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Sholto Macpherson, Author at The Latest on Accounting Tech for SMEs - Page 4 of 5

Ecommerce Accounting, ATO in Full Force and New Faces at ABE 2019

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And that’s a wrap. Accountants and bookkeepers of various stripes shrugged off the morning downpours to make this year’s Accounting Business Expo the biggest show yet.  

Serial entrepreneurs Ron Drost (iPractice Apps) and Rob Cameron (FYIDocs) showed off their latest ideas for automating compliance. MYOB demoed beta modules from its Connected Practice vision.

Futrli demoed their SME focused forecasting tool Flow and Xero covered digital app stacks for firms and explained what happens next with the HubDoc acquisition.

Four assistant commissioners from the ATO pulled full houses for the latest on Single Touch Payroll, who the ATO’s Black Economy Taskforce is targeting next, how to prepare for e-invoicing and how firms should handle SMSF for financial planning clients. A big thank you to Dana Fleming (SMSF), Peter Holt (Small Business), Mark Stockwell (E-invoicing), and John Shepherd (STP) for being so generous with their time.

New faces included Sarah Lawrance from Hot Toast – a firm that only services creative types – on Why Specialisation Is A Powerful Strategy For Any Firm, and Ryan Kagan from Blue Rock with a packed room on automating his firm using Power Apps in Microsoft Power BI.

There were over 120 sessions, roundtables and demos over the two days and the ones I sampled were excellent. The one that taught me the most was one of the last of the show. Scott Scharf, co-founder of the US-based Catching Clouds, gave a masterclass on how to specialise on ecommerce accounting.

Scott’s tips and tricks on dealing with Amazon – always log into clients’ accounts with a sub-account so they don’t get barred, how to avoid short and long-term storage fees in Amazon’s automated warehouses – were real eye-openers.

Thank you to all the attendees, sponsors and speakers who made it all possible. And of course the National Media team including expo director and lead diva Laura Venables, marketing guru KJ Harvey, Stace, Georgia and the rest of the crew under the command of the unstoppable Mark Harvey. Starting this event from scratch in just under three years is an amazing achievement, and they deserve a well-earned rest after the sale of the show this month.

Accountech.Live 2019 and next year’s Accounting Business Expo will be produced by global conference and expo maker Terrapinn, led by Australian MD Craig MacFarlane. It’s only going to get bigger and better from here.

Image credit: National Media

Square Adds Free Invoicing App to Software Lineup

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Square has launched a free, standalone invoices app called Square Invoices in an interesting expansion of its portfolio. The payments platform already has a free point of sale app called Square POS and continues a disruptive push into the accounting software space for micro-businesses and new businesses.

The business model for Square is to give away free software as a way to increase the number of transactions moving through its payments platform. There are no monthly fees for Square Invoices, which works on iOS and Android. Users only pay for processing when they accept card payments – and they don’t pay any more than the standard rate of 2.2%. (There are no fees for cash.)

The invoicing app includes premium features found in paid accounting software. For example it includes automatic payment reminders (which Xero added in 2015), tracks payment status of each invoice (opened, overdue and paid), and can attach documents and receipts to invoices.

Here is a summary of the feature list:

  • Sending quotes and allowing the customer to accept/decline
  • Requesting deposits
  • Issuing recurring invoices for instalment payments
  • Store card on file for returning customers
  • Set automatic payment reminders
  • Add attachments and receipts
  • Customise invoice appearance
  • Accept payments online
  • Track invoices and payment status
  • Send and manage from desktop or app

It’s a clever move by Square. Even relatively new technology is becoming commoditised so quickly that it is now an incentive to use a payments platform rather than worth paying for in its own right. It also pressures the accounting apps.

Xero’s cheapest edition costs AUD$25 a month and is limited to sending five invoices. The next edition, with unlimited invoices, costs AUD$50 a month. And that doesn’t include a point-of-sale app or a payments platform.

Intuit’s QuickBooks Online costs AUD$10 a month for unlimited invoices and it also owns the payments platform. However, you will still need to buy a point-of-sale app.

The free software brigade is growing. Wave kicked it off with an ad-supported model, and there are signs that banks could release their own accounting software to improve retention.

Will Square release a basic accounting app? It clearly has the capability. Or will it keep releasing operational apps that plug into a basic ledger from an accounting software company?

The upshot is that Square’s strategy affects the top of the funnel for Xero and Intuit. Every business starts off small. A fast-growing business will quickly need something more robust than Square’s apps – but Square could have a big say in where they go next.

Square Invoices is interesting development and Square is one to watch.

The Square Invoices app is now available in Australia, the US, Canada, Japan and the UK via App Store or Google Play.

Image credit: Square

How to Use Excel to Automate Processes in Xero and QBO: ABE19

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Plenty of accountants consider themselves wizards of Excel. But can your local Master of Macros use a Microsoft spreadsheet to post journals in Xero or Intuit QuickBooks Online?

A long list of apps and tools have promised to replace or “kill” Excel. Google Sheets has picked up many fans since its launch eight years ago because it was the first to offer simultaneous editing by users in multiple locations.  

But Excel is proving that it’s not just a tool, it’s a platform, and one with a lot of life left in it yet. Lance Rubin, CEO of Model Citizn and CFO of Sequel CFO, is a passionate advocate for Excel in this era of cloud accounting software – though he is quick to point out that he doesn’t see it as competition.

“Everyone says, ‘I could build an accounting software with Excel’, and I’ve been guilty of that as well. But that’s not to say that you should,” Rubin says.

“Excel is not accounting software. You’ve really got to look at what Excel offers that is different to everything else.”

Lance Rubin, Model Citzn

Rubin was looking for a way to automate adding journals to Xero while working as CFO for Banjo Loans. He looked at different ideas for automation but realised that he was already doing the calculations in Excel then manually typing them into Xero. Why not push them directly into Xero from Excel?

Rubin found apps that turned Excel into an automation engine for Xero – and not just for automatically adding journal entries.

“If you take on a new client, you have an opening balance sheet, right? You then have to post each of the opening journals. And guess where most of that information is sitting? It’s still back in Excel. It’s probably from a MYOB CSV extractor or some other accounting system,” Rubin says.

Rubin also found it easier to create a new chart of accounts for existing businesses. Instead of logging into Xero and clicking in and out of each account he can change account names in a list of Excel cells and push a button to update all of them.  

Rubin can also assign tracking codes and tracking information to accounts much faster through Excel than through Xero’s native screens.

“It’s literally a click refresh,” Rubin says. “You can actually have a live feed out of Xero into Excel. So someone can be sitting in the Philippines posting information and you can see that information on a live dashboard.”

Lance Rubin will be sharing more details about these Excel plugins at the Accounting Business Expo. Session details below:

Using Excel to Automate Processes in Xero and QBO? Yes You Can
Wednesday 20 March 4.25 – 4:55pm
Business & Finance Conference
Register for your free ticket today!

Image credit: Quick Win Developments

FYI Docs Pitches “Zapier for Firms” Platform for Multi-App Automation

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Automation is all the rage in small business accounting software. How come automation in practice management software has moved so much slower?

“It’s almost (worthy of) a detective story,” says Rob Cameron, CEO of FYI Docs, a new practice management software. “A VC asked me, ‘Why hasn’t someone done this already?’ It’s because you’re dealing with unstructured information.”

Compliance requires sourcing many types of documents from different areas, often requiring clients to fetch themselves. On the other end, firms can slow down jobs by moving them through various levels of approval. In smaller firms, the work of managing documents, jobs, emails and billing occurs across multiple systems. Automating tasks across those systems hasn’t been possible.

This is why the average job to complete a tax return is still about 23 hours, according to FYI Docs’ research.

Cameron saw the potential of using an integration platform such as Zapier to trigger tasks across multiple applications. FYI’s goal is to use scripts running over several apps to reduce that compliance window to 11 minutes.

This involves using algorithms to identify the content of emails, to systematically create, name and store reports and other documents, and to move and assign tasks between staff and projects.  

FYI Docs squarely competes with Karbon, a similar concept and tool co-founded by three former Xero executives, Stuart McLeod, Ian Vacin and John Freeman. The differences appear to be FYI Docs’ singular focus on becoming an open process automation platform that moves client data between an array of applications (like Zapier). Karbon has approached the same problem as one of communication and customer relationship management (CRM).

(Another factor which could have as much impact on growth as product design: Xero shut out Karbon from sharing data with any of its practice tools due to a falling out with management.)

 

How does FYI work?

FYI automates the capture, filing and processing of source documents to support accounting and tax. Here’s an example of one of its automated workflows working across multiple apps:

  • Identify key documents required to complete a workpaper
  • Find the documents in a client’s HubDocs account
  • Import, file and name the documents following practice-wide rules
  • Update the associated workpaper with cross links to the source documents
  • Compare and validate the amounts in the workpaper

Cameron says the firm has automated 30 processes and has a long roadmap of many more. “We have 12 months of glorious process automation coming up,” he says. The completed processes include monthly billing, onboarding clients, ASIC payments, annual statements and tax assessments.

For the latter, FYI contacts ATO for a tax assessment, checks it with Xero Tax to see that it agrees, then brings it with the resulting file and metadata into FYI. It then creates a templated email to send to the client.

FYI can run custom processes across Xero (blue client file) such as running a defined set of reports to support Xero Workpapers. The reports are saved in the customer file in FYI as links to Xero.

FYI can automatically capture documents from Dropbox, Google Drive or Microsoft OneDrive and file them in FYI, eliminating the client request goose chase. All activity in FYI is tracked in an audit log.

A slightly more unusual automation identifies negative sentiment in client emails. If a client complains to an accountant about fees or quality of service, FYI will instantly notify the partner.

“The interesting observation is how much the world has moved onto emails, and how they’re all sitting in everyone’s inbox and unstructured,” Cameron says. “They are a very rich source of information but also a risk as well,” he adds, referring to Australia’s recent royal commission into banking.

FYI has been designed specifically for firms running on Xero Practice Manager and brings together document management and CRM, and process automation. The platform is not a standalone practice management solution, or at least not yet.

Xero Practice Manager handles all the task management, time and billing. Xero also acts as a central database for clients and staff. To technologists, Cameron explains FYI as a combination of Microsoft Office 365, (document management), Hubspot (CRM), Asana (task manager), and Zapier (process automation.

The open-door policy with Xero has made it possible to deeply integrate the products. Instead of storing a PDF from Xero Workpapers in the FYI Docs client file it stores a cross-link that opens up the document in Workpapers. (Tasks don’t flow from FYI to Xero Practice Manager – yet.)

 

A strong history – with the competition

“This is the fourth time that I’ve built this product,” Cameron says. In 2006 Cameron sold a document management solution to MYOB called Level 31 which helped accountants move to a paperless office. That took seven years to build and sell (starting from 1999).

Cameron stayed on for five years as MYOB’s global head of product strategy for accountants. He then left and built the management accounting tool Dovetail, “a combination of bookkeeping and virtual CFO”, which he sold to MYOB just two years later in March 2014.

Then followed his second stint at MYOB as platform strategy manager for the company’s Accountants in Practice division.

A chartered accountant for 20 years and a successful software entrepreneur twice over to MYOB. Why shift to its biggest competitor?

“I was inspired by the Xero story,” Cameron says, citing its launch from Wellington, New Zealand into a billion-dollar powerhouse with a global footprint in just 12 years.

It’s also clear that a good dose of pragmatism helped Cameron decide to focus exclusively on one accounting platform, and why this time he chose Xero and not MYOB.  

“When you work with a single platform your ability to onboard goes through the roof. Rather than doing all (practice management solutions) and having a crappy user experience across all of them,” Cameron says.

As one of the first to market with cloud-based practice management software and the first to make it free, Xero swallowed a good chunk of firms in two key categories; early adopters and small to medium practices. These don’t pay as much for practice software as the larger firms on MYOB Accountants Enterprise. But it is easier for smaller or more entrepreneurial firms to switch to new products and they are more open to trying new things.

FYI Docs includes features such as an approvals process and customisation through extra fields to handle large firms with multiple offices and many partners. But Cameron is not keen to sell to them. “I don’t enjoy working with them that much. Their decision time frames are ridiculous,” Cameron says. “We are going after 50 seats. We’re not going after the multinationals.”

According to Cameron, Xero is investing time and resources in helping Cameron bring FYI Docs to market as quickly as possible. Cameron has had deep access to developer teams working on the practice management tools including Xero Tax and Workpapers as well as Xero Practice Manager.

Xero’s vision and delivery for practice management has been spotty over the past three years. It has launched excellent ideas such as Xero HQ. But it has failed on more pressing stuff such as better integration between Xero Workpapers and Xero Practice Manager, both acquisitions. Firms don’t pay directly for Xero’s practice management software so it’s not surprising that their development is not a priority. Is Xero supporting FYI Docs because it is doing what Xero could never afford to build itself?

FYI Docs will be at Accounting Business Expo 2019 at Darling Harbour, Sydney, on March 20-21. You can register for a free ticket here.

Rob Cameron is presenting two session at the expo, details below.

  • Tuesday 11:50am – 12:20pm

Why Process Automation is the Killer App for Faster Compliance

  • Wednesday 10:05am – 10:35 am

Cloud document management – finally a solution that doesn’t ask your practice to compromise

Image credit: FYI Docs

Rippling App Gives Accountants A Tool for Back Office Automation

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Do you provide outsourced back office services to clients? Are you thinking about it? Here’s an idea that could give accountants and bookkeepers a way to automate the hidden legwork that sits behind simple tasks like doing payroll or sending letters of offer to new hires.

Rippling is a hard app to describe because it does an unreasonable amount of things. You could just say Rippling is back office automation, but that says nothing about the processes that it automates.

The concept is that the central workflows in HR – hiring staff, onboarding them, firing them – are the triggers for a number of workflows in identity management, IT security, IT operations and payroll. If you can use HR to drive all those workflows then you will save a lot of time and avoid a lot of mistakes.

“For accountants that are interested in taking on the back office more broadly, a lot of what’s in that back office is not traditional payroll. It’s whenever someone joins the company all the right agreements need to get signed, and then provisioning them with software accounts,” explains Parker Conrad, Rippling’s CEO, in his San Francisco office.

Rippling has a software integration platform that is like a limited, special use of Zapier: it only adds and subtracts users with features turned on in each app according to their predefined role.

Rippling starts with an applicant tracking engine with built-in electronic signatures. When a company adds a role and a salary to the letter of offer in Rippling, the app uses that information to kick off a role-based workflow which includes these steps:

  1. Creates a company email
  2. Adds the new employee to Rippling’s payroll at the salary amount offered in the letter
  3. Sets up healthcare and other benefits
  4. Buys or leases a new laptop which ships to arrive the day the employee starts
  5. Installs and manages endpoint security software on the laptop – and manages patching
  6. Adds the employee’s email to the right email lists, policy groups, and Slack channels based on work location, team and department
  7. Creates accounts with permissions determined by role to any of several hundred applications that connect to Rippling
  8. Creates a single-sign on, two-factor dashboard based on role for the employee so they can instantly log into all their apps

Once set up, employees can then use Rippling to track their hours, which feed directly to payroll, and manage the performance of their team members.

Rippling is effectively a master role directory. A business determines who has access to what and how based on role – it’s the key.

“This pain point of IT admin for bookkeepers is really real,” Conrad says. “A lot of modern bookkeeping is setting up these IT and other services for your clients. You’re trusting your client’s employees to make changes which will feed into your general ledger. If people weren’t set up correctly or removed that eventually affects you through bad data.”

Rippling launched a recruitment program for accountants who are interested in providing back office services to hundreds of clients. The program has a client command centre that shows all clients and their apps and services. An accountant or bookkeeper can hire or fire employees from any of the client companies.

Accountants get a 20% discount on Rippling for their clients, and accountants who use it for themselves get free payroll.

From one perspective, Rippling’s back office automation is really a Trojan Horse aimed to capture payroll. Payroll is a sticky product that every business needs and new players such as Gusto have shown that the market is open to new suppliers.

Rippling is also a great example of the gradual swinging of the pendulum from single-function apps back to suites. It commoditises security and payroll, while automating the most boring parts of IT operations.

Conrad has plenty of experience in HR through his previous company, Zenefits, which brokered and managed health benefits for employees. Zenefits was a big news story in its day for good and bad reasons – its fast growth (US$70 million revenue by the end of its third year) and paying US$7 million in fines for allegedly cheating on exams to license its online brokers.

Parker has put Zenefits behind him and has again built another fast growing business on a raise of US$7 million. Rippling, now two years old, officially launched in October with 1,000 clients and is adding 20 percent more a month.  

“That’s a fast growth rate. Hopefully people like what we’re doing, but it’s not so fast that the wheels are coming off the cart,” Parker said,  

Rippling costs US$5 a month per person for the core platform (plus a flat US$35 a month fee) and has four modules for access management, payroll and computers & security, each costing US$5 a month per user.   

Image credit: Rippling.com

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Digital First covers news and opinions on accounting technology and is read by tech-savvy accountants who understand the importance of technology in establishing competitive advantage.
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