The current state of online accounting software
Accounting software companies are developing products at a breakneck pace for small business and accountants, get accounting services Company in Bangkok with us. Here are the pros and cons of some of the more popular options.
Online accounting software is reaching notable benchmarks in terms of its maturity. It has largely replicated the power of desktop accounting software, either in its own right or through extensive ecosystems of extensions and compatible online applications.
Over the past 2 years all three majors have migrated to Amazon Web Services(AWS), the most popular platform for running software-as-a-service (SaaS), and the latest competitive front is in automating the basic bookkeeping functions of collecting source documents, turning them into bills and invoices and reconciling against transactions.
Let’s take a closer look at some of the key players.
Xero: 583,000 subscriptions (1.386 million globally)
Xero is continually improving the automation of the bank reconciliation processes, a concept it has labelled “code-free accounting”. It is doing this in two ways, and the first is in data capture. It announced at Xerocon that it had acquired HubDoc, an app that “fetches” documents from suppliers. For example, you give HubDoc login details to your telco and it will automatically download a SodaPDF version of the bill for your phone and internet every month, and save it into your cloud drive or server.
The process uses optical character recognition and other techniques to pull information such as date, due date, amount and tax, and adds these to a draft bill for you to review and approve.
The second step is to give Xero more control over reconciliation. You can set up a bank rule for repeat transactions from suppliers and check a box to automatically reconcile all future transactions from that supplier.
Accounting software is also moving towards performing the transactions itself. MYOB pioneered payments integration with its desktop M-Powered Services. Xero took it a step further with online invoices, which could use a range of payment providers, and has broken new ground with National Australia Bank (NAB).
Xero is adding the ability to pay bills from within the accounting software in a beta test with NAB. It works in a similar way to batch payments, but instead of downloading an ABA (Australian Bankers Association) file to upload to your internet banking portal, the user receives a notification through a NAB smartphone app to approve the payment.
MYOB: 618,000 subscriptions (304,000 online, 314,000 desktop)
MYOB is also working on ways to improve data quality to automate reconciliation by reinventing critical workflows. It has taken the novel approach of replicating the bank feeds concept (direct downloads of transactions from banks every day) to major suppliers.
MYOB’s online accounting software will receive direct transaction feeds from trades’ suppliers Reece and Tradelink, as well as office supplier Officeworks.
A purchase order added at the checkout means that the Reece integration will allocate each line item to a job in MYOB. When it comes time to invoice the customer, the software automatically pulls into the invoice all reimbursable items for that job.
“It’s not just about getting the bill in the system, it’s automating the workflow,” says Dale Dixon, MYOB head of product for SMEs.
However, the process of “getting the bill in the system” is also much easier now that MYOB has added a unique forwarding email for capturing invoices and bills that staff and suppliers can use.
Also on the theme of reinventing workflows, MYOB has added automated invoice reminders for invoices that are overdue. A customer can add the reminder to their calendar with a couple of clicks, so they know when they need to pay.
QuickBooks Online: 161,000 subscriptions (3.4 million globally)
Intuit QuickBooks Online (QBO) is pursuing a similar concept to code-free or invisible accounting it calls “accounting done for you”.
“We imagine a day where your accounting is done, your taxes are done, and your payroll is done, and you don’t touch a keyboard,” Intuit CEO Brad Smith said at QuickBooks Connect, its annual conference, in 2017.
QBO introduced automatic reconciling transactions in bank reconciliation at least a year before Xero did. It auto-suggests account codes based on how other QBO users have categorised transactions.
It also has a far more powerful mobile app and Intuit is driving the mobile experience faster and further. QuickBooks Assistant is a voice-operated tool that displays important numbers on request, such as: “How much did I make last month? How did it compare to the previous month? What was my margin?”
The end goal is a voice-activated interface for business owners that replaces the need for a mouse-driven experience in your browser.
Another important trend is beefing up the accounting tools in the app. Intuit has always focused on the business owner above the accountant and is adding practice management elements and tax office integrations, areas in which it lags Xero and MYOB.
Reckon: 47,000 cloud customers (as of December 2017)
Reckon One is the late bloomer of the online accounting crowd. Instead of competing head-on with the billion-dollar giants Intuit, Sage and Xero, it is focusing on the microbusiness and small trader category. Its product is the cheapest and most flexible on the market, with basic accounting starting at just A$5 a month.
Reckon One’s strategy is to do more with less. Rather than build an ecosystem of apps as Xero and Intuit have, Reckon One recently announced it had integrated with Zapier, an automation platform that connects to 1000 business apps. Reckon One can now hook into cloud applications in e-commerce, CRM, inventory, project management and beyond.
The most important trends at Reckon One are more around market strategy than technological development.
Taking it all into account
Business owners are spoiled for choice when it comes to accounting software. The Australian market is particularly overcrowded given the size of the business population. Yet the choice of which platform to go with will only become harder.
All the aforementioned applications run on global computing platforms that are adding artificial intelligence (AI) tools such as machine learning and deep learning. As software companies integrate these tools into accounting software, we will inevitably see jumps in performance and capability.
This will further simplify the process of managing a business and its accounts – and hopefully spur a new generation of entrepreneurs.
Australian stats at a glance
MYOB: 618,000 subscriptions
Xero: 583,000 subscriptions
Intuit: 161,000 subscriptions
Reckon: 47,000 cloud customers