Microsoft has thrown its hat in the ring for small business accounting software with the launch last week of Financials for Office 365. The big selling point is its tight integration with the cloud productivity suite Microsoft Office 365. You can read about how the software works, how much it costs and who it’s for in Digital First’s interview with the CEO, John Munnelly.

But what does it look like? Here are a couple of screenshots showing off the latest online accounting program to hit the market. Note that it is built on Microsoft’s Dynamics Online customer database, so if you spot any similarities it’s for a good reason!

Please click photos to enlarge.

 

 

Related: Financials for Office 365: Preview 

A joint project by Microsoft integrator Hands-On Systems and Microsoft launched last week another online accounting package for the small and medium business market.

Financials for Office 365 is built on Microsoft’s customer database Dynamics Online and is tightly connected to the cloud productivity suite Microsoft Office 365.

In terms of price and performance it is closer to JCurve, the SME version of NetSuite. The program is priced per user per month and ranges from $29 for general ledger accounting to $159 for manufacturing and warehouse operations.

I asked John Munnelly, CEO of Hands-On Systems, about the origins and goals of Financials for Office 365.

 

Digital First: How long have you been working on this accounting program?

John Munnelly: The journey started a couple of years ago. We had a discussion with Microsoft corporate about taking a mid-market product and addressing the small business market.

We had to take a mid-market concept, simplify it and put it in the cloud. Microsoft allowed us to use the brand, that was a big thing to get through. We have had some sites using it for 18 months such as a division of Coles, Shorty’s Liquor and the Starlight Foundation.

 

Digital First: This is not Microsoft’s first tilt at selling accounting to the business market, though.

Munnelly: Microsoft tried this a few years go in the US with Small Business Accounting but it didn’t resonate, mainly because it was an on-premise install. The big change is now it’s in the cloud.

Australia was selected as the first test site because it’s a pretty good environment for testing software. Australia already has some really good cloud competitors with Xero and MYOB, so it became a great location. The formal launch last week coincided with the Azure instances (Microsoft’s cloud data centre) launched in Australia.

 

Digital First: Why would someone buy Financials for Office 365?

Munnelly: The difference we bring to market is scale because we’ve essentially taken a mid-market product downstream. We don’t run out of legs like the others do.

Our lite edition costs AU$29 per user a month (maximum three users). It includes accounts receivable and payable, basic inventory, basic contact management, quotes, invoices and basic bank feeds. We will do EFT in and out and the new release in February will add automated feeds with Yodlee.

The standard edition is costs AU$99 per user a month for three to 15 users. It adds inventory control, item management and distribution.

The premium edition is $159 per user a month and runs from 15 to 150 users. You get manufacturing, job costing, and really a complete warehouse system.

You can start at the lite edition and you know that the system is going to scale all the way to 150 users.

 

Digital First: Ok so what does this integration with Office 365 look like?

Munnelly: We work well when a company has Microsoft Office 365 and they need financial software. If you’re looking at a quote a sales person has produced, you can click on their name and call through on Skype for Business (formerly called Lync).

If Skype for Business is integrated with the PBX phone system, you can contact suppliers overseas with a single click from the contact details in Financials for Office 365.

All our document management is stored in Sharepoint Online. We have single click reporting out to Excel Online. There’s lots of tight integration with Office 365 that just makes it an additional module, such as single sign-on.

 

Digital First: How does the document management work? Does that mean you can access files stored in Financials for Office 365 by logging in directly to SharePoint Online?

Munnelly: Yes. You can add files to Financials for Office 365 by adding them to a SharePoint folder. If you receive an order by email you can drag and drop it to your storage in Financials and it’s stored in SharePoint.

Office 365 users can access the documents in SharePoint Online that have been stored with Financials. And you can set permissions to restrict access using library security.

 

Digital First: What other connections to Office 365 are there?

Munnelly: All our business documents are modified in Microsoft Word so you don’t need to be a report writer to edit invoices and quotes and so on. If you want to put “Merry Christmas” on your invoice stationary you make the changes in Word. There’s lots of that type of integration. Excel, Word, SharePoint and Lync are the key functions we integrate.

 

Digital First: SharePoint Online has had a mixed reception among some accountants for being too clunky. What does the interface look like for Financials for Office 365?

Munnelly: We use a third-party template so that it’s more ready for small business.

 

Digital First: What about extending the software through Dynamics CRM. Does it share customer details with Dynamics so you can track prospects, customers and sales?

Munnelly: In the premium edition if you run Dynamics CRM it will sync all the data. That’s a live, real-time, two-way sync. We have customers live using that at the moment.

 

Digital First: How scalable is Financials for Office 365?

Munnelly: Dynamics is used by about a million customers worldwide (online and offline). it’s given us the platform of mid-market software. We know the other guys are furiously trying to build inventory modules but it will take them years to catch up to what we’ve already got.

We have directed ticks and put-aways (warehousing features) – the system will start to tell you where to put products in the warehouse. That database strength is what gives us the ability to scale. If the client wants to upgrade we just change the licence file. It’s all sitting there, it’s just not available.

We don’t have transaction volume limits like some of the smaller products and in-built audit facilities.

 

Digital First: Does it have any features to help accountants?

Munnelly: We give external accountants a free login and a different role centre with information such as fraud detection. We can identify whether individuals are changing bank account details right before they make payments.

The accountant’s centre also has Pareto analysis to understand the weighting of clients and the risk in the business. Our goal in the February release is to bring out the accountant role centre and enhance the insight an accountant can provide to their customers. It’s not the sort of information that an end user will get value on their own. They need the acct to understand it.

 

Digital First: Were you waiting for Microsoft to open an Australian branch of its cloud data centre Azure before launching? Do you think that will make a big difference?

Munnelly: To date we’ve been working out of the Singapore and Hong Kong (Azure) data centres. The big benefit now is that Australian customers have their data in Australia protected by Australian laws. When you compare speeds and latency to NetSuite, which uses data centres in the US, the speed is amazing.

 

Digital First: Do you just have a licence for Australia and New Zealand?

Munnelly: No, we have a global licence. We are now launching it in New Zealand and the Philippines. We are starting in Australia on the basis that we wanted to get Australia right first. We’re comfortable that the technology is working well and then we’ll go Asia, Europe and the US.