SageOne launched fairly quietly in Australia last year, whilst functionality and infrastructure for our mature cloud accounting software market in Australia was completed. Now with just multi currency still in the final stages of pre-general release, 2016 is the year when Sage will ramp up the profile of SageOne and more aggressively seek customer acquisitions.
Currently around 30% of accounting practices in Australia use Sage Handisoft for their tax and compliance work so the potential to leverage SageOne from this base is huge, prompting Sage to set some fairly aggressive targets for customer acquisition of 15,000 customers by the end of this year which will probably put them ahead of Saasu and by the end of next year possibly even catch up with QBO. These targets could become reality if the Handisoft accountants see enough benefit in promoting this cloud accounting product to their clients but otherwise, the highly competitive Australian marketplace will be difficult to crack.
Both Xero and Intuit have already gone down the path of attracting accountants as partners and Xero announced at its February road shows, the rollout of Xero HQ, a highly proactive accountants’ tool which along with Xero Tax would be a competitor to Handisoft. There are some major differences between the two; firstly Handisoft requires the product to be loaded on the desktop, whereas all Xero accountant products are 100% cloud and secondly being a desktop product, features such as sending messages to/from clients and alerts must be done through the Accountant’s version of SageOne not Handisoft reducing the flexibility of the feature.
Apart from leveraging the Handisoft base, Sage is looking to build product awareness and customer numbers by:
- Developing partnerships with bookkeeper organisations including AAT, Institute of Chartered Bookkeepers and Australian Bookkeepers Network.
- Running Bookkeepers Boot camps.
- Providing free training and certification for accountants and bookkeepers.
This should greatly increase the exposure of the product amongst accounting professionals and ensure that there is a base of trained bookkeepers to support accountants.
Ecosystem – Sage will not be delivering an extensive ecosystem to its platform unlike Xero and QBO, preferring to build the functionality into the base product. There will be a few exceptions for specialised applications including integration to:
- GovReports – in the final stages of testing, this will enable direct lodgement of the BASs but it will only support reporting on GST and W1/W2 fields not any additional taxes or refunds such as WET, Fuel Tax Credits etc.
- Shoeboxed – still in testing with release date not yet announced enables extraction of accounting data from scanned receipts, invoices and documents securely online
- eWay – again in the final stages of testing but no release date yet, allowing Sage One customers to accept secure credit card payments online 24/7 from customers around the world via an online customer.
- OneSaas Due to launch in March 2016, this platform will connect Sage One to a range of other applications including Shopify, Bigcommerce, MailChimp, Salesforce, Harvest and more.
- Receipt bank.
- Direct Bank feeds will probably be out either before or at the same time as this post to supplement existing Yodlee feeds.
Right now there is built in integration to Sky Payroll which comes free of charge; however Sage is using their in house expertise from MicroPay to develop its own payroll module which is expected to be released by the end of this year.
Overall SageOne covers all the major business requirements and is fairly similar to both QBO and Xero although an in-depth review would likely throw up a number of differences that could drive choice. Because the product is still relatively new, I have included some observations on some of the differences – good and bad:
- My Workspace: an area tailored specifically for each user, it can group together icons for all functions used – a delightful experience that is not in competing products
- There is a free app to customise invoices which does look a lot more friendly than the options in QBO and Xero although QBO is just coming out with a new forms designer.
- There is also a fully customisable dashboard which is more similar to the experience of Reckon One than Xero or QBO.
- Favourites – on top of My Workspace, you can nominate functions as Favourites for fast access although not all reports can be favourited.
- Analysis codes – this feature is similar to Class and Location in QBO and Tracking Categories in Xero but usage is effectively curtailed because the field cannot be made mandatory and no reports are available to show where an analysis code has not been used. QBO probably provides the best solution here because you can set whether a class is mandatory or optional. Xero has not been able to deliver this level of functionality but has reports to identify transactions that do not have a tracking category followed by the Find and Recode function to quickly correct. None of this is available in Sage One so a customer needing job costing is likely to experience some challenges here.
- Fixed Assets – currently it is not possible to run depreciation, this can only be done via a manual journal or the accountant can run it in Handisoft and then import the journal to Sage One.
- Time tracking – this feature is very basic and there is no concept of billable expenses that we have in both Xero and QBO. Additional functionality will be available through Harvest and WHMCS via OneSaas.
- It is easy to import customers and suppliers along with their opening balances when starting a new company, however it is not possible to start with a blank chart of accounts and import a standard list. You can import your list, but then you have to delete all the ones Sage One has set up can be annoying
- Reports – can’t run reports such as P&L or Balance Sheet on a cash basis.
- ABA files for supplier payments are not available – lack of this functionality was a stumbling block initially for QBO as it is a common requirement for small businesses – again a limitation on the product.
- Although additional job costing functionality will be available with Harvest there are still limitations for customers in the Building & Construction Industry as SageOne does not provide the Taxable Payments Annual report.
Pricing There is a Cashbook version at $5 month which includes Bank Feeds and BAS but no Inventory or Payroll – this looks like beating even Reckon One on price for a basic platform although similar to Xero this is only available via an accountant. The standard package is $15 a month for 2 users with additional users priced at $3 per month each which compares favourably with QBO; although it includes just 5 free employees rather than the 10 with QBO.
Support. This is comprehensive with context sensitive help available on every screen and both telephone and email support. There is also a reasonable on line Help Manual and several online videos on the SageOne TV Channel.
In summary – from a functionality perspective there are a lot of good things about SageOne but some functionality holes that need to be addressed to put the product on an equal footing with Xero and QBO. The secret to its success lies with the accountants using Handisoft, but will they be as sympathetic towards a cloud accounting software solution for their customers as accountants using QBO or Xero? 2016 will be an interesting year for SageOne as we wait for missing functionality and review market penetration.