Only last week I published a blog on software supplier Reckon so it is a little soon for a second one, however Friday 8th April was an auspicious day for Reckon – it was the day the long awaited Payroll module was released into its cloud-based accounting software ReckonOne.
Unlike other cloud accounting software suppliers such as Sage and Intuit, Reckon did not enable the integration of a third party payroll product until its own was ready, so the lack of payroll functionality imposed limitations on the suitability of the software to many potential customers. The release of the payroll module has the potential to close that gap.
ReckonOne overall still awaits some key features before it can compare with products such as Xero and QBO. In particular there is no:
- Multi Currency.
- ABA files (MYOB Essentials has this for employee payments).
- Inventory module.
- Fixed Asset module.
- Very few third part apps integrate to the product although the APIs are available – the Add On Marketplace only identified one product – WebNinja Collect.
The product therefore remains more comparable with and has many similarities to MYOB Essentials.
Like MYOB Essentials the ReckonOne Payroll is native to the application. Reckon was able to capitalise on the expertise gained with its Reckon Accounts payroll module to deliver its own Payroll module. Since Australia has arguably one of the most complex payroll regimes in the world, non-Australian software suppliers such as Intuit have wisely opted not to start from scratch and instead provides KeyPay as part of its subscription which integrates to QBO but remains a separate product. Xero bought third part app PayCycle and fully integrated it into its software nearly four years ago and having ironed out the wrinkles, it is now firmly embedded.
The Good, Not so Good and What’s Coming of Payroll
Reckon has advised that this is the 101 release of Payroll and enhancements are planned to be delivered fairly rapidly so the following list of the Good and the Not So Good should be seen in that context. Overall there were no major surprises – it was pretty standard payroll functionality, but Payroll is the one area where many small business owners struggle and need assistance so the more user friendly it is, the less likelihood there is of getting things in a mess.
- Security – there is a high level of granularity embedded into User Roles to maintain control over the data.
- The module is SuperStream compliant if using the Medium level (although this was the one area I had difficulty with in the set up – it was a little cumbersome).
- Direct link to Awards and Classification Levels – not that this currently goes anywhere or does anything.
The Not so Good:
- All the Pay Items had to be set up from scratch – it would have been helpful to have the standard ones preloaded.
- Specification of the general ledger posting accounts is very limited (note MYOB Essentials uses preset defaults without allowing any specification).
- The PAYG Withholding from the payrun is passed to the accounts as an Accounts Payable transactions rather than as a Balance Sheet item – this makes recording a BAS payment more complicated and means the PAYG amount owing is not quickly visible.
- No integration of Payroll values into the BAS reports.
- Recording opening balances of pay and leave for employees was rather cumbersome.
- Some navigation features could be streamlined to improve the User Experience.
- I did encounter a major technical error while processing that has not been resolved by Tech Support, indicating the product may not be as stable as is needed for a payroll application.
And on its way:
- Employee Payment Summaries.
- Increased range of reporting, currently only two available.
- Integration with Projects.
- ABA files to pay employees– this functionality is on the road map but the file will be combined for suppliers and employees.
- Employee Portal.
(The Not so Good list is longer than the Good but that is mainly because so much is standard, it doesn’t need identification.)
Where to for Reckon One?
So is this delivery too late to shift the product up a level? It hasn’t made an impression on the share price. Reckon has definitely missed the boat for the first and even the second wave of businesses migrating to cloud-based accounting software. Additionally early promises on the product failed to materialise in a timely manner resulting in some credibility issues. So there is a lot of ground to be made up.
The marketplace for cloud accounting software is very competitive so a point of difference can definitely assist in market penetration and Reckon has one with price. ReckonOne is definitely the Harvey Norman of all cloud accounting software products as it won’t be beaten on price (unless it’s free). The total subscription payable is dependent on which modules are used in any month and the level selected, but the maximum you could pay per month is $32 – this is with the medium level of every module and full bank feeds. Many customers would not need all modules so would pay less than this. Payroll with SuperStream compliance comes in at $5 per month for an unlimited number of employees. So price conscious start ups and shoebox organisations should find this a positive factor.
Additionally Reckon products have always had a robust Job Costing flavour, as yet the Payroll doesn’t cost payroll hours to Projects, but the hooks are there so once that is in place – this will be a further positive point of difference that could be capitalised on.
And the final reckoning – would I recommend ReckonOne? Yes I probably would, it is now more functionally rich, the user experience is reasonable but I do need that comfort factor that Reckon will be able to deliver the promised enhancements in a timely manner to be 100% convinced.