A very aggressive price, distribution model and philosophy.
On paper Acclipse’s iBizz looks to be a real threat to rising stars Xero and Saasu and even to mainstream vendor MYOB, at least among small business customers. Much of that threat emanates from the man behind iBizz; Mike Chisholm, the CEO of Acclipse, vendor of accounting practice management software.
Chisholm has a long-standing vision and passion for accounting software. He says iBizz represents the fulfilment of a 15-year journey trying to create collaborative accounting – a seamless integration between the software used to run a business and the accounting practice software that measures and reports on it.
“It’s one piece of the puzzle I’ve been working on for years, actually. It was a big day for me yesterday” with the announcement of iBizz, Chisholm told me on Tuesday. In other words, this is not an opportunistic play by an outsider hoping to capitalise on the disruption sweeping the accounting software market.
Chisholm’s philosophy on accounting software is also a threat to established players for the way it reframes the debate.
“Business-centric suppliers – MYOB, Xero and Saasu – in the end haven’t got the passion and vision for developing products that integrate with accountants,” Chisholm said Tuesday.
Barracking on the side of accountants is smart and will encourage accountants to judge cloud accounting software not just on what it offers their clients but on how much better it helps them do their own job.
Chisholm will be in pole position to deliver on this “accountant-centric” philosophy with the imminent release of a cloud version of his accounting practice management software, iFirm. It will be the only cloud option until Xero releases its free competitor, based on recent acquisition WorkFlow Max.
Chisholm has a solid track record. He founded CA Systems, practice management software which he sold to MYOB in 1999 which was rebranded as MYOB Accountants Office. iFirm is his second crack at practice management software and he has been trying to integrate with business-facing cloud software since 2008 – first Xero for two years and then Saasu for two years.
Both attempts failed because neither vendor was committed to his collaborative-accounting vision, Chisholm says, who was so frustrated it pushed him into buying an unknown rival in December that would become iBizz.
And then there’s the price. Acclipse says it will sell the full package for just $5 a month. If a business wants transactions updated automatically it must pay financial data aggregator BankLink for the data charges. Should the price for the software and data fall under $20, as BankLink claims, that’s substantially below the full-featured versions of Saasu and Xero. By comparison an unrestricted account sold by the latter costs $50 per month.
Lastly, but perhaps most importantly, is the “alliance” with BankLink. BankLink’s role is still unclear; although it has no equity in Acclipse or iBizz, iBizz will be sold as a check-box option alongside BankLink’s other services to the aggregator’s 4,500 accounting firm customers.
Those firms service in turn 250,000 small businesses – a huge head start, as Chisholm points out.
If those small businesses are happy to use iBizz without any bank feeds (it’s unknown whether this is possible) it should cost just $5 a month, much cheaper than boxed desktop software from MYOB and Reckon.
That’s iBizz on paper. For the threat to become real iBizz must clear three hurdles.
To be a serious competitor iBizz needs to have a strong set of features. Chisholm has promised that iBizz will be a “full featured” online accounting system that lacks only multi-currency and inventory. Does that mean it will include the ability to produce business activity statements (BAS) and do payroll? Chisholm yesterday hadn’t responded to a request for more details.
The integration with iFirm must be seamless and give accountants something more than what they already get from Saasu and Xero. Xero has strong momentum with more than 60,000 paying business customers and $35 million in capital. It will take something special to slow down that train.
And Acclipse needs to keep the price as low as possible, which ultimately means putting a lid on data charges. Here Acclipse and BankLink differ on how much that might be. Chisholm’s $5 per month estimate is well under BankLink’s figures of $10 to $15 per bank account.
Under questioning BankLink hints that the per-account price for data might be capped at a set number of transactions. The aggregator said in a later interview that any arrangement with iBizz wouldn’t affect the value of its own services which are charged per transaction.
“We see the bundled pricing option (for iBizz) as being applicable to a limited number of SME’s,” BankLink adds. The bundled pricing will be an “option” to standard pricing and would be officially announced soon.
The accounting software market is so volatile that it’s impossible to predict anything other than the end of financial year. Reckon says it plans to launch a cloud accounting program by mid-year optimised for smartphones. This was due to Intuit’s tardiness in selling QuickBooks Online globally, Reckon implied.
But what if Intuit changes its mind and brings out QuickBooks Online to Australia or the faster-growing Mint? Europe has its own crop of competitors too.
One thing is certain. The long-standing accounting software duopoly has been broken thanks to innovation from all quarters. For SMEs and their accountants that can only be a good thing.