favoured products despite being functionality rich, cost competitive and coming top in the review conducted by the Institute of Certified Bookkeepers earlier this year. The company has released some new functionality in 2013, but again similar to QBO, it already had much of the functionality that Xero lacked so its releases have not been so spectacular. Like Xero, Saasu has expanded its use of Files so users can now attach documents to journal entries, as well as sales and purchases and can store documents, photos receipts and other collateral related to the entry. More recently this functionality has been expanded to cover employees – pretty neat as you can attach an employee’s resume or performance review to the employee record – I like that one. It has also revitalised its look and feel but for me the user experience remains the sticking point, however for the nearly 300,000 business in Australia that use the product, it is obviously doing something right. Next year Saasu may look to raise capital to expand into areas such as Practice Management.
Another new comer to the world of small business cloud accounting software in 2013 is Netsuite – similar to QBO, it is not a new product so isn’t starting from scratch as Reckon One is doing. Based on an enterprise business management program used by multi-nationals, a simplified version for small businesses in Australia has been released through its partner JCurve. The beauty of this solution is the inbuilt scaleability as a business can seamlessly transition to the full blown Netsuite product if it outgrows the JCurve solution. I have just signed up for the trial version so will be road testing it in the New Year.
MYOB has consolidated its AccountRight Live cloud-syncing program during 2013. Plagued by continuing cries of distress over response times, it delivered an update in November that increased the speed of its payroll function, the application that was the slowest. But even back in October it was confident enough in the product to announce the release of a tool to convert disenchanted Xero users across to MYOB. Unlike Reckon Accounts Hosted, MYOB quickly released its open APIs to enable other cloud or desktop applications to integrate with the product and now has around 40 apps. Whilst it doesn’t have such a huge ecosystem as Xero, it definitely provides that additional flexibility required by many businesses. MYOB was much slower off the starting blocks than Reckon to offer a cloud version of its desktop product but by the end of 2013 it is looking as though it may have overtaken Reckon.
2013 was the year when mobile really came of age from an accounting software perspective. All cloud accounting software vendors are now totally committed to delivering an effective mobile solution – whether it is a specific app or the full product optimised for a mobile device. Xero designs all functionality with consideration for mobile, QBO is available on all mobile devices and Reckon is promising great things for mobile when Reckon One is released. Now we no longer have to waste time reading or chatting on public transport, we can do our bank reconciliations, send invoices to clients and raise purchase orders instead.
So what can we expect in 2014? Probably a bit more of the same – new products coming to market and a jockeying for position between current incumbents but overall we are seeing a real commitment to customer focused solutions. New entrants to the market have clearly demonstrated that focusing on the customer yields results and the trend is now entrenched which good news for businesses looking to maximise their software tools.
And for sure life in the software cloud will be full of interest, change and also surprises in 2014.