I started using cloud software like Xero, WorkFlowMax, Unleashed and Shoeboxed for the first time in 2011. Accountants like me became known as early adopters and it was electrifying to be involved in the early stages of the small business cloud software revolution. It was well overdue.
Back then, whilst it was exciting, the little-talked-about truth is there were times where it was challenging and frustrating. The first versions had good basic features but little customisation. A lot of our clients ran businesses that were predominantly professional services, small retail and trade who shared common business models but differed in how they managed their invoicing, payroll and inventory. This meant that early versions of these products only catered for ~80% of client needs. We spent a lot of time creating workarounds and promising that the features and customisation they needed were on the ‘Roadmap’ and coming soon.
Four years on and the advancement of Xero and other cloud products has been as astonishing as its adoption rate. Now that ‘cornerstone’ products in this ecosystem have completed building core functionality and customisation, it now comes down to the “interesting” time where these products can now look to cater for more of the market in more ways. I believe some will keep it simple and broad, utilising the API to allow third-party software to create custom ‘connected solutions’ that a business can custom integrate together to suit their needs. Others will pick one or two verticals and concentrate on building a very robust solution to cater for their specific needs. The first relies on low-cost high volume subscribers whilst the latter will have a high-cost low-volume business model.
What would you prefer?
This will depend on your business model, the size of your business and what legacy systems you have in place. Let me share our experience as an example of the challenges rapid growth can present.
Our business has grown significantly in the last four years and we now have this connected suite of tools we use to run our business that are integrated by API’s. It works really well and is scalable for our current business model. However, as we grow the number of services we offer requires more sophistication and it exposes gaps in functionality. There have been a couple times where we’ve had to plughole with workarounds. While I loved the flexibility and Lego approach in choosing our suite of products tailored to our needs, I hypothesise what the longevity of our current approach is. I have to admit, there are times where I dream of an all in one product that catered for our needs, current and future. I even wrote about it here. A rich, robust, logical and intuitive product that instead of having 15 chrome tabs open, I had just five, where I could retire products to improve our efficiency rather than adding them.
Cloud-accounting still only represents 8% of the Australian Market and a 2014 survey confirmed that 69% of accountants are already using online accounting software. This represents a huge opportunity for software developers to build products for some 2 million small business in the Australian market alone that let’s face it are probably using Excel. From my perspective, I thought a lot of the enterprise desktop based companies such as MYOB AccountRight, SAP and Reckon were not investing enough in the growing cloud market.
I was pleased with the release last week of MYOB Advanced. I believe this is an indication that the level of investment targeting business who will become mid-large businesses is increasing. This is great news because not only are the likes of small business software investing in developing more robust and targeted solutions but there is also enterprise level software being modified for smaller businesses.
Our goal here at Interactive Accounting is to help you grow your business to reach its full potential, this includes using products that are scalable. While we have experienced less than a handful of clients who needed to transition into an enterprise system, it’s comforting to be able to advise you that there will be a greater abundance of cloud solutions available in the near future.