Accountants bring Cloud summit down to earth

The Cloud accounting industry faces a long campaign to convince the accounting profession to adopt web-based applications according to a small group of practitioners who shared their views with developers at the Business Cloud Summit on Wednesday 2 December.
 
Whatever other commentators say, accounting software functionality is still important to practitioners. If they are going to shift themselves and clients from tried and tested programs, they will demand mature applications that match up on features and functionality right down to mundane things such as data entry.
 
“Accountants don’t feel comfortable pushing Cloud applications,” said Net.Accounting’s Tom Bristow. “If someone’s going to change, it’s got to be to something better than Sage or QuickBooks. If you’re inputting 300 transactions, you don’t want to have to click return after every single one.”
 
Having learned a particular accounting system - often recommended to them by their accountant - clients are reluctant to consider newer alternatives. Cloud accounting developers would grow more quickly by concentrating on start-up accountancy firms and new businesses than by trying to convert existing desktop software users from their current systems, the accountants advised.
 
To a man, none of the four accountants who participated in AccountingWEB’s fringe meeting at the Business Cloud Summit reported that clients were pushing for “Cloud” functionality.
 
This response reflects the tenor of comments on in the Cloud accounting discussion group’s Trash the terminology thread. Rather than arguing the case for web over desktop, online developers need to get across the real benefits of putting accounts online.
 
“Some clients would like a more collaborative approach, or to see live reports online,” said sole practitioner Nigel Simmons. Small businesses don’t like accounting and so Simmons created a firm based around a hosted QuickBooks environment to take the pain out of accounting for them. “We set up as a bureau so we do everything for them. That means we can avoid having to unravel all the knitting at the end of the period,” he said.
 
The inaugural Business Cloud Summit was organised by AccountingWEB.co.uk’s parent company Sift Media and brought together leading figures in this emerging industry. For those following the event on Twitter, the hash tag is #BCS09.
 
See below for a live feed of coverage and comments. More detailed coverage of AccountingWEB’s “fringe” meeting will be published in our Cloud accounting discussion group.


Comments
manojranaweera's picture

Business Cloud Summit 2009 Twitter Report

manojranaweera | | Permalink

John

Hope the Twitter Report produced on Business Cloud Summit 2009 http://bit.ly/5102qe with 451 tweets has captured some of the thoughts on accountants view of the cloud computing/SaaS world.

Best regards

Manoj

chrischapman5's picture

twitter report?

chrischapman5 | | Permalink

Hi John,

Thanks, but it would be great if you/someone had drawn some conclusions from the hundreds of tweets. What was the general theme or thoughts from you (or anyone) after digesting them?

Sorry, but I'm sure there's some good stuff there but I just dont have time to go through it all

Thanks!

As for the report talking about the conclusions of 4 representatives, I dont consider 4 to exactly be stastically representative of the hundreds/thousands of accountants out there. Mind you, it isnt going to be a conclusion that particularly surprises most of us anyway

Chris

Will The Cloud make a dent?

bejames | | Permalink

I've noticed that whenever a new approach or technology comes along there is a natural tendancy for people to split into the enthusiast and sceptic camps. The enthusiasts think it will take over the world and kill off the 'old' way (click will oust brick and the high street will die - The web will make books obsolete etc etc).

This is especially so on the second and third waves of technology.

The sceptics are usually nearer the truth but what almost invariably happens is that the new establishes a new niche that was previously impossible or difficult to serve (and sometimes takes a bite out of the old market too if it serves it better in some respects). Web shopping is a good example.

This seems to be where we are with cloud computing - the enthusiasts and the sceptics lined up for a good old barney, but the outcome will probably be more than the sceptics are inclined think and less than the enthusiasts hope.

What's really interesting is the ways in which the new can compliment and augment the established - and carve a new niche.

But then I'd better declare an interest as this is what we do - ReceiptAngel.co.uk is doing just that. Using emerging / cloud technologies to so something accountants can't really do.

Barry James, Director, www.ReceiptAngel.co.uk

Cloud computing

BryanS1958 | | Permalink

My view is that cloud computing has some advantages, but it is very dependent on computer speed - I've used Kashflow which took forever on my old PC (but QuickBooks 2006 ran quite quickly), but Kashflow speed improved when I changed my PC.

Online programs can react much faster than many desktop versions to things such as VAT rate changes, new VAT rules for services and so on.  However, from my experience of Kashflow (which is the only one I have used much) they fall down in terms of navigation (you have to go back and forth between areas e.g. bank rec to bank transactions, whereas with QuickBooks you can switch between windows so it is far faster to enter or edit a transaction and go back into the bank rec or report to see the effect) and reporting - with Kashflow you have to keep on entering date ranges and customisation is very poor, whereas with QuickBooks there is a good range of customisable reports and date ranges are on drop down menus.  Also, Kashflow 'help' within the program gives bizarre results and hardly ever tells me what I want to know, whereas QuickBooks help within the program is very good - although to be fair Kashflow support is very good whenever I e-mail them.

So it is horses for courses, but for the moment I will stick mainly to desktop programs.  

abelljms's picture

resting in the clouds

abelljms | | Permalink

What accountants MIGHT be willing to try is industry-standard packages which have been modified (by the manufacturer) so that they can be hosted on a remote server, and then accessed from Client PCs across the Web. This presumably would then mean I could give my clients a READ-ONLY DO NOT TOUCH MOVE MODIFY 5HAG ANYTHING log in so they can see their figures and I can enter data.

 

However my modest experience of using Qbooks across a VPN, which is similar to Web scenario, is that it is awful appalling unacceptable as the package is interminably slow to open and produce reports.

Similarly with M-Soft Office if all the data was held in the Clouds. But again don’t drone on about Open Office because unfortunately it is NOT as easy to use as Office so take-up is low despite it being free.

The clouds will lift when some simple solutions are offered?

 

Will clients like it ?

Anonymous | | Permalink

We're quite enthusiastic about doing collaborative cloud accounting with our smaller clients, but for a lot of them "accounts", "numbers" and "computers" are three big scaries and the combination of the three is even worse.

It seems to me that the very people who need this most are the ones its hardest to convince.

 

 

david_terrar's picture

Distorted lens + rules of engagement = wrong message

david_terrar | | Permalink

Hi John,

 As you know, I was one of the vendors sitting in the room.  I got a lot of value out of the session but I have a very different assessment of what messages this Fringe meeting made on the state of Cloud Accounting for two reasons: 1.  This was a very small group of accountants invited in a particular way.  You had specifically not invited any practice that had made the jump from Sage and QuickBooks to one of the new online players.  The ones that were invited and doing something "cloud like"were actually using a traditional hosting approach with legacy software and Microsoft products, and still emailing data files ior using FTP sites to exchange data.  You would have had a much more balance view if someone like Richard Messik of Vantis or Philip Woodgate of Goodman Jones, or a Xero, Liberty Accounts or Liquid Accounts customer had been invited. You could also find a really conservative and traditional practices so we get the full spectrum.  2.  The SaaS vendors were giving strict instructions not to sell.  One of the accountants listed the functionality they wanted to see in an online SaaS product - stability of the vendor, speed of response, drill down like QuickBooks, ease of reporting, export to Excel, VAT done correctly, ability to edit transactions (with audit trail), and bulk data entry (more on that later).  Now I'm pretty sure there were 7 or 8 people in the room biting their tongue or rocking backwards and forwards like patients in a mental institution wanting to shout that "we do that".  The bulk data entry thing is important - skipping from field to field just the way you would with a desktop application - many of the products you had around the table can handle that aspect - we have to.  I really think you cannot draw the conclusions you have with the distorted lens of such a small sample of practices.  We should have another event with a much more representative sample. Even the accountants you invited that had bought in to hosting the software so the IT management problem is someone else's headache were not using any of the great collaboration functionality that is currently available to share data. The could be working with their clients in a very different way. We all have collaboration functions in our products that we were desperate to talk about.    Theother aspect that was mentioned, but not explored properly was the value a practice can get from being able to analyse their whole client base from (which all the SaaS products can probably do), and so target higher value consulting to specific customers who need it - to move from bookkeeper to business advisor.  This is a great topic, and I think all of the vendors will be happy to contribute. You should hold another meeting, but with a more balanced practice audience. I think drawing the conclusions you have from yesterday's session is dangerous.  David Terrar

D2C and Twinfield

 

p.s. I can't seem to get the editor to work today, so apologies for the lack of formatting in this comment.

p.p.s. Would love to hear the views of Gary, Alan, Matt, Hugh and some of the other SaaS vendors around yesterday's table.   

julianshaw's picture

It never rains...

julianshaw | | Permalink

Hi John

Like David I got a lot out of the meeting yesterday, thanks. There was a lot of good information from the accountants there, and some interesting angles on things we all sort of knew already.

Of course it's important to listen when a practicing accountant says they would not change unless there is a compelling reason. And I don't think it's too much of a leap of faith to think that the four accountants there were pretty typical of a large swathe of the profession. Their comments were well-considered, forthright and probably very representative. 

But, I've got to say I agree that your conclusion may be limited because there was only one viewpoint from the accountants. Without hearing from "converted" accountants there is only the part of the argument that shows the barriers. There is not the side that has addressed them. And also, there is not the voice that says "not ever".

It would have been interesting to hear a convert when a particular point was raised. Say the point about training clients on new systems. Had that been put to someone who now uses a cloud system, then the discussion between the two would be very informative. Finding out how real and significant barriers are overcome would be as useful as knowing what they are in the first place.

(To be fair the original point of the session was to have accountants who were not yet pro-cloud. However, having a broader range would have been better, converted and anti-cloud practices, and I think that has been conceded by AW.)

I'm not sure having the opportunity to "sell" would have added to the session. It might have lead to a bragging match. But it would definitely have allowed vendors as a whole to address the issues raised. From there, the response by the accountants would have been useful.

As vendors, we will pay close attention to what came out of the session, but accept there may be more to it. It's not the end of the world, but as you say, it does suggest a difficult task to break the current stasis.

Another session would be really useful, one including the whole spectrum from staunch opponents, through those who have decided it's not for them at the moment, to the converted.

Julian

Arithmo

 

 

John Stokdyk's picture

Thanks for all the feedback

John Stokdyk | | Permalink

Though it is causing David some anguish, the tenor of the "fringe" panel and subsequent comments here did cast a little shadow over all the gung-ho Cloud sessions taking place downstairs at the Lancaster Hotel yesterday.

As part of the invitation process, we turned down a couple of well known Cloud enthusiasts. Our session was intended as a semi-private gathering to give vendors an opportunity to find out how some typical accountants felt about the Cloud, to hear what barriers might exist and see if there were concepts and approaches that would begin to win them over.

I may have committed the journalist's sin of simplifying the nuances of the meeting into a few superficial paragraphs, but the object of the exercise was not to produce a world-shattering scoop. It was intended to give all parties (including AccountingWEB.co.uk) a chance to learn from each other. As mentioned at the bottom of the piece, I'll put more of the material that arose into our Cloud accounting discussion group and hope that it helps both interested accountants and suppliers find a more constructive path they can follow.

Rarely does Dennis Howlett miss an opportunity to send a barb in our direction, but among his coverage of the Business Cloud Summit, he commented about the fringe panel meeting: "The industry has been and remains poor at understanding how to match marketing to customer (and here I include professionals) needs..." That was the nail we were wrestling with at yesterday's panel and Dennis hit it right on the head.

He continued: "If SaaS is in the implied trouble the fringe meeting report suggests then what the heck was I witnessing at the same building where 400+ attendees packed out the Business Cloud Summit venue? Oh yes – not many accountants in THAT audience." This too is an important observation. The Business Cloud Summit played to an enthusiastic audience of corporate CIOs, managing directors, HR and sales people and demonstrated that the Cloud is making big inroads in these markets.

The size of the finance contingent at the main event is a concern, and I find it odd that a technology as apparently democratic as the Cloud is following the traditional adoption pattern where corporates buy in early and SMEs follow along when it matures. But then, of course, there are a number of cultural, procedural and technological barriers holding finance and accountancy back from the Cloud.

What we try and do on AccountingWEB.co.uk and other Sift Media communities is reflect and respond to our members. Our Software Satisfaction Awards are tellilng us is that Cloud accounting applications are taking off in significant numbers (roughly doubling each year for the past two years). The Cloud vendors have caught the attention of the HR & CRM sectors, but as I told the panel yesterday, the Cloud's real battle for business hearts and minds is now taking place within the finance and accounting function. That's why yesterday's session was so important. It demonstrated that the vendors have a lot of work to do to get their message through to the Sage generation and hopefully it may have given them some pointers about how to go about it.

I look forward to more explorations and conversations around this topic.
__________________________
John Stokdyk, Technology editor

 

david_terrar's picture

Any answers?

david_terrar | | Permalink

John,

I understand your position, but you haven't really bothered to answer or address the points I raised.  We knew it was an invited audience, but really not representative enough to start drawing conclusions.  Will you broaden it out for a follow on session?  Will you do some research amongst the readership? 

I see that Julian agrees with some of my comments, but like me he is still up for doing some more sessions because we did learn something and the barriers to making the switch are a crucial topic to explore.

Julian,

I think we mostly agree.  I just want to clarify that I wasn't after any of us selling, which would have defintely been counterproductive.  With hindsight we should have asked John and Andy to let us elect a SaaS accounting spokesperson who could have made some of the key generic points on behalf of all the vendors. 

David Terrar

D2C and Twinfield

jairorojas's picture

Little knowledge is always dangerous

jairorojas | | Permalink

 I agree with many of the conclusions form the accountants we heard at this group, and some of the conclusions the groups and John arrived to. Jargon is a killer, change for the sake of change, etc. But fully agree with David and Julian that jumping into conclusions and generalisations with just a few hand picked not yet converted few could be misleading. I applaud the work of SIFT media and Accountancy age for such magnificent event and look forward to see more of this sessions with a larger variety of audiences. As I am sure many organisations would, I pledge the support of the BASDA Cloud Group to help take this further. 

david_terrar's picture

Ooops - it's AccountingWEB!

david_terrar | | Permalink

Jairo,

Glad you agree on the dangerous conclusions issue, and I agree it was a very useful event all round, but you've made a freudian slip - it's AccountinWEB, not Accountancy Age - quick edit required!

David Terrar

D2C and Twinfield

This is short sighted - literally!

John.Paterson | | Permalink

I don't think that it is meaningful to ask four accountants their opinions on the future and then, after they all said they can't see it, draw the conclusion that it won't happen. Particularly when they have been already chosen for their views.

First, disclosure time: I'm not involved in any SaaS accounting product but I do run Really Simple Systems, www.reallysimplesystems.com, a SaaS CRM system, and there are parallels with user adoption. I also ran Systems Union, the author of SunAccounts, for 15 years so I think I know the accounting space. I reckon that most new purchasers of CRM systems now include SaaS offerings on their shortlist, and our stats show that of those that do, 70% purchase a  SaaS system. It is generally predicted that by 2011 80% of new CRM purchases will be SaaS.

The advantages of SaaS are well rehearsed and there is no need to go through them here, if you need convincing download “The Business case for Software as a Service” from Intellect at www.intellectuk.org/content/view/5534/84/.

Now, there's many reasons why SaaS CRM systems might be more popular than SaaS accounting systems, not least accountants' natural conservatism (bless ‘em, and we wouldn’t want it any other way!). Back in January last year we ran a survey on SaaS adoption and that showed that "only" 35% of people would be confident to switch to a SaaS accounting system (and 8% already had). It will be interesting to see the results when we run the survey again next month, but you can be sure that the numbers will have grown.

Back in 1992 when Microsoft launched Windows 3.1 most PC based accounting systems were still using DOS and many users were reluctant to switch. Why? Well, slow user input was a major factor, if that sounds familiar! Over the next three years every accounting vendor switched to Windows, and those that didn't went out of business. The new Windows products solved the user input problems, added extra functionality and took us to where we are now. You'll not see many DOS products around today.

So will SaaS accounting solutions triumph? Well, just ask yourself one question - how many new accounting systems were launched this year that weren't SaaS?

John Paterson
www.reallysimplesystems.com

raybackler's picture

I am one of the converted

raybackler | | Permalink

I was initially invited to sit on the panel, because of a blog posting on this topic, but it was made clear that only those sceptical of Cloud applications were required.  I support this approach, because I really wanted to understand the barriers.  I have been a committed user of Liberty Accounts in my practice since 2004 and some valid points have been made by all of the contributors here and including the summary of those on the panel.

For our practice, the ideal user of Liberty Accounts is an SME with between 4 and 40 personnel.  At this level there is some administration support in the business and that is a crucial factor in ease of adoption.  The administrator does not have to be a bookkeeper, but has to handle some of the processing to achieve real time accounting where it is then possible to use the data to collaborate effectively with the business.  In my experience most business owners don't really understand the benefit of this approach until they are working with it on a day to day basis and then they never want to lose it.  By then the partnership between our practice and their business is fully integrated.

We don't work the same way with each client, because it is dependent on the skills available within the business and dependent on what the business does.  Normally, we start clients with creating their own sales invoices.  They then enter receipts and get a real benefit in being able to see the amount owed by each customer in real time.  We carry out regular bank reconciliations, often by using online banking and that verifies the sales ledger balance regularly.  We let them know if there any errors and this means that they learn quickly.

We next move on to entering purchase invoices and supplier payments.  Again with frequent bank reconciliations, we are verifying the data and feeding back errors.  Finally, we tackle staff expenses and that is a far as we expect most clients to go.  At the same time we are doing monthly payroll that is fully integrated and quarterly VAT Returns from the data already entered and verified.

Most clients attempting to do their own bookkeeping end up in a mess.  They usually have a nightmare doing VAT Returns from incomplete records and they usually have the payroll done by a third party.  With our collaborative approach, we are using the same software as our clients and all of the data is live.  Consequently, management accounts are just a click away for the reports.

The most critical issue for SMEs is cash flow.  By having real time debtors, creditors, VAT, PAYE all verified by regular bank reconciliations, our clients stay in control and if they wander off the path we alert them to a problem.  This collaborative approach really benefits a client's business and it is not possible when software is used solely within an accounting practice.

There is much more to say, but accountants should make the effort to work more closely with their clients. 

Ray