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FYI Docs Pitches “Zapier for Firms” Platform for Multi-App Automation

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Automation is all the rage in small business accounting software. How come automation in practice management software has moved so much slower?

“It’s almost (worthy of) a detective story,” says Rob Cameron, CEO of FYI Docs, a new practice management software. “A VC asked me, ‘Why hasn’t someone done this already?’ It’s because you’re dealing with unstructured information.”

Compliance requires sourcing many types of documents from different areas, often requiring clients to fetch themselves. On the other end, firms can slow down jobs by moving them through various levels of approval. In smaller firms, the work of managing documents, jobs, emails and billing occurs across multiple systems. Automating tasks across those systems hasn’t been possible.

This is why the average job to complete a tax return is still about 23 hours, according to FYI Docs’ research.

Cameron saw the potential of using an integration platform such as Zapier to trigger tasks across multiple applications. FYI’s goal is to use scripts running over several apps to reduce that compliance window to 11 minutes.

This involves using algorithms to identify the content of emails, to systematically create, name and store reports and other documents, and to move and assign tasks between staff and projects.  

FYI Docs squarely competes with Karbon, a similar concept and tool co-founded by three former Xero executives, Stuart McLeod, Ian Vacin and John Freeman. The differences appear to be FYI Docs’ singular focus on becoming an open process automation platform that moves client data between an array of applications (like Zapier). Karbon has approached the same problem as one of communication and customer relationship management (CRM).

(Another factor which could have as much impact on growth as product design: Xero shut out Karbon from sharing data with any of its practice tools due to a falling out with management.)

 

How does FYI work?

FYI automates the capture, filing and processing of source documents to support accounting and tax. Here’s an example of one of its automated workflows working across multiple apps:

  • Identify key documents required to complete a workpaper
  • Find the documents in a client’s HubDocs account
  • Import, file and name the documents following practice-wide rules
  • Update the associated workpaper with cross links to the source documents
  • Compare and validate the amounts in the workpaper

Cameron says the firm has automated 30 processes and has a long roadmap of many more. “We have 12 months of glorious process automation coming up,” he says. The completed processes include monthly billing, onboarding clients, ASIC payments, annual statements and tax assessments.

For the latter, FYI contacts ATO for a tax assessment, checks it with Xero Tax to see that it agrees, then brings it with the resulting file and metadata into FYI. It then creates a templated email to send to the client.

FYI can run custom processes across Xero (blue client file) such as running a defined set of reports to support Xero Workpapers. The reports are saved in the customer file in FYI as links to Xero.

FYI can automatically capture documents from Dropbox, Google Drive or Microsoft OneDrive and file them in FYI, eliminating the client request goose chase. All activity in FYI is tracked in an audit log.

A slightly more unusual automation identifies negative sentiment in client emails. If a client complains to an accountant about fees or quality of service, FYI will instantly notify the partner.

“The interesting observation is how much the world has moved onto emails, and how they’re all sitting in everyone’s inbox and unstructured,” Cameron says. “They are a very rich source of information but also a risk as well,” he adds, referring to Australia’s recent royal commission into banking.

FYI has been designed specifically for firms running on Xero Practice Manager and brings together document management and CRM, and process automation. The platform is not a standalone practice management solution, or at least not yet.

Xero Practice Manager handles all the task management, time and billing. Xero also acts as a central database for clients and staff. To technologists, Cameron explains FYI as a combination of Microsoft Office 365, (document management), Hubspot (CRM), Asana (task manager), and Zapier (process automation.

The open-door policy with Xero has made it possible to deeply integrate the products. Instead of storing a PDF from Xero Workpapers in the FYI Docs client file it stores a cross-link that opens up the document in Workpapers. (Tasks don’t flow from FYI to Xero Practice Manager – yet.)

 

A strong history – with the competition

“This is the fourth time that I’ve built this product,” Cameron says. In 2006 Cameron sold a document management solution to MYOB called Level 31 which helped accountants move to a paperless office. That took seven years to build and sell (starting from 1999).

Cameron stayed on for five years as MYOB’s global head of product strategy for accountants. He then left and built the management accounting tool Dovetail, “a combination of bookkeeping and virtual CFO”, which he sold to MYOB just two years later in March 2014.

Then followed his second stint at MYOB as platform strategy manager for the company’s Accountants in Practice division.

A chartered accountant for 20 years and a successful software entrepreneur twice over to MYOB. Why shift to its biggest competitor?

“I was inspired by the Xero story,” Cameron says, citing its launch from Wellington, New Zealand into a billion-dollar powerhouse with a global footprint in just 12 years.

It’s also clear that a good dose of pragmatism helped Cameron decide to focus exclusively on one accounting platform, and why this time he chose Xero and not MYOB.  

“When you work with a single platform your ability to onboard goes through the roof. Rather than doing all (practice management solutions) and having a crappy user experience across all of them,” Cameron says.

As one of the first to market with cloud-based practice management software and the first to make it free, Xero swallowed a good chunk of firms in two key categories; early adopters and small to medium practices. These don’t pay as much for practice software as the larger firms on MYOB Accountants Enterprise. But it is easier for smaller or more entrepreneurial firms to switch to new products and they are more open to trying new things.

FYI Docs includes features such as an approvals process and customisation through extra fields to handle large firms with multiple offices and many partners. But Cameron is not keen to sell to them. “I don’t enjoy working with them that much. Their decision time frames are ridiculous,” Cameron says. “We are going after 50 seats. We’re not going after the multinationals.”

According to Cameron, Xero is investing time and resources in helping Cameron bring FYI Docs to market as quickly as possible. Cameron has had deep access to developer teams working on the practice management tools including Xero Tax and Workpapers as well as Xero Practice Manager.

Xero’s vision and delivery for practice management has been spotty over the past three years. It has launched excellent ideas such as Xero HQ. But it has failed on more pressing stuff such as better integration between Xero Workpapers and Xero Practice Manager, both acquisitions. Firms don’t pay directly for Xero’s practice management software so it’s not surprising that their development is not a priority. Is Xero supporting FYI Docs because it is doing what Xero could never afford to build itself?

FYI Docs will be at Accounting Business Expo 2019 at Darling Harbour, Sydney, on March 20-21. You can register for a free ticket here.

Rob Cameron is presenting two session at the expo, details below.

  • Tuesday 11:50am – 12:20pm

Why Process Automation is the Killer App for Faster Compliance

  • Wednesday 10:05am – 10:35 am

Cloud document management – finally a solution that doesn’t ask your practice to compromise

Image credit: FYI Docs

MYOB Doubles Down on Supplier Feeds: Accountech.Live 18

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Banks feeds were the killer feature that fuelled the rapid rise of cloud accounting software. But the bank rec is not fully automated yet. MYOB says it knows what will take it another big step closer – detailed supplier feeds.

MYOB is investing in higher quality, direct feeds to plumbing distributors Reece and TradeLink and office king OfficeWorks, with line item detail flowing directly into AccountRight and Essentials.

The idea is to create a “holistic” approach to expense management, says MYOB product manager Dale Dixon.  

“We found that customers struggled to keep track of expenses on the job,” Dixon said. “The Reece integration brings in the (item) lines of what they purchased and also allocates to the job in the system.”

MYOB AccountRight can switch on tracking for reimbursables in each job. Tradies give a purchase order number at the point of sale which is added to the invoice. Then when the tradie invoices the customer the software automatically adds a selection or all expenses.

“In the past you got your paper copy of your statement and worked out which ones you have invoices for that work. Now you can integrate it end to end,” Dixon says.

MYOB is not the first to add feeds to major suppliers (Xero has OfficeWorks and Reece already) but it is the first to add line item detail. This one change will make a huge difference to the speed of bank reconciliation, says Dixon.

“We are working with a bunch of suppliers to automate those feeds. It’s not just about getting the bill in the system, it’s about automating the workflow,” Dixon adds.

The supplier feeds are one part of MYOB’s push to improve data processing. It has also switched from billsapp@myob.com.au to a unique email address for forwarding invoices to an “in tray”, similar to Xero’s Inbox.

Now a company can hand out the unique email to suppliers so they can send bills directly to the accounting software, or multiple staff within a company can forward invoices they have received.

MYOB Essentials can also store receipts as well as bills by attaching them to transactions in the bank reconciliation screen, Dixon says.

You can hear more about MYOB’s plans at Accountech.Live, November 13-14 at the Melbourne Convention and Exhibition Centre. Register for free now.

 

Session: The next killer feature in accounting? Holistic expense management

Presenter: Simon Dennis, head of partnerships at MYOB

When: 10:05am – 10:35am, Tuesday 13 November

 

Image credit: MYOB

GreatSoft Brings A Cloud Practice Suite for Big Firms to Australia

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MYOB’s attempted purchase of Reckon APS at the beginning of this year – and its knockdown by the regulator – unearthed some pretty frank statements about the technology roadmaps for the two software companies.
Reckon’s main explanation as to why the combined entity wouldn’t be anti-competitive was that it was so far behind on its cloud strategy and couldn’t afford the investment required to catch up. Reckon has since reversed that position and says it is going full steam ahead. But the moment of candour has drawn the first major competitor to Australia (and it may not be the last).
GreatSoft is a cloud practice management suite born in South Africa from the original Sol6 software. Unlike Sol6, which has evolved into MYOB Accountants Enterprise in Australia, GreatSoft is 100% in the cloud. It is used by many large accounting firms, including three of the Big Four in South Africa.
GreatSoft has made a soft landing in Australia – targeting the MYOB and Reckon APS firms that were alarmed by the statements and reversals in the past 12 months. It has made contact with all the major accounting software companies and is busily connecting to popular practice management and tax compliance tools in Australia.
Worryingly for Reckon, the Australian managing director is one of the founders of APS and former manager of Reckon’s own accounting division, Brian Armstrong.
In his first interview as managing director for GreatSoft Australia, Armstrong reveals his plans for taking on Reckon and MYOB on home ground.

 

Digital First: So who is Brian Armstrong?

Armstrong: I was originally the owner and operator of Sol6 in South Africa. I then ran Sol6 Europe with Brian Coventry, then ran international operations from Australia. I then broke away and was one of the four founders of APS in 1997 and was CEO until its sale to Reckon in 2004. I ran Reckon’s accounting division until 2011. Since then I have been doing business consulting and in the last couple of years working with GreatSoft on their international plans.

Digital First: What is your relationship with Reckon these days?

Armstrong: Since leaving Reckon I have had nothing to do with them in anyway.

Digital First: Why?

Armstrong: No real reason. My time was up and it was the end of the road. They had never engaged with me in any way and I had no need to engage with them.

Digital First: What’s your relationship with GreatSoft?

Armstrong: The guys at GreatSoft I’ve known for 25 years or more. Bruce (Morgan, CEO) and Imtiaz (Lorgat, CTO) were part of Sol6 operation, they ran Cape Town. We did a back-to-back deal and Bruce and Imtiaz bought it out from me.

Digital First: Why are you getting back into the software game?

Armstrong: That’s a very good question. When I got out of it (and left Reckon) I said, ‘That’s me done’. I’ve been doing it all my life. There is a great opportunity and we’re aware of the challenges of coming to the market.
But as we look at more recent times and the announcements of MYOB and Reckon that they don’t have a cloud solution at this time… We feel that the timing is right.
We have talked to cloud (accounting software) providers and have been really surprised about how many are keen to work with us, in compliance and productivity tools. They have difficulty integrating with the legacy suites of APS and MYOB and they are locked out of that world. They see it as a great opportunity for themselves and we see it as a great solution for accounting firms that is really advanced and gives some freedom of choice with what they use. The closed world is a thing of the past.

Digital First: Practice management is a tough game with bigger firms. Glacial sales cycles, complex deliveries. Are you up for it?

Armstrong: It’s a sweet spot for GreatSoft. It is a more difficult delivery model, with more intensive support and reporting requirements. The company has had a lot of experience there. We have had a lot of people who have worked in multi-partner, multi-office and multi-service lines.
The timing is really a combination of three things – the product is there now and the openness of other providers to work with us and the fact that we think the incumbents are a fair way off bringing something to the market. And I saw that as an opportunity to help the guys with their expansion plans.

Digital First: What are the expansion plans? What are you thinking?

Armstrong: We had a stand at the Accounting Business Expo (before we started selling here) because we wanted to gauge interest. I guess I wanted to know how many firms were open to exploring the idea. We had a lot of interactions with a number of firms and it gave us encouragement that they want to find a viable replacement.
GreatSoft is not APS in the cloud – there are differences, but there are also similarities. It is scalable, it has been designed for larger firms, and that feedback has been great to get from the firms. We have been talking to a lot of firms about integrations and doing some proofs of concept and looking at database conversions. We have done it with APS and MYOB clients. That’s been quite a win for firms to see that yes, it can be done.

Digital First: So what happens next?

Armstrong: Now we have to get those integrations completed as soon as we possibly can. That’s going to take real effort in the next couple of months. We want to see the applications working and single client showing all the data from disparate systems.
We have legs on the ground – a business development guy Daniel Fourie and Imtiaz is here talking to firms. We are just visiting firms and talking them through what we can do and a lot of them are really interested and saying, ‘Show us what you’ve got’.

Digital First: Which integrations do you have and which are you working on?

Armstrong: There are so many – superannuation, tax, compliance, document management, and accounting applications. We are probably working with at least 8.

Armstrong: It is complex at the moment. We have concluded business discussions with all the vendors we need integrations with.

[Updated with comments from Imtius Lograt, GreatSoft CTO: Some integrations have started – BGL, NowInfinity. Nimbus has completed and iManage has started. Xero is agreed but not started yet. There are a host of others – payment providers, debtor management (QuickFee, FeeSynergy, Apxium) – at the moment my priorities are determined by the firms we are in engagements with.
Quite a few of the vendors are happy to be part of an ecosystem including GreatSoft. We have met with 20 firms of decent size, and everybody wants in on this concept of choosing their solution platforms.]

Digital First: Which integrations do you have with accounting software?

Armstrong: Xero is a key one for us from a tax perspective. We are looking to deepen that partnership – they have a similar strategy with a connected practice and integration points with other providers. We are exactly the same (in philosophy) in the practice management space.

Digital First: Do you have your first customer in Australia? I heard you were close with one firm.

Armstrong: No, we haven’t signed them. We have done a proof-of-concept and a database conversion. We want to go about this in a slow, conservative way and not get ahead of ourselves. These integrations are a key piece for most of these firms. They say, ‘We hear you, show us’. That’s why we need to do the work.

Digital First: You mentioned a single view of the client? How does that work in South Africa?

Armstrong: We want to give the experience that when you view the client you’re getting a full view of all the information associated with the client. Not just practice management but tax, company secretarial information, superannuation, accounting – all that needs to be available and rendered in the client view.
In South Africa that’s what exists because all those applications are managed and owned by GreatSoft. There’s a lot of merit in an integrated strategy and it’s one I personally think that if you have an integrated view of the client there’s a significant benefit.
But that’s contingent on all those applications being state of the art. If you’re in the situation where they are falling behind, you will have integration (with a suite approach) but not the best applications for each function. Instead of trying to develop each of those themselves we are selecting the best in class. You would go into the client console and see all the data from disparate applications and databases. That gets more complicated as you go across multiple offices.

Digital First: What state is the API? Have heard that it’s not where it needs to be?

Armstrong: With one of the (software) providers the developers worked together for a couple of days and got it completed. It comes down to which providers are open and willing to work with us. There are different levels of API and integration. And giving these guys surety that we are working with them and not sharing data.
There seems to be a lot of distrust about sharing data or knowhow and using it elsewhere. You do need to be open and transparent with all the providers and the data flows that you need, and that’s only in the relationship with that provider and not with everyone else. And so we’re very respectful of that and the NDAs that we have in place.
We are making very, very fast progress – I’ve been surprised at the pace of progress today. I didn’t think we would get this far in this amount of time.

Armstrong: Our strategy around this open platform is the key for us. We have to maintain that open stance and I think that really is important for these firms that they have this freedom of choice that they have been lacking for some time now. I believe that we can move quickly on that and it does give us an opportunity. Developing cloud solutions is not insignificant and particularly when you’ve got a broad base of apps to move forward. We need to take advantage of that when it’s available. I do know it’ takes a lot longer than some of the timelines that I’ve heard.

Digital First: What functions does GreatSoft cover?

Armstrong: We cover the full gambit from time billing, time capture, expense capture, workflow, business process automation, and business intelligence reporting (on time, fees and billing). Everything that’s required to run the practice from an internal management perspective.

Digital First: Why would you not build a suite in Australia like you did in South Africa?

Armstrong: It largely comes down to the extent of the relationships with other providers and making sure that the integrations are seamless and elegant. If they are clunky people won’t want to go there. If you have these strong relationships then you are best in class. It doesn’t make sense to make a tax app unless you’re forced to go down that path.

Digital First: I know you do a lot with large firms, but what is the smallest firm in South Africa using GreatSoft?

Armstrong: In South Africa they have sole practitioners using it. But the more relevant example would be three of the Big Four are using it for practice management and for other modules as well. A lot of the second tier firms are using it too.

Digital First: How much will it cost?

Armstrong: For the practice management suite it’s going to be in the order of $50 per month for practice management and $60 per user per month with the business intelligence tool for reporting. It is a lot less than the incumbents and I think we have to go in aggressively to start with and give early adopters some keen pricing initially. All up we are going to be competitive.

CCH Opens iFirm to Xero Tax, MYOB and Microsoft Power BI

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In a sign of the times, CCH iFirm is adding connections to other vendors’ accounting software in a bid to improve efficiency for accounting firms. While accounting software for SMEs has long used API connections to integrate with hundreds of other business apps, practice software has tended to stay within its walled garden.   

Xero and then Intuit were the first to open up their free practice management tools to third-party apps for notifications. But both tools are only suitable for very small firms. In Australia, iFirm is the cloud suite with the most potential to fit firms with hundreds of employees.   

It’s a great move by Wolters Kluwer and one that couldn’t have come at a better time.

The dramatic statements revealed during MYOB’s aborted acquisition of Reckon APS showed that the two companies are years away from developing a full-blown cloud practice suite.

CCH iFirm, made by Wolters Kluwer, positions itself as next-in-line for the throne. It includes an online tax module, which neither MYOB nor Reckon have matched.

However, iFirm has lacked a major drawcard – a tightly integrated, cloud accounting app for SMEs. Xero’s rapid accumulation of market share has encouraged firms to consider the free Xero Practice Manager before iFirm. The software company could capitalise on this winning streak by expanding its practice tools to firms of all sizes – but it’s not interested.

Xero stated to the Australian Competition and Consumer Commission that it didn’t want to invest in making software for firms with more than 20 staff.

There are two interesting aspects to this development. How deeply is Xero prepared to integrate with iFirm? Initially the connection is just to Xero Tax; will it eventually connect client files to another vendor’s practice suite?

And then there’s the Microsoft Power BI integration. What exactly can you do with a BI tool when it is natively integrated with your practice software?

In this edited transcript, Russell Evans (CEO of Wolters Kluwer Asia Pacific) and Daniel Wyner (regional director) give a frank assessment of the market and where they intend to take integrations for iFirm.

Jump to:

Integrations with Xero

Russell Evans: What we’re hearing from particularly small and medium sized firms is that they’re looking for real efficiency gains in workflow. Let’s assume (firms are) moving toward fixed price engagements, if you’re only getting two and a half thousand for a job that you used to get 4000 for, that’s all about hours on the job. Now, given that Xero have captured a good slice of the market in the small and medium firms with their tax product, it makes sense for us to support our clients who want end-to-end efficiency. Xero Ledger into Xero Tax and running the job on iFirm practice management.  We’re just starting to do that now. Initial indications are it’s going to be a winner for the market and therefore good for us.

Digital First: What exactly are you launching?

Daniel Wyner: Effectively it is an API connection. From within iFirm’s practice management screen, you will see the client database from Xero Tax. You can also launch that client’s tax return from within iFirm’s practice management screen. It will also show the relevant meta tax to say that a return has either been filed or lodged, signed, etc. You don’t want to be flicking between different products to see the status of what’s going on, so we’ve managed that workflow entirely within iFirm’s practice management solution.

Digital First: That sounds great.

Daniel Wyner: You can assign your staff to whoever needs to do the job, add all the necessary checklist programmes, procedures, jump out to Xero Tax and do your tax return by launching it from within CCH iFirm. That’s phase one. Phase two, which will come Q4 in Q1 next year, will be adding CCH iQ to Xero Tax. The myth that “I need to be with one provider” from the desktop days has been blown away. We want to facilitate whatever the practices want to do.

Digital First: Will there be deep links from workflow screens in iFirm to the Xero client files themselves?

Daniel Wyner: Just Xero tax.

Digital First: Do you think you’ll get to a point where you have deep links to say, Xero, QBO, MYOB? If you click on the file and just open that client’s cloud files – is that the vision?

Daniel Wyner: I think anything is possible. It comes down to us proving out that this is the right workflow and that value proposition. There’s no reason why we wouldn’t.

Russell Evans: It also comes back to the use case. There’s a lot of collaboration at the moment between the accountant and the general ledger. Rather than waiting for the end of the year to do the adjustments in June or waiting for a tax trigger, accountants are using it on a monthly basis.

When MYOB come to market with a cloud tax product, and accountants want an end to end MYOB ledger and MYOB Tax plugging into iFirm practice manager, if our clients start banging on the door and saying “We want to operate support in that open environment,” we’d absolutely be behind that as well.

Digital First: What’s the reason for not pushing the Xero integration globally? Is that an internal decision as opposed to a technical one?

Daniel Wyner: We’ve only focused our discussions with Xero locally and therefore it’s really been focused on the Australian market.

Russell Evans: I think it’s also a maturity curve decision as well. Look at the proportion of small businesses that have made the shift into a cloud based accounting application. Australia and New Zealand are a long way ahead of other markets, so therefore the customers that we’ve been engaging with have been far more vocal about that desire to work in an open environment, to be able to plug in different applications for greater efficiency.

Russell Evans: There is an intensity in our conversations (with firms). This is a kind of anecdotal number, 60% of accountants have a copy of the Australian master tax guide on their desk. Over the last six years we’ve had a very strong focus on digitising the master tax guide and getting it into the market and we’ve done that with CCH iKnow. Last year we plugged iKnow into Xero Tax. Our quest is really to provide accounting firms across the region with a digital experience. Plugging into providers like Xero makes sense for us because then we’re still relevant to accountants.

Digital First: What were the engagement stats like for iKnow with Xero Tax? That integration has been out about a year?

Daniel Wyner: I don’t know the numbers off the top of my head, but a significant number of firms have signed up to either a paid subscription or a premium offer. It’s well over the hundred mark. The next phase is making it far more actionable. That’s where IQ comes into the piece.

Digital First: You’re saying 100 firms? That doesn’t seem like a lot –

Daniel Wyner: It’s in the hundreds, I just don’t know.

Digital First: Okay. Enough proof to turn around and invest more in integrating CCH iFirm more closely with Xero. Are you intending to do that with any of the other products, like QuickBooks Online?

Daniel Wyner: Yes. We’ve had conversations with multiple providers about where we could look at that. Say accountants (use iFirm and) run their books on Xero or QuickBooks. At the moment you can run (your firm on iFirm and use Xero for the firm’s accounts). That integration’s been there since well before we acquired iFirm because of the old days of Acclipse and Xero starting out together.

Digital First: Clearly there’s overlap here between Xero Practice Manager and iFirm. What size firms are you targeting?

Daniel Wyner: When you’re over five staff, firms have a willingness to spend a little bit more money because they know that it’ll be something a little more sophisticated. Up to that 50 user mark, the politics within a firm, the number of partners and so forth, it’s an easy decision making circle. They can drive the change management. Changing the practice management solution, which is at the heart of a firm, it’s no small undertaking at all. Our data historically have suggested firms stay on a solution for about eight to ten years because they don’t want to go through that change management.

 

Azure Migration and Stability Issues

 

Digital First: I did hear some stability issues with iFirm over the past 12 months. I was wondering what the story was with that and if it’s been resolved.

Russell Evans: Yes. So in July last year we moved from our own data centres into the Microsoft Azure environment. We did a huge amount of pre-planning around that and we thought we’d anticipated everything. But some part of the transition didn’t go according to plan and as a result some customers experienced latency issues and performance issues. We’ve thrown everything at that and we’ve now stabilised that platform.

Digital First: Okay.

Russell Evans: And look, we’ve been very open with our customers. We’ve understood the frustration that’s caused to them. We’re past that now.

Digital First: Why did you move to Azure?

Daniel Wyner: It’s as much about scalability as different times of the year. In peak tax periods we have to scale the service up and down. We needed to have more of that flexibility Azure can give us. There are global Azure support teams that now manage “around the sun” everything that goes on on that platform. The relationships we have with Microsoft and to leverage that platform enables us to do some really great things for the client.

 

Power BI and Deeper Reporting

 

Digital First: Like what?

Daniel Wyner: One of the things that we’re focusing on for the back half of this year would be really tight integration with Microsoft Power BI over practice management data. Now that we’re in the Azure environment we can leverage off their technology stack. Microsoft is spending millions of dollars on making that a great tool that allows you to plan utilisation. Why would we waste our time trying to compete with that?

The biggest reason why bigger firms hold back (from moving to iFirm) is that they’re used to having the flexibility of slicing and dicing the data.

If you look at the legacy platforms they’ve got that ability to pull their own reports. We haven’t gone down that path until now. We give firms the ability to export data as and when required, but with (Power BI they can) work out how they want to build their own dashboard.

Digital First: When will this Power BI integration be ready?

Russell Evans: In Q4.

Daniel Wyner: Yes – that’s Power BI connecting to the practice management dataset, not to build it out for their clients’ data.

Digital First: What can you do with it?

Daniel Wyner: I can dig in to see the types of jobs that make me more profit, and the ability to manage workflow. The bigger firms are wanting to manage their staff more around KPI management. Power BI can give them a custom report about how they want to run their businesses.

Digital First: What’s the largest firm on iFirm?

Daniel Wyner: I think it’s about 160 users.

Digital First: Okay. Would you go bigger than that?

Daniel Wyner: At the moment, probably not.

Digital First: Why?

Daniel Wyner: The main reason would be that reporting.

Russell Evans: The more complex firms need to slice and dice their performance by partner, by director, by manager, by team member across different lines of business. At the moment iFirm isn’t designed to do that. By Q4 we’ll be able to support that.

Digital First: Will you launch a marketing campaign to sell iFirm to larger firms?

Russell Evans: Yeah, and look, I think we’ll be very successful demonstrating tangible business benefits in the connection with Xero. Then if we see the opportunity to roll out the Microsoft BI platform with a really strong offering for those firms with 100 to 300 staff, there’s nothing to stop us moving to that space.

 

MYOB, CCH iQ and Document Management in the Cloud

 

Digital First: What other integrations are you working on with competitors?

Daniel Wyner: Firms are saying to us CCH iQ’s great but to change their tax product is not a small undertaking, in particular for some of these bigger firms. So we’ve rolled out integration of the iQ functionality into the MYOB Accountants Enterprise database. Every time you lodge a tax return it is populated into the iQ database. We’re seeing some really nice results. Firms can move into compliance advisory without having to lift up their entire tax process onto a new platform.

Another thing we rolled out right at the beginning of this year which has taken off better than we initially thought is a cloud-based document management solution on Office 365, tightly integrated into iFirm as well.

Digital First: Has it done well?

Russell Evans: Can’t give you customer numbers, but I will tell you it’s going gangbusters. It has really exceeded our expectations.

Digital First: Why do you think that is?

Daniel Wyner: I don’t believe there has been a credible, fully functional cloud solution. MYOB document management solution had the full Sequel type functionality that depended on the way that you viewed it, it’s got folder structure and so forth. That functionality has not been available in the cloud until more recently. And there is the adoption of Office 365 by more and more firms. You have tight integration with email management and link all your emails to the relevant clients, with filtering and full mail merge functionality so that your engagement letters are automatically captured and sent out the right way.

Digital First: Would you say you have reached feature parity with MYOB Accountants Enterprise or Reckon APS yet? If not now, when?

Daniel Wyner: I don’t know that we’ll ever have feature parity because just replacing what is currently there on desktop is not the smart way of doing it. We want to look at what’s available and what the user needs and how we can facilitate a quicker outcome.

We can say, “You may be used to clicking these three times to get this type of report, but why do you need that report? You can make the same decision with a dashboard.”

Digital First: It is more use-case parity, isn’t it?

Daniel Wyner: Yes, that’s right.

Image Credit: Printable Party Kits

Hey Mid-Market, Xero and Intuit are coming!

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It’s time the mid-market accounting software companies woke up and realised it is 2018 – and that there is a once-in-a-lifetime opportunity lying right in front of them.

In Australia, MYOB has decided not to add the government-mandated Single Touch Payroll service to MYOB Premier, the accounting software which holds as much as half the market (by my estimate) for companies over 20 employees.

And yet none of the mid-market software companies are in a position to genuinely capitalise because they aren’t even competitive with the likes of Xero and Intuit!

Where are the bank feeds? How about a solid ecosystem of best of breed add-ons? How about AI and machine learning? How about a modern, mobile optimised user interface with decent user experience design?

Why are these the domain of small business systems such as Xero and QuickBooks Online at one end and corporate solutions like Workday at the other? What happened in the middle?

A recent experience with a client really got my goat and compelled me to speak out.

First, some background. I’ve spent the past 18 years working in mid-market accounting and payroll software.

I have recommended and personally run implementations for literally hundreds of accounting and payroll system projects for mid-sized clients through a couple of consulting businesses I have owned. I’ve been a shareholder and General Manager of a “leading” mid-market vendor.

I’m no-longer young enough to think I know everything but am forthright enough to retain an opinion built on experience.

 

What is the mid-market?

Government agencies calculate there are 50,000 businesses in Australia with more than 20 and generally less than 200 staff, let’s say 60,000 if you include New Zealand. Typically, turnover is north of $3 million and they have three or more users of the core business system (industry dependent)

MYOB own this market. Not because they have white-labeled Acumatica (as MYOB Advanced) or acquired Exo, Greentree, Pay Global, Commac, IMS, etc. My research suggests that perhaps as much as half of these organisations still use MYOB (AccountRight) Premier Desktop (v19).

This is reflective of the low penetration of cloud accounting software in this demographic. While small and micro businesses have adopted cloud software en masse, mid-sized business – constrained by choice, fear and cost of change, sunk-cost fallacy, “functional parity” concerns and a dearth of quality advice – have remained tied to ageing software.Outside MYOB, my estimate is that no one company owns more than 10 percent market share. 

The above graphic is a rough, historically segmented view of the accounting technology industry across Australia and New Zealand according to target market.

Reckon and Xero would certainly claim a fair stake in the mid-market, although few would acknowledge them as mid-market players.

Other software companies in this market include big international players (like Microsoft, Sage and NetSuite) and established/mature local players (like Attaché, Pronto etc).

There are levels within the mid-market. Pronto and Sage X3 are targeting very different price and functionality points to the likes of Attaché or (NetSuite) JCurve.

Most of these software companies would tell you that their primary source of customers for the past two decades were conversions from MYOB Premier or the old QuickBooks software sold by Reckon.

 

Setting the scene

Today’s story begins with a phone call from a former colleague. She wanted to validate the decision by her current employer, a not-for-profit, to move from Sage Timberline (aka Sage 300 Construction & Real Estate) to MYOB Exo.

My response was simply, “Why on earth would you be looking at Exo over MYOB Advanced?”

To the chagrin of the Exo partners out there I generally would not recommend someone implementing Exo in 2018. Happy to debate it with anyone, but the fact MYOB themselves use referrals to MYOB Advanced + People towards accreditation BUT NOT Exo (nor Greentree, nor Pay Global) speaks volumes as to where MYOB see their mid-market future.

A few months down the track the same colleague calls asking me to validate the decision to go with MYOB Advanced + People. I took them through my five-step process for choosing and implementing the right Accounting Tech: here’s a summary of the methodology.

They were already effectively at “Step 4: Make a decision and commit to making it work” and very keen to not waste any more time revisiting research and outlining problems. They were hoping I would just say, “Yep, go for it, that’s the right investment decision!”

I asked about their current state, desired state, non-negotiables, important and nice-to-haves, and came up these core requirements.

 

The core requirements

Here’s the summary.

  • A mid-sized NFP with a seasonal, casual workforce, that needs a decent payroll engine.
  • They needed reporting against Budget and Actual by “job/project/event/segment” (whatever term you want to use)
  • Moderate, seasonal transaction volumes
  • There were 4 accounts and payroll staff on the existing accounting tech and 20-odd staff on the customised procurement system.

My advice

I’m not sure MYOB Advanced is the right investment. What it offers in terms of grunt and flexibility is offset by the fact it is comparatively harder to use than SMB accounting software. It lacks bank feeds (despite MYOB owning BankLink, what the??) and don’t get me started on the payroll solution MYOB People. Timesheet costing doesn’t even flow through the accounting system and reporting…

MYOB Advanced is also a significant investment for an NFP.

I followed up with this question: “What are your thoughts on the likes of Xero and QBO?”

The answer: “They are small business solutions aren’t they? At that price point, we didn’t even look at them.”

This is a fair and common response. In life, price frames quality perception. In business tech, price is often perceived as proportional to flexibility and capability, which to be fair has often been right.

The cloud has fundamentally changed this value equation. Don’t confuse SME desktop accounting software with modern cloud platforms. It is like framing what a computer and a printer can do based on your experience with a typewriter. Yes they can output a page of prose, but if you think of a computer in terms of being limited to typing out and printing text you are missing the point.

Such is small business accounting tech when it comes to the cloud versus desktop software. Modern small business cloud platforms like Xero, QBO and even MYOB Essentials are built very differently to MYOB Premier (with a code base that dates back to Macintosh computing in 1982) or QuickBooks Desktop (its roots date back to DOS in 1983 and Quicken).

Technology has changed. Limitations aren’t what they used to be.

 

My Recommendation

A small business platform like Xero or QBO + add-ons (KeyPay + ApprovalMax) would not only be far more cost effective solution but I believe a better solution, one that is far more user friendly and with functionality such as bank feeds, a better payroll and workflow engine. It would be far more suitable than MYOB Advanced and mid-market alternatives for this organisation.

The NGO still couldn’t believe that for a fraction of the licensing and implementation cost they could get a system that met their needs, let alone a better system.

So I arranged an end to end demo using their data. And the rest is history. But it’s not the end of the story.

The client informed the competing MYOB reseller of their decision. Back came a response listing seven reasons why my recommendation wouldn’t work.

And this is where I get exasperated!

Why is the same drivel I was using 10-15 years ago to convert MYOB Premier and QuickBooks (Reckon) desktop customers being trotted out in relation to Xero and QBO?

I urge everyone do the research. Don’t believe the salesperson’s falsehoods.

Here are the seven claims and the facts that refute them in 2018:

 

Claim 1: Transaction volumes

Claim: “These smaller systems are just not designed for high transaction volumes.”

The facts: While Xero do give transaction limits, these limits are far greater than the client’s current and projected volume. Anyway, Intuit do not have transaction limits with QBO (explained here).

 

Claim 2: PO Authorisation

Claim: “SMB accounting software is unlikely that you will be able to integrate a system like your procurement system or any other systems that may come along.”

The facts: Really?? They clearly do not understand modern APIs and how easy it is to integrate with the likes of Xero, QBO and MYOB small business products these days. And they clearly have not seen the likes of ApprovalMax, which come with “out-of-the-box” integration and workflows for Xero and QBO.

 

Claim 3: Reporting

Claim: “SMB accounting software can’t do customised reporting.”

The facts: Yes they can, and it was demonstrated with actual data. And if the standard reports weren’t good enough there are add-ons that offer enhanced, customised reporting! I seem to recall Microsoft PowerBI as a recommended add-on often with Acumatica. PowerBI can also connect to Xero, QBO and MYOB small business products – and there are dozens of other options as well!

 

Claim 4: Budgeting

Claim: “Small systems seldom have budgeting capabilities.”

The facts: Which small packages could they possibly be talking about? Practically every general ledger on the market has budgets. The reality is most people want to use Excel for budgeting. Beyond that there’s Castaway, Spotlight, Futrli etc, all integrated with SMB accounting software.

And if you mean in-system budget creation tools, sure they can be sexy in the sales process but rarely get used as everyone reverts to Excel!

Both Xero and QBO have great functionality around recording multiple budgets. (QBO is better than Xero as it has roll-up/dissected budgets as opposed to the independent budgets in Xero).

 

Claim 5: Audit trail

Claim: “These systems lack comprehensive audit trails.”

The facts: QBO has full audit trails. Xero’s audits are a WIP but that is still adequate given the limited users who will actually accessing the system.

 

Claim 6: Project Tracking

Claim: “Would this have the capability and flexibility in an SMB software?

The facts: Yep, both Xero and QBO now have projects and there are dozens of add-ons that also do that, best of breed, as good as or better than Acumatica!

 

Claim 7: Chart of Accounts

Claim: “The chart of accounts in SMB software is in alpha format and is not flexible to provide the reporting you’ll need.”

The facts: Coding is optional, alpha or numeric, though frankly the very notion is “old school”. Reporting is not driven off the code structure but the way in which you categorise the accounts. These system are easier to use and yet still relatively flexible with Class/Location/Tracking codes.

The reality is, whether it be an NFP, a wholesale stock and debtors business, professional services or any other industry, SME cloud accounting platforms like Xero and QBO offer a serious and genuine alternative to mid-market ERP systems.

Decisions *should* be made:

  • by accepting that compromises will be required regardless of the solution you select;
  • on a ROI basis;
  • on a feature for feature comparison, with significant value placed on the user experience, design and ease of use (believe me, this is important to the modern workforce comprised increasingly of Millennials);
  • by weighting the value one places on “one-throat-to-choke all-in-one solution” versus a “best-of-breed” integrated system.

Decisions *should not* be made:

  • by listening to a salesperson with outdated market knowledge;
  • on historical separations between market segments or historical technical limitations of desktop SME solutions;
  • Based on the misnomer that price equates proportionally to features and functions or value delivered;
  • On the belief that a perfect solution exists.

And for what it is worth, the two key reasons to look at ERP over the likes of Xero and QBO + add ons are:

  • Multi and inter-entity management and processing;
  • The desire to have Finance and CRM on one platform.

This is an edited version of an article that originally appeared on Value Adders.

Image credit: Value Adders

About D1

Digital First covers news and opinions on accounting technology and is read by tech-savvy accountants who understand the importance of technology in establishing competitive advantage.
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