Last week Reckon reported revenue of A$100 million, up slightly on last year, and 41 percent of which was recurring revenue from online software.
Despite the healthy financials strategic director Daniel Rabie acknowledged to Digital First that the company is entering a critical period. “We know it’s make or break these next six months to change who we are,” Rabie says.
Reckon hopes the turning point in its transition to the cloud will be the relaunch of Reckon One, its online accounting program. Reckon One was built on a technology called Silverlight which Microsoft abandoned. The rewrite in HTML5 – the default for most web applications – has taken a lot longer than expected.
Rekon is committing to a deadline of June 30 for not just Reckon One 2.0 (code name Evolution) but the launch of an API interface which will allow it to communicate with other web applications.
Also due on that date is a payroll module for Reckon One which will broaden its appeal beyond sole traders. The bank data module, which Rabie admits has “not been up to scratch”, is also being overhauled.
Reckon One is already on sale in Australia and New Zealand, with the projects and time and billing modules generating interest. “No one else has those in the market,” Rabie says.
In its annual presentation Reckon indicated it also has global ambitions, with the UK the first stop for Reckon One.
The company acquired a software provider Linden House which makes document management software for the desktop which is still selling well in the UK, Rabie says. Linden House has a “very strong accounting channel” and Reckon is talking to partners about client side software.
“Cloud adoption is behind in the UK compared with Australia and New Zealand. It’s a good time to come into the market,” Rabie says.
Reckon One’s modular pricing model which starts at A$5 a month will allow it to undercut Xero and others, even those on BankLink. “There are a lot of customers who are too price sensitive for Xero,” Rabie says.
In the meantime Reckon has seen a lot of demand for Reckon Accounts Hosted, driven by partners, Rabie says. The program has grown 10 percent month on month after initial stability issues had been addressed with the launch of version two last year.
“A lot of desktop customers are moving over because of the mobility and real-time consulting with their accountant,” Rabie says. “There is no retraining or importing data.”
Is Reckon concerned about MYOB and other vendors establishing a critical mass before Reckon One hits the market?
We’re aware of competitors but not focused on them. These results prove if we get the customer relationship right we will get a share in the market. We aren’t saying we want 1 million customers or a multi-billion dollar valuation, Rabie says.