By Roger Gregg, CEO Invitbox
The ‘cloud’ is not just about the storage of data, or where we work and process information – it is about the connectivity of things. Interconnected cloud-based systems share and access information. As online accounting software develop their ability to use information, so too do they develop beyond simple data-entry and reporting engines.
Accounting software companies are now openly referring to their programs as operating systems linking business units, people and other software applications together.
At events I have attended in the last six months Xero and MYOB have both described themselves as an operating system for small business. Intuit now refers to itself as a ‘provider of business and financial management solutions’ – but couldn’t that description apply to most of what an accountancy firm does?
If accountants simply adopt these cloud systems without changing and adding to the services they offer, what are they going to do with all the spare time they have? Where else can they add value? Accountants can’t keep billing the clients the same fee – the clients will realise that a lot of the work is being done for them as part of the monthly subscription.
For the moment at least, a monthly subscription to an accountancy software package still requires an accountant or bookkeeper to create system rules, validate, to manage exceptions, to evaluate the results and make recommendations. But for how long? How long will it be before accountancy software ‘helps’ the accountant to the point of actually doing it for them? Where to then?
Accountants need to expand the services they offer, and to start to understand the opportunities that exist in providing expertise and services through third-party cloud apps that connect to core accounting products. This ecosystem of “add-on” programs looks pretty attractive as a source of expertise and billable services for accountants.
The ecosystem of add-ons has grown astronomically over the last 2 years. There are now 350 or so Add-ons hooking into Xero for instance, either offering something that Xero doesn’t, or offering it in a different way.
All told, there is close to $250m being spent annually on development by these add-ons, and that is a huge amount for what are mostly start-ups – companies that did not even exist three years ago. To put that into perspective, its probably the same amount as intuit, Xero and MYOB spend on development collectively.
Smarter software does not begin and end with accounting software. It exists all around it.
A version of this post was originally posted on the Invitbox blog. Roger Gregg is CEO of Invitbox, a cloud service that extracts data from supplier bills to import into accounting systems. Roger has also written about accountants’ future with Tabulator Terminated: Why Machines Will Replace Accountants and Cloud Is Approaching the Tipping Point for Accountants.