Cloud software: which is the right one for you?

With an abundance of cloud software on the market already, and new entrants coming in each month, cloud software has quickly become a myriad of options which can bedazzle clients.

We have therefore chosen this blog of where the market is at, how it got here, and to give a lowdown on the main contenders on the market with our independent views. Whilst we are Certified Partners with a number of these items of software, these thoughts are our own, and provide you with an independent evaluation of the individual software.

Back then in the Mid-Noughties

As a brief background, the there used to be two main bookkeeping packages – Sage Line 50 and Quickbooks. Other software was available – TASbooks and MYOB for example – but the Sage and Quickbooks led the way.

Sage used to be the software liked by Accountants but needed a good bookkeeping knowledge.

Quickbooks was liked by clients as it was more intuitive for them, but less liked by Accountants. However it was the US market leader and continued to be the antagoniser to Sage in the UK.

Both of these items of software were a “buy it” module, and needed to be installed and updated on you server / computer.

Historically, Sage had its software for each level – Sage Line 50 for small companies, Sage MMS for large companies and Sage Final Accounts Production for the Accountants. The integration between systems helped the Sage dominance. Certainly in the Final Accounts Production stage, if any newcomers threatened to give a potential competition to Sage, they had a big enough “war chest” to buy the newcomer and therefore remove the competitor.

 

 

Xero

Along comes Xero

Xero, a New Zealand based software, came along in 2006 in its first versions.

This was the first real cloud software pioneer, and given the investment in internet connection at this time in many countries, the timing was just right. The software was designed to be used through internet explorer or chrome.

The advantages were that the software was automatically updated and there was no updates needed. However, the lack of broadband reliability – if the internet was down now you could not do you work – and the subscription based model meant it took some time to embed itself.

Xero also offered open software – a model akin to Apple. In short Xero does what it does, but is open to others “linking” into it. Whilst this is in part a risky approach – it relies on the skills of independent developers rather than its own – it does allow an exponential developement rate,with minimal cost to Xero.

 

 

FreeAgent Cloud Software

FreeAgent Arrives

Xero was, and is, aimed at the small business. It effectively targeted those Sage Line 50 customers who had an accounting knowledge and also worked hard at building relationships with Accountants.

But what about those micro businesses and sub-contractors? In 2007, FreeAgent was formed to bridge this gap.

A Scottish based company, FreeAgent was formed to meet the needs of the micro business. The functionality was aimed at these micro-businesses and so VAT and CIS was central to the development of the software.

 

 

Exact wakes up

In 2007, Exact realised that Cloud was the way forward. A Dutch company established in 1984, Exact had a reasonable server based offering.

But in 2007 they purchased an American based software and developed it. They concentrated on the upper end of Xero, with stock management and Project Accounting being a focus for them.

Their advertising is mainly through the sponsorship of Max Verstappen, the Formula One driver for Red Bull, so keep an eye out for their logo when you next watch the race!

 

Sage

Sage Reacts

Sage were, in our opinion, fairly arrogant to begin with. Whilst these new entrants chipped away at their market share, as an accountant we got the feeling they believed cloud software would not take off. They had the market share and why should they change?

They reluctantly offered a half hearted solution – effectively copying and pasting their desktop software to the internet but not really taking advantage of the cloud capabilities. whilst this was an advancement, it did n

 

ot rival the capabilities of Xero and FreeAgent.

However, in the last years a lot of development has been undertaken on the software and it is now very useable and client friendly.  But given the headstart that Xero and Quickbooks has had, it still has some catching up to do.

 

 

Quickbooks

What about Quickbooks?

Although slow initially to react, Quickbooks have woken up to Cloud. The first version was rudimentary. However, given their might in the US, their development has been exceptional.

They have also been advertising heavily on radio and TV.

The software has come a long way, and is now very useable and liked by a wide range of clients no matter what their accounting knowledge is.

 

 

KashFlow

Kashflow?

Iris a major accountant software provider for Accountants – expensive but well respected.

Kashflow integrates well with the accountants software, and is good software. But their rise to success has been due to this integration, and is not necessarily due to the quality of software. And whilst integration is important, it should not be the driver to success – the client usability should be.

Iris have learnt from the past, and Kashflow is a simple but effective item of software, using the functionality of the Cloud.

 

 

Reckon One

Reckon One

Initially a paperless Softwàre solution for Accountants, Reckon One had a good history of providing robust software.

Reckon One is keenly priced, and broken down into modules so you only pay for what you need.

whilst the functionality is not quite there yet, it is being constantly developed. And at £2.50 per month plus VAT (a saving of £19.50 per month over Xero) it is certainly worth considering.

And what about others?

Each month, new offerings are released. Whilst pioneers are often leading lights, their mantle is often usurped.  A Simas Accounting & Tax, we are keen not to be tied into one provider. We recognise that there is not a one size fits all and we remain independent and free to recommend the right software for you.

Add ons

There are a large number of add ons and a short which integrate to a large number of the above software offerings.

Those of note would be ReceiptBank – this helps with invoice entry in particular.

Expensify is very good for employees entering expense claims, whilst the Good Till Company offer very good point of sale integrations.

So which is best?

To ask this question is akin to asking which of your children best!

Each item of software has its own benefits and drawbacks.

Xero’s tagline is “Beautiful Accounting Software” and it is widely regarded as the nicest user interface. But at £22 per month it comes at a price. It is the UK’s market leader, and independent developers do develop their add-ons with Xero in mind.

Quickbooks is the World leader, due to the dominance in the US. 4 years ago, the software was not great but the development has been exceptional, and it is now pushing Xero hard.  Its dealing with CIS is strong – an area which Xero is working on – and so for those companies who either use subcontractors, or are subcontractors themselves, Quickbooks is a strong consideration.

Exact is good for the larger business, but there is a need for a training investment.  The software is good – if used correctly – but to do this involves a certain amount of accounting knowldge from the clients.

Kashflow has an an offering but has not got the investment war chest that Xero and Quickbooks have.  Whilst it is a useable solution for a wide range of clients, it does not have the weight in the market place that the other solutions have.

FreeAgent is good for the smaller client but the cost is high for what it is.  It is very strong on VAT and on CIS to some extent, and the usability is good.

Reckon One is very keenly priced – the functionality is not as good as the leaders yet but is being developed constantly.

With so many options, personal preference will always come into it.

So it will be a case of identifying your needs and requirements to find the right software for you.

 

 

 

Simas Accounting & Tax