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Beyond the Basics in Cloud Accounting Software

With a world of apps and the opportunity to custom build a cloud accounting ecosystem, it may appear that the life of entry-level accounting software such as Xero or QuickBooks Online can be extended almost infinitely. A planned ecosystem using third party apps can enable the business to:

  • Access and integrate additional and advanced functionality.
  • Achieve a best of breed solution with the careful selection of apps.
  • Exponentially extend any restrictions on transaction volumes (especially Xero) as many transactions will be stored in the app.

However using third party apps may not be a universal panacea for organisations that are at the upper end of ‘small and medium businesses’, those with a more complex business model or a more complex business structure. When the boundaries are being reached, a conundrum is also reached – where to go? There is not the same level of choice, the price increase may be large and the complexity of the software requires specialised assistance in implementation and maintenance.

For some time now, Netsuite with the scaled version – JCurve has provided an option for businesses moving beyond entry-level business software, but more recently we have seen the emergence of Microsoft Financials for Office 365 (Fo365);   powered by Microsoft Dynamics and a cloud version of tried and tested Navision means it is both a mature and comprehensive Enterprise Resource Planning (ERP) product.

I had the opportunity to test drive the product over the Christmas break to see how it fits into the landscape and assess whether it could be a viable option for businesses who may be encountering roadblocks with a Xero/QuickBooks Online ecosystem.

The F0365 website states that the product is designed for small business; is built for growth and that their mission is to make every small business as efficient as their large competitors using smart technology and insight – sounds promising.

Functionality

The product has all the major modules expected from an ERP system including:

  • Financials.
  • Fixed Assets.
  • Job Costing.
  • Manufacturing.
  • Inventory.
  • Service Management.
  • Sales & Purchasing.
  • Warehousing.

Much of the functionality met my expectations for ERP system,  but for many small businesses, it is their manufacturing and advanced inventory requirements that cause the most stress in an entry-level environment. The following features required by so many businesses are thankfully are all present in Fo365 (no specific order):

  • Multi level bills of material.
  • Support for multiple costing methodologies including FIFO, LIFO, Average, Standard at the item level.
  • Serial and lot number tracking.
  • Make to Stock and Make to Order production methodologies.
  • Multi-Warehousing.
  • Inventory Available to Promise.
  • Landed Cost.

This is not an exhaustive list of what is available in these modules, it barely scratches the surface and the level of detailed information that you can store against an Item is so comprehensive (includes Planning, Warehousing, Replenishment) that there can’t be anything not covered!

Missing

Despite the extensive functionality  there are some key omissions:

  • At this time there is no Payroll module, although a solution is scheduled for delivery by June this year
  • No Bank Feeds
  • No Payment Gateway/PayPal Integration
  • Not SBR enabled
  • No E-Commerce or POS modules (both available in Netsuite)

We have come to expect all of these features (with the possible exception of SBR enablement)  in the likes of Xero and QuickBooks Online and their omission in this product could come as a disappointment to potential users. (You get Landed Cost but lose Bank Feeds!)

Apps and Integration

Because Fo365 is a fully fledged ERP system, there isn’t generally a requirement to expand functionality with apps, however a couple of additional tools are provided free of charge:

  • Jet Express– links to financial data base to expand reporting (including multiple companies).
  • Power BI – model and design dashboards to illustrate business performance.

If a more powerful CRM is needed, Fo365 will integrate to Microsoft Dynamics CRM and there is also an integration to Sharepoint.

Mobile

And yes, Fo365 is fully mobile enabled including Windows phone and tablet which often miss out on mobile enablement

Implementation

This  is not a product that a business can implement on its own (although the implementation of a fairly simple system such as Xero benefits from accounting professional input in the set up and maintenance) There are Fixed Scope Implementation packages to ensure fixed implementation costs and the  implementation methodology allows for configuration, training and user acceptance testing.

The Standard and Premium editions have a fixed price implementation fee – $2990 for standard and $9990 for Premium. There is no charge for implementation of the Lite edition mainly because that is largely delivered pre-configured with master data populated.

System Benefits:

  • Fully scaleable for business growth
  • Being a full blown multi currency, multi company ERP system, additional apps are generally not required meaning there is a single user interface across the product
  • Data is hosted by Microsoft Azure and is stored in Australia (same for Xero and Reckon)
  • Completely Microsoft compliant, with the familiar icons and short cuts making the user interface that one step easier

The Downside

  • Complicated to implement and requires much more time to learn
  • Reports were not very user friendly to run, and cannot be viewed on the screen until exported to PDF, Word or Excel

Support

This is mostly available via the Implementation Partner, although email support is also available.

Pricing and Editions

Three editions of Fo365 are available with pricing per user per month plus a free login for one external accountant. There is no additional charge for multi companies. From a price perspective this cannot be compared directly with the entry level accounting software as they all charge per company file not by user.

  • Lite, allows up to 3 users, charged at $29 per user per month. This edition has only very basic functionality including basic inventory and really has no functionality that you would not find in Xero or QuickBooks Online. There is $0 setup cost for this edition
  • Standard – allows up to 15 users, charged at $99 per user per month – this edition includes advanced inventory but basic warehousing , job costing, multi currency, service management, manufacturing and Fixed Assets
  • Premium – allows up to 150 users, charged at $159 per user per month. This includes Advanced Warehousing.It is provided on a single tenanted platform  (the Lite and Standard editions are multi tenanted). Premium can also be run in a desktop environment, the Lite and Standard editions are only available via a browser or mobile.

Both the Standard & premium editions allow for a Reports Only user at $49 per user per month

Overall Evaluation

Fo365 is a comprehensive ERP solution with full Microsoft compatibility. There are currently a number of functionality omissions as noted above which could make it less than attractive to a business migrating from a Xero/QuickBooks Online environment. It does represent a big leap in complexity that would need to be managed effectively. Would I recommend the product?   I would definitely consider recommending the product but it would be very much dependent on the organisation:  its requirements, its ability to cope with change and manage a more complex business system. For the average small business, I would really be looking to extend the Xero/QuickBooks Online ecosystem. Disappointingly I will have to keep searching for the ideal next step up system.

 

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