MYOB’s big roadshow, with 9,000-plus registrations, has a point to prove. “We have crossed the chasm,” MYOB CEO Tim Reed told 1,000 accountants and bookkeepers in Melbourne’s Crown hotel.
“Three years ago we had not yet taken our flagship SME solution AccountRight into the cloud. Now we are in the cloud across all areas of our business,” Reed said. “Over 67 percent of new registrations are for our cloud-based products.”
MYOB is clearly on a mission to establish itself as the leading cloud accounting player in Australia and New Zealand. In the minds of its partners, their clients and, most importantly, potential investors. Rumours abound about MYOB testing the market for an IPO later this year. A strong front on cloud is pivotal to a valuation above the A$1.2 billion price paid by Bain Capital, its private equity owner.
It’s worth noting that MYOB’s cloud range encompasses quite a few products. MYOB BankLink, the bank-feed service it acquired; MYOB Essentials, the browser-based app that competes directly with Xero; MYOB AccountRight Live (Standard, Plus and Premier), which is a desktop app that saves the company file to the cloud; MYOB Advanced, the cloud ERP; and MYOB Kounta, a cloud-based point-of-sale. MYOB also sells a website builder for small businesses called MYOB Atlas.
The “67 percent of cloud registrations” is just for MYOB Essentials and MYOB AccountRight which have a combined customer base of 116,000, confirms James Scollay, MYOB’s general manager of its business division. MYOB doesn’t break out number of users for Essentials and AccountRight separately.
There were few surprises at the roadshow with almost all the features or products on show announced last year. However, it was clear that this was the first time many of the audience had seen MYOB’s latest R&D and it drew a very positive reaction.
MYOB began the year with the surprise release of MYOB Advanced, a localised rebrand of the powerful and highly customisable cloud ERP platform, Acumatica. This is not the first time that MYOB has licensed a product to sell under its own brand – take last year’s launch of MYOB Kounta.
MYOB Advanced gives MYOB a product to sell to companies that have outgrown MYOB AccountRight Premier and yet is more appealing than the on-premise solution MYOB EXO. MYOB executives said it had generated a lot of interest from partners in the short time it has been released, “which is a great litmus test” for new software.
Add to this the PayGlobal acquisition and it’s evident that MYOB wants to cash in on the “M” on SME it has underserved to date with MYOB EXO.
MYOB is keen to automate the bank reconciliation process. Bank feeds through its BankLink service automate the recording of expenses and sales to bank accounts. MYOB also demoed Smart Bills, a feature released late last year, as a way to automate the accounts payable process.
When a user emails or uploads a PDF invoice from a supplier into MYOB Essentials, the software automatically scans and saves details such as amount, supplier name and ABN. It then creates a draft bill with the original invoice attached. This is a big time saver and generated quite a few murmurs of appreciation in the audience.
As analyst Ben Kepes noticed, MYOB has effectively built Receipt Bank into their accounting software for free. Receipt Bank has more features, of course, but this is just a first release.
Smart Bills is only available in MYOB Essentials and is due to be added to MYOB AccountRight Live later this month.
MYOB is starting to turn out quite a few mobile apps now. The roadshow saw a demo of MYOB PayDirect, a little credit-card reader and smartphone app that lets a business take payments on the road. The demo worked well; it’s a worthy replacement to those bulky POS terminals.
PayDirect will receive an upgrade this year to contactless payments, a great feature worth waiting for. Competitors include mobile apps from banks such ANZ’s FastPay app (no card reader, punch in the numbers on the card) to PayPal’s Here card reader, which is already available in Australia.
MYOB OnTheGo also got a viewing. This app has slightly different features for its kind. You can create and send invoices (that’s pretty standard) but it also has a Take Payments screen for PayDirect. A tradie can create an invoice and get paid at a job within the one app, which is a pretty neat workflow. The payment is automatically applied to the invoice and updated in the general ledger of the online accounting app.
OnTheGo also has a Contacts list. A user can look up a contact’s address on a map, send them an email or give them a call – again, these are standard features for companion apps for online accounting programs but they still got a good reaction.
MYOB’s practice management software has not received as much attention as client accounting software, though this is a pattern repeated across all vendors. MYOB is making amends with an explicit plan to make MYOB the cheapest “cost to serve”, Reed said.
It will take at least two years before MYOB can move all modules in its practice management suites to the cloud (my estimates, probably too conservative). In the meantime it is releasing a web app and mobile app to connect to its server-based practice management software.
The MYOB Portal web app shows the accountant a list of clients online. In the portal the accountant can click on a client to view their cloud accounting file and send them reports to sign electronically.
This is a very neat feature. Not just for the ability to create a report in MYOB Accountants Enterprise and send it through the portal for electronic signing, but because the business owner receives the document on their mobile app.
The owner opens the message from the accountant in the mobile app, views the document and writes a comment (if required), and then “signs” by pressing the Accept button. This digital signature is accepted by the Australian and New Zealand tax departments. It’s a very efficient way to communicate between accountant and client as it eliminates the print, scan, send routine most people use to send signed documents.
Here are some screenshots of the mobile app for MYOB Portal, taken from yesterday’s event. My apologies for the poor quality. (Note the only alternative to MYOB email login is Google+!)
The Portal is still in beta and will be released in early April
won’t be released for several months, MYOB says, but it could be longer. A product manager said MYOB hadn’t worked out whether the mobile app for the business owner should be a separate app on its own or part of the OnTheGo app. “The Portal is to be offered with the ability for accountants and advisers to white label it .We may include some of the collaborative features back into OTG (the OnTheGo app) in the future, but first point of call is a stand-alone web app for accountants to provide to their clients,” Ben Ross, MYOB’s product manager, says.
It is more likely to be a separate app at this stage as it won’t be relevant to Essentials and AccountRight clients whose accountants don’t run on MYOB Accountants Office or Accountants Enterprise.
MYOB is certainly aiming higher with its R&D. Some of the concepts displayed were great, leading CEO Tim Reed to make some very bullish statements on stage about accounting. “People say the cloud will commoditise tax compliance. I disagree. It’s not a threat, but a liberating technology,” Reed says.
In the short term this is undoubtedly true. Smart Bills, BankLink bank feeds and mobile payments mean an accountant can keep their clients’ accounts in much better order, more easily, than before. As long as a firm takes the leap to fixed fees they can use the technology to lower their cost of delivery and run a more profitable business.
But even though accountants can use the cloud to make more money in compliance in the short term, this doesn’t mean that the cloud won’t commoditise compliance in the medium term.
The boom in accounting technology is like a wave; accountants are riding the crest of improved productivity, which feels great and profitability can rise with the wave. When that wave breaks – when automation of compliance reaches a tipping point – the fees accountants can charge today for compliance will evaporate.
The tipping point may come from the Australian Taxation Office which has promised to automate 5 million individual tax returns. It will not stop there.
The question for accountants is, when will that wave break? MYOB is only talking about the wave building, not the breaking. Accountants rejigging their practices for the cloud need to keep a horizon longer than two years to stay competitive.
Managing director Andrew Kristallis of Kristallis Accounting told me yesterday how his practice had successfully transitioned to fixed fees and was taking on more compliance work because it is profitable.
I asked Andrew if he had $100,000 to invest in his business how would he spend it today compared to five years time?
“Today I would get more staff to do compliance work. In five years – I’m not sure, probably virtual CFO or advisory. It’s a scary thought but we would have to change.”
Disclosure: Sholto Macpherson attended the MYOB Roadshow as a guest of MYOB. MYOB paid for flights, one night’s accommodation and transfers.