Embracing Change

The world of accounting software continues to adapt, evolve and innovate – with the move to online-delivered solutions by far the biggest trend. Kevin Kevany reviews the market.

It’s been called the ‘biggest paradigm shift in 20 years’. A ‘game-changer’.
It’s discussed across online platforms and traditional media, incessantly.
If you are not au fait with the technology (as studies show a number of SME owner managers still aren’t) you now face the reality that even that once-immune-from-change part of your business, accounting, is headed for ‘the cloud’ – if it isn’t there already.
Software and accounting solutions providers are backing their words with a flood of new products and tens of millions of dollars in R&D; as well as 24/7 support services and massive banks of cloud servers.
“Ultimately, if there are any buzzwords,” says Catie Cotcher, GM of Reckon NZ (nee Quicken and QuickBooks), “they should be ‘embracing change’. Embracing the advancement and growth of technology in a way that works for your business, by improving efficiencies, mobility and productivity. Working with it, not against it – and getting the right support services to work with you to do that – is what will collectively move us forward,” she says.
“Our lives are more mobile, our outlook global, even for those who believe themselves to be less technologically savvy. If you are still in the working world, it’s virtually impossible not to have been affected by the connected world.
“Technology has given us many things – and, in amongst that, it has given us freedom. We can work remotely, collaborate nationally and globally, have more immediate communication with our customers; we can react at speed,” says Cotcher.
“It is certainly more than just a buzzword. For SMEs – and remember New Zealand is a nation of SMEs, upward of 95 percent – the cloud is now and the future; certainly more than just ‘a trend’. Businesses are already seeing the benefits of being faster, more mobile, more agile, in the market.”
ReckonOne (the company’s cloud offering was launched in Australia earlier this year and will be available locally shortly after you read this) has hit-the-spot with its ability to ‘pick and mix’ the modules you want and need, and skip the ones you don’t, claims Cotcher.
“The idea is you only pay for the modules as and if you need them – which certainly suits SMEs building up their presence or unsure yet which elements of ReckonOne will best suit their business.
“The biggest factor in our business is the relationship we build with our customers. It’s all about the support structure we have in place across New Zealand and Australia, whether they are using a cloud-based product or a desktop product.”
Reckon deals directly with customers and has a channel of accredited partners who recommend Reckon products to their clients.
“It’s all about feedback, integration and fine-tuning/improving the product to suit needs,” Cotcher says.

World famous
Rod Drury, finalist for Entrepreneur of the Year 2013 and founder/CEO of world famous (certainly in the IT world) Xero, is even more absolute about the cloud. “We are just at the end of the beginning of the cloud. The first phase was building the accounting features you would expect in standard desktop software, and the next bit is super-interesting. With business data safely online, you are able to connect to a whole lot of things.
“Banks are now online, so transactions arrive overnight and you can do your bank reconciliation, over coffee, on your mobile phone. You can take action immediately because you have so much more instant information.
“Where it goes from here is far greater connectivity between businesses. Rather than getting an invoice in the mail which you have to key in, it will arrive electronically and maybe directly into accounting software, already keyed for you. So it’s now all about saving as much time as possible for you; restoring some balance in our busy lives.”
According to Drury, banks are now heavily investing into software to allow a more seamless connection to providers like them. Government, too, is recognising the cloud is more than a fad with its $1.5-billion transformation of the IRD – making it easier for the software providers to connect and file tax returns easily, almost without having to think about it; reducing compliance time and freeing you to focus on your business.
Drury’s been working with the Privacy Commission to draw up a cloud code of conduct, and with the IRD to ensure individual’s and firms’ data will continue to be secure; despite the hoohaa around the GCSB legislation.
“You aren’t seeing many companies investing in desktop technology anymore. If they are it is to protect legacy product. Based on the latest Intuit financial results, the vendors are going to the cloud anyway,” says Drury.
“For the first time in 20 years you are seeing significant investment in technology for SMEs, as it becomes more cost-effective to service that sector. That is also in response to the fact that SMEs have traditionally been nervous about investing in integrating software on their own premises. Quite often they lack CRM software to link to their accounting software.
“Xero now has more than 260 software apps – Workflow MAX, Vend, Timely, etcetera, to name a few – to accommodate specific industry or functional needs.
“SMEs can ‘commoditise’ their accounting software and add the combinations of these applications to specifically meet their particular needs. These apps are all pre-integrated in the cloud, making them simple and highly effective to introduce to your business,” Drury says.
Xero, described by many as ‘the next Microsoft’, is 100 percent cloud-based on a ‘disruptive open system’, with 80,000 customers in New Zealand alone. “Australia has gone nuts for us and we trebled our customers there last year.” Now, in the UK, says Drury, they are the biggest online provider in terms of revenue.
Does he see the cloud displacing desktop and other options?
“Absolutely, it is so compelling now. We alone have 500 people producing software and releasing it every month and running a virtual IT department for customers. So it’s hard to think why you would ever again want to run your own software and hardware, particularly if you experience a breakdown. Its three or four days lost, [or in the example of] the Christchurch quake, people were without access for months.

More mobile
MYOB NZ sales manager-business division, Scott Gardiner, outlines the big advantages of the cloud as he sees them.
“Firstly, cloud solutions help make your business more mobile – for both you and your team. The cloud means you can access your files wherever you have access to the Internet. From a team perspective, this not only means smarter collaboration, but also that you are more able to hire or keep high quality staff, who may live or want to live on the other side of the country.
“Next, having your files stored in the cloud can also give you peace-of-mind about the security of your data. By storing important information off-site and in more than one location (i.e. multiple servers) – especially in the hands of a trusted cloud provider – you mitigate the risk of anything untoward happening to your data.
“As well as providing more flexibility and security, cloud solutions can also help you to cut down the amount of money you have to spend on IT systems and infrastructure. This is because many cloud solutions charge on a manageable, on-demand subscription model, which means that instead of paying large up-front costs for expensive software or infrastructure, businesses pay smaller increments on a weekly or monthly basis, and only pay for what they need,” says Gardiner.
“Thirdly, one of the other key benefits is the collaboration it enables. This is particularly useful in supporting the relationship between business operators and their accountants/ bookkeepers. By inviting their financial adviser to have real-time access to their data, they are able to provide deeper insights into the running of the business, while it’s occurring rather than after-the-event, at year-end.
“This not only allows them to identify any errors or inaccuracies as soon as possible, it also gives them the opportunity to play a significant role in building the success of the business. By tracking trends in real time, accountants/bookkeepers can identify many ways to help the business; like cutting costs, changing the product mix, or identifying areas of new investment.
“The benefit of our approach to online accounting is you can choose between online-only (LiveAccounts) or cloud+desktop (AccountRight Live). With the latter type of cloud accounting solution you don’t need an Internet connection to use it – handy if you want to do some work on a long plane trip; you’re in a remote area; or your Internet connection goes down,” he says.
MYOB, an established market player with their MYOB Live suite, launched their cloud accounting solutions (LiveAccounts and AccountRight Live) in 2010 and these now account for nearly half of all their new product registrations.

Grow your business
Greg Sheehan, CEO of RightWay, unashamedly claims his Martinborough-headquartered company “knows Xero better than anybody” – and you suspect he includes everyone at Xero in that too. All their customers use Xero; but they are part of a new breed of experienced IT operatives who have seen a gap in the market – using technology in all its nuances to grow businesses.
“Internally at RightWay, we only work with cloud software across all areas of our business. So helping our customers do the same just makes sense. Yes, in time, the cloud will replace desktop only options.
“We ask prospective clients: ‘Does your accountant look like s/he knows how to grow their own business? And, if not, then what credibility do they have in helping you grow yours?’ Provocative, certainly, but in all honesty it’s that simple. We have deliberately built our team with the DNA to help grow our customers’ businesses. ‘Test and amend’ is our motto.
“Our RightWay Regional Partners’ sole objective is to look after the customer, helping them as a ‘Virtual CFO’ in growing their business.
“In reality, we will generally spend more time with you for similar money to what you spent with the old accountant. Business outcomes are largely up to two things: aspiration and great advice. The first one is up to the owner – how hard do they want to work? The second is ours – it’s all about great decision-making and execution,” Sheehan says.

Stability and flexibility
Kevin Carberry is the ‘face of Accredo’ in that he is channel manager, dealer network: “For most of our customers, we are ‘second-choice’. [That is] they have this feeling they are losing control of their business, because their needs have gone beyond the compliance product they bought to deal with the basics like GST, tax returns, etcetera.”
Originally Christchurch based, but now national and moving in on Australia too, Accredo uses a large, stable, specialist dealership network – “even Gisborne has two [dealers], so you have a choice”. The network of around 80 dealers has been in place for 17 years; more than two-thirds of whom have stayed on board.
“We cover the complete cross-section of business in New Zealand. We even have an RDI store which incorporates a women’s lingerie boutique. There’s a biological pest control supplier, a bodyguard operation and the National Bank of Vanuatu to give you the other end of companies we service,” says Carberry.
“Our clients like the fact we take care of the little things. Our flexibility and ability to customise Accredo has even seen a medical testing system derived from our accounting software. We will polish and polish until you’ve got exactly what you require.
“That said, I believe we have one of the few products which will not allow you to do a single data side entry.”
Accredo pitches their Mercury (single location) and Saturn (operating from more than one location, branch or department) products as “purpose-designed for New Zealand SMEs”. A single monthly payment covers software provision and fully-managed hosting.
You have the flexibility to increase (or decrease) processing power depending upon your needs. You can access Accredo via a terminal server wherever there is an Internet connection.
In addition, their software has a scripting layer built in so you don’t lose the ability to tailor the application to better suit your business – said to be a common problem encountered with browser-based accounting software.

Simplicity and support
If you are a straight-forward SME, don’t understand too much about accounting and are not interested in over-complicating anything, but still want support and regular software updates, “without paying too much”, Accomplish’s Grant Hewson is your man.
Accomplish has been supporting Kiwi businesses for more than 20 years. They enjoy 90 percent plus renewal rate to their $300-a-year non-compulsory support/service fee, and a Net Promoter Score (NPS) of 65 percent on customer satisfaction (a world class NPS sits at 70-75 percent for the likes of Apple and Google). Hewson is justifiably pleased, since the majority of companies sit in the zero to 30 percent bracket.
Added to that, fewer than five percent of that significant customer base elect to take Accomplish’s CashManager Plus, their top offering – the only one to provide double-entry accounting – or as Hewson describes it: “the one that accountants can handle”.
“Mostly we help ‘stressed SME owner/managers’ to manage their books, cashflow and GST by offering a simple, stable package, backed by our legendary support staff, for whom nothing is too much trouble,” he says.
“We have no KPIs to cut short the calls, as most organisations today unfortunately have, so many of those calls continue way past nine pm, until the customer is happy. People appreciate that sort of commitment.”
Hewson says that the sheer simplicity of the Accomplish software, the support, the online (“if you really need it”) option, and the ability lease or purchase outright are the secrets of their success.
“If anything we will probably talk you down from what you’ve either been told you need or think you do. So much of what is out there in the market, and for which you pay, you’ll never use. It’s like Windows, your flash new camera or Excel, you just never get round to using all its capabilities, because many of us aren’t prepared to invest that much time in that sort of stuff.
“You can move from our entry-level ‘Lite’ to ‘Standard’ and onto ‘Plus’ simply by paying for a new registration and coding on your software. So no big shocks, training bills or hiccups. Simple and stressless.”
Accomplish’s new CashManager 2013 allows both online and PC-based customers to take feeds from the banks into their systems, and they have made this available to the PC-based customers without any requirement to use any part of Accomplish’s online service.  
“Certainly in five, ten, 20 years, I’m sure everything will be cloud or whatever its successor is then based on; but for many, many Kiwi businesses, it’s all a bit too soon,” Hewson says.

Cloud and PC offering
Takapuna-based Cognito Software recently released MoneyWorks Datacentre 7, again targeted at SMEs, which it reckons offers the best of both worlds: “astonishingly fast Internet access with the richness and power of the traditional desktop”.
MoneyWorks was first released in 1992 and is used by about 40,000 users in more than 100 countries. More than two years in the making, one of the key areas of focus in the new release was that of access from anywhere.
“The cloud is a mechanism for offering ubiquitous access to your business systems,” says Dr Grant Cowie, CEO of Cognito Systems. He believes web-based services can be sluggish and lack the speed and richness of the traditional desktop user interface.
“When basic operations like entering an invoice are slow, there is a significant real, if hidden, cost in staff time. At the same time, desktop technology is not appropriate for mobile devices such as iPads.
“User interaction is different on these devices, as are the functions people will perform. That’s why we offer separate, free apps, connecting directly to MoneyWorks Datacentre – available to purchase, so businesses can host their own private cloud; or as a hosted service.  
“We have specific apps to record time and materials; take an order; or pull up a report, but not for something like doing a bank reconciliation, which is more a desktop-type activity done at the office.”
They also provide APIs to make it easy to build custom apps which interact directly with MoneyWorks, eliminating the needing for synching data.
“Although systems like ours are traditionally referred to as ‘accounting systems’, they now do much more, having evolved into business management systems. They tend to drive much of the internal workflow of organisations, and the accounting ‘just falls out the bottom’.
“This is a point that traditional accountants often overlook. They focus on their own accounting needs, and not on the operational requirements of the business. Many businesses are left with these badly-fitting systems, often with duplicated components and data re-entry.”
He warns most cloud offerings lock your data up. Even if you stop using the service, there are legal requirements to retain a copy of your financials for seven years. If you can’t get a local copy you are stuck with paying for a service that you no longer use.

Kevin Kevany is an Auckland-based freelance writer.
Email [email protected]

Websites to visit:
www.accomplish.co.nz
www.accredo.co.nz
www.cognito.co.nz
www.myob.co.nz
www.reckon.co.nz
www.rightway.co.nz
www.xero.com

Case Study
NZ Leisure moves from Excel to MYOB
After 25 years of using Microsoft Excel spreadsheets, and previously Lotus 123, NZ Leisure recently made the successful move over to MYOB LiveAccounts.
The Wellington-based hospitality company owns several bars and is in the process of moving all its businesses to the accounting software. General manager Bharat Dayal says he evaluated other MYOB products including AccountRight Live, as well as other accounting software providers. Ultimately LiveAccounts fulfilled their requirements.
“MYOB allowed me to auto-allocate the business’ cash deposits, whereas other software didn’t. As soon as I realised this I made my decision,” he says.
Bharat says simplicity was the biggest factor for him when he was choosing the right software for his company. “I find the package extremely easy to use and flexible. I was able to pick it up really quickly and it keeps all my accounts nice and simple. It’s very intuitive,” says Dayal.
“The most useful tools are the bank feeds and auto-allocation features. It basically does all our accounts for us – we wake up and the bank feeds have done their thing.”
Although NZ Leisure has an in-house accountant, the company also pulled in Aspire Solutions, an Approved MYOB partner, on a consultancy basis for advice and assistance on transferring over from the old system.
“I sat down with Aspire for an hour and a half and we went over the key features. The meeting was also quite instrumental in my decision to use MYOB. I tried a few other products, but for my specific purposes this was the best fit,” says Bharat.
“I’ve already recommended MYOB to other business owners and managers, and an associated company is actually in the process of moving all their accounts over, as we speak,” he says.

What the cloud already delivers
• Stores unlimited data, i.e. minimal infrastructure needed.
• Constantly updated software for most up-to-date capability.
• The highest level of security to ensure your data – and that of clients – is safe; backed up; protected from data corruption or loss. (Few SMEs would have that level of safety/security/infrastructure.).
• Cross-reference data across business, eliminating re-keying of information.
• Daily reports to stay up-to-date on business performance and adapt immediately.
• Access anywhere, anytime from any device. The ultimate in flexibility – ‘gold’ for any SME.    Adapted from Reckon NZ.

Point of Sale: One size doesn’t fit all
“POS isn’t just about receiving money anymore,” says Catie Cotcher, GM, Reckon NZ. “Businesses are looking for software which provides up-to-the-minute intelligence.
“Gone are the days of just a simple cash register. You need intelligent software which not only receives funds but also provides detailed, up-to-the-minute sales history and updated buying trends, as soon as each happy customer bids farewell or quits the online site.
“Particularly if you are dealing with multiple client businesses across a range of industries, you will need accounting software, easily-tailored to meet individual requirements. The needs of each business will vary and there is no ‘one-size-fits-all’.
“The first step is a thorough business needs analysis; this is critical. What are the unique needs of the individual business or businesses? What are their challenges? Where and how are they interacting with their customers?
“Most integrated POS systems incorporate inventory, purchasing, and accounts receivables too. Each of these needs to link seamlessly so information can be shared and updated straight away. When an invoice is created, the software needs to be able to instantly update inventory, customer history and accounts receivable, and link directly through to ensure sales history is updated. Everything is automatically kept up to date.”
Cotcher says different industries provide different business and monitoring challenges:
Financial services industry: security of important data – business is based on being able to assure clients of this. Information must be up to date immediately and easy to access.
Manufacturing sector: productivity – streamlining processes and fine-tuning workflow – is a key driver of success. Applications need to be increasingly mobile and accessible from multiple locations. Centralised reporting is critical, along with immediate and accurate inventory reporting.
Healthcare sector: ultimate confidentiality and security of personal client data – the focus needs to be on thorough CRM across multiple disciplines and applications which allow increased mobility in the marketplace.
Retail and distribution: managing customer service – (with both online and bricks-and-mortar retail available 24/7), customer service and a finely tuned POS process which makes purchasing simple and fuss-free, as well as providing comprehensive reporting straight back to the all-important books.
Public sector: it is all about accountability – requiring fast and affordable software, which is transparent and cost-effective.
Professional services: security of client data is paramount – these organisations often have large, structured client databases requiring comprehensive reporting to meet the needs of their varied and often demanding client-base.