A dynamic accounting software market wants to change SMEs for good. From apps and add-ons to hybrids and mobile access, NZBusiness reviews some of today’s leading options in accounting solutions.
By Kevin Kevany.
Two years ago when NZBusiness looked at the accounting software sector, it was all about ‘the Cloud’. This year the talk is about mobile, smarter and more automated technology, apps, add-ons and the ‘hybrid cloud’ – even ‘agnosticism’ (platform independent). And to top it all, SAP for SMEs is now available. It’s been a busy marketplace.
So how important is the delivery system versus the solution or service you get?
“Being able to log into your accounting software from a café is not the feature that will convince most business users, who have progressed beyond the start-up stage, to select a particular system,” says Kevin Carberry, Accredo Software’s channel manager, dealer network. “There are lots of other factors in play, particularly on-the-ground support and software which remains current and compatible wherever you choose your ‘comfort-point’ to be, as we evolve our leading business software.”
Carberry’s rather intriguing title gives an indication of the role he plays in matching each particular business’s needs with the most apposite local skills and business compatibility support.
“Although we are known as Accredo Software, we are a service company through the 80-plus business, accounting and IT professionals who directly support our offering across the country.” He says half their customers have been using Accredo software for more than 12 years, upgrading at their own pace, according to their own business needs.
“We have one customer, a cashbook and general ledger user, who joined us in 1982. The company changed ownership some 15 years back and they update this basic offering as and when they feel they should. No one hustles them.
“That said, a great strength of what we offer is that, as your company develops different business processes and adapts to a whole range of demands from customers and suppliers, our solution has the built-in capacity to grow with you.
“During growth phases you need to be able to establish procedures which help your staff undertake scheduled duties without making mistakes. We help minimise user-error and give you time to work on the business, rather than spend it putting out fires.
“As your business grows, stronger reporting and analysis tools become essential. You need to know which products sell well, and who your most valuable customers are. Obtaining one consolidated view of the business is hard to achieve using error-prone spreadsheets.
“With Accredo, you can extract as much or as little information as you need and do all the reporting right within the system.
“I’ve been with the company for nearly 19 years. People especially enjoy the partnership aspect and the fact that we aren’t driven by sales targets, but by client retention. Customers becoming successful and then being bought out by much bigger organisations is one of the major reasons we lose them.”
So to what does he credit the exceptional retention rate in one of the most competitive IT markets around?
“We always have the phone answered by a human and our support is not via Skype or a webinar. Our partners, because they live locally, understand that business in Gisborne is different to business in Auckland. I often describe them as ‘translators’ because they speak the ‘local dialect’ if you like,” Carberry says.
Just as you found yourself comfortable – or not so comfortable – with the cloud, along comes Cognito Systems and their MoneyWorks Now, “an early adopter of the hybrid cloud, giving you back control and allowing you to take a copy of all your data at any time”.
“Apart from a much better, more responsive user-interface,” says Grant Cowie, MD Cognito Systems, “this also enables complete integration with your desktop and local area services and overcomes the downside of traditional cloud systems, where you no longer control your own data. Users can choose to host their data locally or in the cloud.
“It’s widely accepted that dedicated apps are better than browsers – just ask any smartphone user.
“MoneyWorks is engineered to deliver big business functionality at small business pricing. It is built for the SME business user who is serious about getting more from their accounting software. Briefly, it is extremely powerful, super-fast and can handle complex accounting needs easily.
“Being scalable, having an extremely rich feature set, operating cross-platform and sporting a very powerful reporting engine, we think it is ideal for fast-growing New Zealand businesses.
“The system is also agnostic when it comes to delivery method – cloud; your local network; or just your Mac or PC. You’ll get a consistent, high-quality experience.
“We like the fact MoneyWorks doesn’t believe in marketing feature-bloated ERP services, like some other accounting systems, with all their associated costs and complexity,” says Cowie. “Instead we focus on delivering accounting and associated functions, such as inventory management, extremely well and integrate seamlessly with best-in-class applications like MS Office, Filemaker and services such as Payroll, CRM and e-commerce.
“It also works with customers to create tailored integration into existing business systems,” Cowie says.
Flexible, app-based solutions
Catie Cotcher, GM Business Group for Reckon, believes Reckon’s unique, app-based approach and pricing model effectively makes the recently launched Reckon One online offering incredibly valuable.
The product – a world-first for SMEs, according to Reckon – runs on HTML 5 so users can access the system on any device. The system’s user interface radically simplifies workflow and ease of use, and it includes an API service which allows third-party developers to link in to offer their own applications.
“Most SMEs don’t want to invest hundreds of hours trying to understand a very complex piece of software to do their accounts,” says Cotcher. “They want to spend that time actually running their business.
“Reckon One is a game-changer in this respect because of its flexible, app-based system which allows the business owner to choose the apps they need, when they need them. This also makes the product incredibly affordable. The core app starts from just $5 per month. It’s then only $2 to $3 dollars more to add the apps you need, scaling up the system as a business grows, possibly saving hundreds of dollars a year compared to other products.”
Cotcher knows the New Zealand market backwards. She believes Kiwi SMEs need software that ‘does the heavy lifting’; has a range of integrated app options; is mobile and always accessible; and automates your invoicing.
“After a while Excel spreadsheets start to get unwieldy, and it gets harder to keep track. You’re probably having to enter things in multiple locations, increasing your risk of potentially costly errors. You need accounting software to link everything together, including syncing your bank feeds so you can virtually eliminate data entry.
“Take Paddi Roberts, a dance teacher and psychologist, for example. Because she had various sources of income and was using a range of providers things got complex. Getting professional accounting software not only meant she could manage her finances more easily and more reliably, but it also gave her extra time back,” says Cotcher.
“As an SME or even a sole trader, you don’t need the same accounting capabilities as a major corporation. You just want to pay for something simple; only what you need. But you need the capability to add more features, if and when needed. Modular, cloud-based software is an affordable and flexible option.
“Another example: retired airline pilot, David Jacobs, developed an iPad app demonstrating a special landing technique. He wanted an accounting solution for his new business, but getting a full accounting system, with components he didn’t need, seemed overly complicated and expensive.
“With a system offering a range of apps, he could simply add them when he needed them, effectively designing his own software, picking only the features he needed and adding more as his business grew.
“When you are working all over the place, you need to be aware of how much work you’re actually doing. You certainly don’t want to forget to bill your hours too. Cloud-based accounting software could be the answer. It can be accessed by anyone, anywhere, which means you can add different users no matter where they are.,” explains Cotcher.
“Reckon’s Working Accounting software lets you track projects, as well as time and expenses. You can track your time spent on a particular project and account for all your costs, and get instant timesheets and expense reports.
“And, the more accurate and professional looking your invoices are, and the sooner you send them, the more quickly and reliably you’ll get paid. The problem is that many of us fail to do this promptly and end up with a cash crunch.
“Simple fact; if you don’t send out invoices, you don’t get paid. More than half the invoices are already settled beyond the 30-day payment period.”
Too many self-employed are already working 12 to 14 hour days, and hitting the books at the end of the day is just ‘too much’, says Cotcher.
“Plumber Jason Chivers gave cloud-based accounting software a go. It has allowed him to instantly invoice via his iPad after completing a job, easily and accurately. He can then move on quickly to the next job and earn more money, as well as free himself up earlier to enjoy leisure activities.
“Remember, your time is valuable; time is money. Let’s say that just one of these features saves you an hour a month, allowing you to spend that extra hour on billable work. Even if you are on the minimum rate – $15 to $16 an hour – you’ve already paid off the cost of your software,” Cotcher says.
Lisa Martin, executive director of bookkeeping and accounting specialist, GoFi8ure, says to get the best from these shiny new tools, add-ons must be configured properly from the outset, but cautions the market is in danger of becoming ‘a lolly shop’.
“First, cloud computing revolutionised how we do business. Then, Xero turned accounting on its head. Next, the ‘add-on’ came along. Toggled neatly together with our in-the-cloud accounting systems, its arrival started to make our business lives even easier.
“A couple of years ago there were only a handful of generic add-ons to choose from, since then the add-on market has splurged. A quick peek at Xero and MYOB’s marketplaces will show you just how many of these helpful little tools there are. Some are still generic but many are now either tailored to a specific category, or profession, and competition is rife.
“This is fantastic for all time-poor business owners who want to automate every level and every code within their company for efficiency. And it is great that these whizzy add-on features can free up time by completing involved tasks out-of-hours – through the night even.
Martin believes adds-ons are “absolutely wonderful for streamlining pretty much everything in business”.
“By hooking directly into our data files, they can create sophisticated systems from invoices to inventories and from payroll to project management. They can spruce up ordering, delivering, tracking and chasing and, the best bit, be tailored to your industry.
“iPayroll, Vend, ReceiptBank, Timely, CrunchBoards and Float have truly educated us. However, there are now so many products to choose from that the marketplace is starting to resemble that aforementioned ‘lolly shop’. And there’s no sign of a slowdown. The add-on space is a marketing opportunity made in heaven for developers and entrepreneurs, with endless possibilities,” Martin says.
She is concerned that as add-ons become “more mainstream” there is increased risk the busy business owner will think these are DIY products; that all they have to do is click ‘download’, then cobble it together with their Xero or MYOB files.
“Configuring add-ons is a bit trickier than that. They need to be set up by someone who is certified in the software. This must be either a tech-savvy bookkeeper or the business owner. Whichever option is chosen, training is essential.
“For these gadgets to be useful for any business, they need to be calibrated accurately, and then maintained. They also need to be monitored. If no-one is keeping an eye on the data feeds then it is just ’garbage in, garbage out’.”
MYOB GM James Scollay reckons with the depth of software and support now available, it’s a great time to be running a small business.
“We were a start-up ourselves once, and we’ve never lost sight of that. The challenges businesses face and the pressures they come under are what motivates us every day to make our products better.
“But we’ve also reached a point where businesses can access a wide range of software, which only a decade ago was well beyond the realms of all but the largest corporations. They can also use the tools available to collaborate with business experts and their accountants, to get more advice and support.
“At the same time, we’re increasingly automating the administration – saving them time and freeing them up to focus on their business.
“Overall the evolutions in accounting software are now adding up to a revolutionary level of empowerment for New Zealand SMEs.”
MYOB is putting its money where its mouth is too - offering a wide range of solutions to simplify accounting, payroll, tax, practice management, CRM, websites, job-costing, inventory, and mobile payments. From micro-businesses, using the cloud-based cash ledger Essentials Cashbook, to SMEs needing solutions with payroll capability in AccountRight, through to larger businesses requiring the cloud-ERP enterprise solution MYOB Advanced.
Cloud accounting now makes up 67 percent of their new product registrations, up from 48 percent in 2014 and 24 percent in 2013.
Scollay again: “Two key trends we are seeing in business management and accounting software are the growth of mobile and the increasing use of add-on solutions. With their financial systems now available in the cloud, business want to access their data from wherever they are, whenever they need it.
“At the same time, they want to be able to do more with that data – whether that’s managing staff or cashflow, or using industry-specific tools to increase productivity in their business.” Mobile, smarter and more automated technology is offering greater levels of productivity, business insight and flexibility for local SME owners and managers, he says.
“And what that has meant for local businesses is not only more choice, but also more value being continually added to the products they use. A new free migration service also makes it easier for businesses to upgrade from the desktop to the latest MYOB online products.
“Integration with payroll – another key function, and pressure point, for business operators – has become vitally important in the local market.”
MYOB recently announced an investment in local company Ace Payroll.
“With our new online payroll solutions, our goal is to remove complexity and create even simpler solutions to help SME owners build better relationships with their staff,” Scollay says.
NZBusiness caught Adam Davy, head of advisory for accountancy firm BDO New Zealand, just before he boarded a plane for the UK where he had a meeting scheduled in Brighton with the CrunchBoards development team “which has just gone to market with their cloud offering, InTouch”.
You might think that’s a rather unexpected option for an international accounting firm boss.
“My vision is to see the market demand better solutions from their accountants and for the whole focus of accountancy to change to value-add advisory,” explains Davy. “I want the excuses to be removed and for IT solutions to be a major catalyst to long overdue change.
“Sitting down with your accountant to look at budgets, view month-end results and ponder future income doesn’t excite many SME owners. But, it’s certainly exciting the ones I’ve been working with, using the new real-time business advisory tool and Xero add-on CrunchBoards.”
BDO launched the product nationally across its 15 New Zealand offices in March.
“It’s a game-changer in the world of business advisory,” says Davy. “No more reams of complex spreadsheets and hours of mind-numbing number crunching. When businesses get online with us, working with our new offering, they have an entirely different experience. The data is easy to manipulate and we can build whatever the client needs.
“Within a matter of minutes we can show them exactly how they are performing now; model future scenarios to help them reach their goals; understand their metrics; their KPIs; all without working offline, risking data errors, inefficiencies and struggling to navigate the information.
“CrunchBoards is also proving its value in the boardroom, giving directors seamless and instant access to relevant and critical data. Too often decision-makers are working on a ‘best-guess’ basis, due to lack of relevant data, or even worse, a sea of complex data.
“It gives decision-makers seamless and meaningful budgets with multiple scenarios; the ability to analyse data live at the table; and be made aware of trends and KPIs immediately. That means they’re deciding ‘where to next’; not just looking at where we have just been.
“Ultimately, real-time advisory is about empowering business owners. No longer is a session with their accountant a history and compliance lesson, but a live business plan that shows them how to make their business better,” Davy says.
The accounting software market has never been livelier.
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Soltius delivers SAP for SMEs
Many people think of SAP as only for very large companies. Yet more than half of SAP’s 200,000 customers worldwide are SMEs. With their new cloud business software, SAP Business ByDesign, companies can now run their entire business on a single, integrated platform.
“The benefits of Cloud ERP are increasingly being recognised,” says Shay Lambert, cloud service line manager for Soltius NZ. “Especially for growing companies who want to focus on their business and not on their IT. In response, all of the well-established enterprise software vendors now claim to have cloud ERP offerings.
“Generally these are their traditional ERP solutions in a hosted environment, often with an annual payment option for the licensing. True cloud Software-as-a-Service (SaaS) ERPs tend to be offered by newer, niche players.
“When weighing up their options, businesses may face a trade-off, between the security of a well-established vendor and a heavily customisable solution, versus the affordability, and flexibility of a SaaS equivalent.”
He says SAP Business ByDesign is a true SaaS solution, but it doesn’t require the same level of trade-off. “It was created to be quick to deploy – 12 to 16 week implementations are typical, compared to six months or more for the traditional SAP ERP. And it’s simple to adopt, as all SaaS applications should be. It also requires no IT infrastructure and is simple-to-use, having been built from the ground up to run in the cloud.
“We see it as an affordable option for growing businesses who need to be able to scale up their operations without being held back by their business systems,” Lambert says.
“Supply Chain Management, Material Requirements Planning (MRP), project management functionality and a CRM module, which covers the entire sales and marketing process, are available, out-of-the-box, as part of the standard solution.
“Although the package uses predefined, end-to-end processes, the system can be adapted to customers, for example, with multi-step approval workflows, as a simple configuration exercise, rather than a software development. Where more significant modifications are required, Soltius, as an approved partner, has the capability to extend the package to meet customers’ specific needs, by including entire new modules, as add-ons.
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Builder sorts neglected accounts in three hours
Kyle Pomeroy had been working in the building industry for his father’s business for nine years, when he decided to go out on his own. After moving from his hometown of Balclutha to Dunedin in 2011, he formed his own company the following year – Kyle Pomeroy Builders Limited.
To begin with, Kyle was completing his accounts by hand, using a cashbook program.
“My knowledge of accounting and bookkeeping was terrible,” he says. “I was forever and a day making mistakes. With the cashbook program, you have to input each line by hand – it took hours. I then upgraded to some other accounting products, but they were really confusing.
“So, my brother, who takes care of the accounting for his local church, put me onto MYOB Essentials. It was so simple that within three hours I had taken care of a whole year of accounting.”
“I had been looking at paying an accountant to sort it all out, but that would have cost me hundreds. The best part of it is its ability to accurately file all information.
“This ensures there are no mistakes, it saves a lot of money with the accountant, and it’s great having the option to set up automatic rules – then you can just log in once a month and it’s pretty much all done.
“Now, instead of spending hours and hours completing GST returns, it’s taking just 20 minutes a month.”