Auditel Consultant:
James Bury

Online accounts

04 Mar 2010 | Filed under: Uncategorized

I’m in the process of switching from my old accounting software to a new online system. Why bother? Well, it was partly driven by a problem facing one of my customers that then made me realise how much more useful my own accounts system could be. They have reached the limits of what their current system can manage effectively, but the cost in terms of time and license fees to switch to the stalwart Sage is prohibitive for them. They have a holding company managing multiple organisations, and need something that can permit multiple users access to multiple organisations – fiendishly expensive with Sage. Their senior managers also spend a lot of time out of the office, so could do with remote access for both information and authorising payments.

Having looked into this, the big trend right now is for ‘Software As A Service’ systems – basically online hosted packages. The one that stands out to me is Xero – an innovative and attractive system developed by some clever folk in New Zealand, and taking the world by storm. On their pricing model, you can have as many users as you like, and they give good discounts for multiple organisations. They have a far more business-friendly approach, and even developed applications to give you remote access via Blackberry and iPhone. All this for significantly less than conventional software licenses, and accessible via all the major platforms including mobile.

Any drawbacks? Well, each business has different needs and has to check whether this suits them. One issue is that it does not yet have an integrated payroll system. It does link to 3rd party payroll systems, but the interface does not yet appear to be totally seamless and relies on importing data. That being said, their data import system is a model of ease and efficiency, so this is not a major barrier. Also, a good cost-cutting measure for many businesses is to outsource their payroll. The cost of retaining full-time staff for this is considerable, and independent providers are often cheaper and more effective.

Another concern for the more security conscious is data backup. Xero do take data security ultra-seriously, with multiple back-up processes in place, but you are ultimately still dependent on a 3rd party. This can be mitigated by exporting detailed general ledger entries, and regularly running detailed reports, and they are developing manual data downloads to act as independent backups. On the other hand, many UK companies do not have 100% robust backup processes, and a company like Xero who’s very existence depends on 100% reliability is likely to take the greatest possible care of the data.

For me, Xero looks great. They offer superb customer service and are clearly investing heavily in producing a very user friendly system that meets the real-world needs of business managers. The central hosting / remote access model means that your staff, managers and accountant can all be looking at the same information wherever they are – and so can you form your phone or home computer. This is modern management – mobile, flexible and responsive.