Now with 250,000 users in seven countries, Dutch cloud accounting system Exact Online continues to pose a threat to the handful of other companies making a play in the global accounting marketplace.
AccountingWEB joined a group of 50 European accountants and Exact users at the Formula 1 Circuit de Catalunya in Barcelona this week to share ideas and perspectives on the adoption of cloud accounting across the continent.
Exact Online was first launched in 2005, alongside other European cloud accounting systems such as Twinfield (Netherlands) and e-conomic (Denmark). The UK lagged behind northern European countries in adopting the cloud, but has made up for lost time since, with cloud solutions in use by more than 50% of the practices who participate in AccountingWEB’s regular surveys.
Because of incentives within the tax system, a significant proportion of the UK’s 5.5m limited companies one- or two-person “personal services companies”, typically freelance consultants and software contractors. This sector has been well served by developers of entry-level cloud bookkeeping systems such as FreeAgent, KashFlow, Clear Books and Liberty.
The UK enjoys a favoured position as an international crossroad in the cloud accounting market. So European developers like Exact look to the UK as a stepping stone to North America, while Xero and its legion of add-on developers in Australia and New Zealand have also followed the old colonial trade routes back to Britain as they look to expand. And QuickBooks, too, started here when it looked to expand beyond North America.
With nearly 50 separate options to choose from, UK accountants have a lot of experience with cloud applications and the competition and educational activity surrounding this frenetic market has accelerated the use of these systems.
At the Barcelona summit, Exact executives presented their strategy for carving out a niche in this increasingly global cloud accounting market. With a history in on-premise ERP and integrated CRM as well as financials software, Exact is pitching its online product suite at mid-market manufacturing, distribution and professional services organisations that need something a little more functional than QuickBooks Online, Xero or Sage One, but not the complexity or expense of NetSuite or Xledger.
Exact is currently working on the concept for what it calls “value ERP”. This will cater for companies with 50+ employees that want more complex functionality than Exact's exisiting online "volume ERP" offering but who may not want to configure their own suite with add-ons from different developers, explained Exact director of product marketing Marcel van de Sandt
Also coming at the end of the year will be a practice management module to put document management, workflow and CRM tools in the hands of practitioners who want to streamline their internal processes.
This emphasis on processes was one of the areas that set the different international accounting cultures apart, according to award-winning Dutch accountant Marcel Spoelstra. Having gone through sales and marketing training with Panalitix founder Rob Nixon in Australia, Spoelstra said that UK and Australian accountants tended to systemise their sales processes, while in contrast Dutch accountants pay more attention to internal procedures and data flows.
AccountingWEB members will be comforted to know that value pricing is just as much a cultural shock on the continent. After years of debate in the UK, resistance has probably dropped away, but Spoelstra said he had received hate mail after recently blogging on the topic. “They accused me of being unethical for charging clients different rates for the same services,” Spoelstra said.
But opponents of value pricing ignore what Spoelstra calls “the dark side of the cloud”.
If the cloud gives you the capability to take on more work, you’ll end up having to work harder to increase revenues, he argued. Increasing prices, and agreeing up-front, value-based fees allows the accountant to reap the benefits of efficiencies they can implement.
“Eight years ago, it used to take me 40hrs do the annual accounts for a client. Now I do them in 8hrs for the same price. They get a better quality service for the same price, but I can spend more time working profitably for other clients.”