The SaaS accounting war

Of Australia’s estimated one million independent contractors, many see accounting as a costly, tedious time suck they can’t escape. 

The accounting process, little improved since the days of VisiCalc, is dominated by just a couple of software vendors. 

These factors may explain why accounting is a crucial battleground for upstart SaaS providers. The trades industry, where contractors lack access to paper files and desktop PCs, is especially receptive to cloud and SaaS solutions that let them invoice, order and quote in the field through an app on a smartphone or tablet.

Xero also grew up in the GFC and with a growing number of one and two-man bands and start-ups birthing who prefer the pay-as-you-go model. But Xero also had to decide whether or not to support the channel – and, for that matter, which channel, says managing director Chris Ridd.

“Two years ago I was convinced that accountants and bookkeepers would rapidly become this technology channel and we are seeing it,” Ridd says. 

“You’re seeing more innovative accountants start to embrace technology and hiring in technical skills but it’s still early in the cycle.”

Xero’s success is not unchallenged by incumbent MYOB, which rolled out cloud and hybrid solutions – Live Accounts and AccountRight Live, respectively – on the back of its formidable partner channel.

Pam Madytianos and Pam Pitt, co-founders of MYOB partner of the year 2 Peas helped the software maker implement subscription licences at Australia Post and Retail Zoo, the brand behind Boost juices and CIBO Espresso. 

Pitt says that 2 Peas added value on top of MYOB’s SaaS by crafting solutions that considered the quirks of the logistics and retail sectors. “Plus, with Retail Zoo, we developed the financial planning and we’re involved in one-to-one training with them,” Pitt says. 

“It’s a lot more than just selling software.”

Pitt says clients get excited once she explains how bank feeds mean they don’t have to re-enter at-bank data. And SaaS enables advisers to better understand and guide their clients. “It’s the reason why we can support clients across Australia because we can get into their software while their accountants are working on it.

“Prior, we’d use remote access software but there were hassles explaining to the client how to install the software. Boost Juice the other day were quite excited because they have multiple stores and the manager at one store could enter end-of-day data and the owner was watching it at home.”

2 Peas bolts on bookkeeping, software training, support, process and compliance documentation and payroll to stay relevant. Retail point-of-sale systems are also providing more revenue.

Pitt expects more of her clients this year to take advantage of Shoeboxed.com.au, a service based in Sydney that scans and verifies receipts on to the cloud, streaming them to accounting software and making them searchable online.

General manager of MYOB’s business division, James Scollay, says start-ups and freshman businesses are a clear target for its new cloud services.

“People can be up and running quickly without a need for an accounting background,” Scollay says.