An accountant’s guide to cloud bookkeeping tools
AccountingWEB member Glenn Martin has spent much of the past year assessing the merits of different cloud accounting engines and wanted to share his findings with the wider community.
After putting in all that effort, he did not want his work to go to waste and thought other accountants might benefit from his conclusions. Feel free to add your observations and thoughts about the marketplace below.
AccountingWEB would like to thank Glennzy for his generosity in sharing this report and look forward to further contributions from our accounting citizen software reviewer.
Prices*: £10 Starter (5 invoices/bills, 20 bank transactions), £22 Standard, £27.50 Premium (*introductory offer currently in place for £5-£13.50 rates in first three months)
Standard package includes: Unlimited users, automatic bank feeds, budgets, smartphone apps
Optional extras: Payroll - £1/month per employee
Add-ons: 400+ listed in Xero.com UK add-on marketplace
- Ease of use - clients take to it very well
- Massive add on community to tailor software to your needs
- Now No 1 with 133,000 users in the UK
- Huge marketing hype behind it
- Loved by the "Apple crowd"
- Now links with Digita
- Has more functionality than rivals
- Well developed bank feeds with most major banks.
- Doesn’t do CIS
- Changed tack on delivering final accounts; we're still waiting for iXBRL solution
- Pricing is of concern
- Can be costly when add-ons are used
- Concerns over KPMG deal
- Support not ideal to some if they like to speak to telephone
- Currently spends 70% of revenue on marketing; had expected this to be self supporting by now [Xero UK MD Gary Turner has challenged this assumption - see comment below, Ed]
- Data entry is slow if not using Receipt Bank
- Marketing not so good in the North
- Seem to be more interested in bigger firms with Gold status and above
Xero is a very good bit of software. It is often used by ambitious clients who are going places, and they genuinely love and gush about the product.
Xero has a big UK user base, but I don’t personally get all the marketing hype. It is currently claiming to be the market leader, but its dominance has waned over last 12 months.
Verdict: It’s better to be in the Xero camp as opposed to be outside looking in. I intend to use it for more active clients who will make use of add-on features and look to buy additional value added services
Prices*: £6 Self Employed (1 user), £7 Simple Start (1 user), £15 Essentials (3 users), £25 Plus (5 users) - *introductory offer currently in place for £1.80-£10 rates in first six months
Standard package includes: Bank data imports, quotes/estimates, smartphone apps, budgets (Plus version only); free membership of ProAdvisor Programme gives accountants access to enhanced QBO Accountant edition and other benefits
Optional extras: Payroll - £1/month per employee
Add-ons: 144 listed in intuitapps.com UK directory
- Intuit sees the accountant as the customer and aims to support them to sell their products.
- Priced well with big discounts for accountants
- Has most of the key add ons you need
- Looking for market share so keen to help accountants grow.
- Big following in Birmingham area after sponsorship of local football teams
- Supposed to be biggest worldwide provider, with 1m+ users
- Quite a good marketing pack built into accounts dashboard, with funds available to promote QBO to clients
- Doesn’t do CIS
- Now the software of choice for Tax Assist, which could lure users away with the cheap fees they offer
- Data entry is slow unless Receipt Bank is added
- Not quite as easy to use as Xero
QBO is the main rival to Xero, so I’ll be keen to see what its UK user numbers are in 12 months’ time.
But if you take away the marketing horsepower being put behind the product, there’s not much to set it apart in terms of operational use. Nevertheless, I could see QBO becoming main my main software if Xero pricing keeps heading north.
Verdict: I will be using QBO for clients who don’t want the frills available with Xero and those looking for more a basic compliance service.
Prices: £5 Start (1 user), £20 Accounting (unlimited users)
Standard package includes: Quotes, bank feeds, cash flow forecasting, smartphone apps
Optional extras: £20/month per additional company; Payroll - £5-15/month (for 5-15 employees); Partner Edition for accountants at £10/month integrates with accounts production, CT and other Sage Impact tools
Add-ons: 23 listed in uk.sageone.com/add-ons/ directory
- Popular with users of older desktop versions of Sage 50 and Sage Instant
- Actively making a comeback to the market after a shaky start a few years back
- Sage One Cashbook great alternative to spreadsheet users at £1
- Priced reasonably well, great deal for accountants
- Big following in the North
- Has sufficient functionality for most users.
- Very active in the marketplace and closing gap on competition rapidly
- End to end capabilities if used with Sage One Final Accounts and Corporation Tax modules
- Became unpopular with users over pricing once you became long term user.
- Early versions of the cloud application were very poor
- Not quite as polished as Xero or QBO
- Slow data entry
Sage One continues to be the most likely option for desktop Sage users who want to convert to a cloud system. The Cashbook version is great for small jobs.
Sage One has the resources of a big software developer behind it, but still has a way to go to catch up with more mature products from Xero and Intuit.
Verdict - I am already using cheap Sage One Cashbook licences to convert spreadsheet users in preparation for the MTD quarterly reporting regime.
Prices: £5 Starter, £10 Business, £15 Business+ Payroll
Standard package includes: Bank feeds, quotes, departmental accounting, CIS, integration with IRIS Open tax and practice tools
Optional extras: Payroll available as system upgrade
Add-ons: 50+ apps available in online catalogue
- Does CIS very well, so good for construction clients
- Priced very well at £10 for main version
- Can appear as a white label version with your branding
- Bank Feeds can be problematic
- Very clunky to use
- Limited reports
- Clients struggle with bank reconciliation
- Doesn’t have the range of add-ons that other cloud accounting engines do
- Uncertainty about its future direction now that KashFlow is owned by IRIS
Clients stuggle to use KashFlow without a lot of help from me and bank rec problems present a major hurdle. With the exception of those in the construction section, it’s not an ideal system for my clients.
Verdict - Will not be actively supporting KashFlow going forward and will look to migrate clients onto other products.
Prices: £7.40 Together, £16.50 Together+, £POA Enterprise
Standard package includes: Unlimited users, bank data imports , quotes, budgets, cash flow forecasts, P11Ds, stock, CIS, smartphone app
Optional extras: Payroll available as system upgrade to Together+ or £5.20/month, also HR for £5.50
Add-ons: 12+ app integrations listed in online catalogue
- Priced at reasonable level
- Has functions such as CIS and other that are not available with main players
- Very clunky to use - has not proved popular with clients who trialled it
- ClearBooks comes across as a small outfit, which makes me wonder about the level of support and whether it may end up being acquired by alarger group
- Limited marketing activity - they seem very quiet of late
- With few clients using it, is it worth offering to them?
Basically, I just don’t like ClearBooks and neither do my clients. Suspect it will be absorbed by a bigger player soon.
Verdict - Have dropped this software from my portfolio and moved clients onto other products some time ago
Prices: £19 Sole Trader, £24 Partnership, £29 Limited Company
Standard package includes: Self assessment filing, tax timeline and P&L view showing tax liabilities, estimates, time tracking, project reporting
Optional extras: Dividend vouchers & CT tools available in Ltd Co edition
Add-ons: 36 listed on integrations and add-ons page
- Excellent software for freelancer market - does what it says on the tin.
- Great people to deal with
- Does not work so well for non freelancer businesses
- Don’t like the pricing model with Sole Trader, Partnership and Limited Company versions. Since all my clients are limited companies, they have to go on to the most expensive version. Cashbook, VAT trader and full versions would be better
- Small discounts available to accountants. I notice they’ve been hooking up with some big firms like Crunch - presumably with some hefty discounts included. If they offered more favourable pricing to accountants they might get more take-up with smaller firms too.
- Great software, but doesn’t seem to have a following in the North East.
- Would certainly use FreeAgent if my firm managed to get into serving higher-level freelance sectors like oil & gas or IT, but at present it’s too expensive for lower value jobs.
- Suspect FreeAgent clients will be the most likely and able to do quarterly reporting themselves under MTD.
Verdict - Will still list FreeAgent as supported software as I carry on my quest for a better freelance client base.
Prices: £15 Small (<100 clients), £30 Medium (101-300 clients), £45 Large (301-500 clients)
Standard package includes: Bookkeeping & payroll
Optional extras: Accounts Production £15-45, Corporation Tax £15-45, Self Assessment £15-45, P11Ds & Auto Enrolment £15-45, Practice Management £25-75
Add-ons: None listed; Capium has a one-stop shop approach
- Looks to be very complete software.
- Is Free to cleints
- Now has CIS added
- For practitioners, it can provide an end-to-end accounting and compliance capability if used with Capium Suite.
- Does not have bank feeds
- No add-ons available as of yet
This is the young pretender in the chaos that is likely to accompany MTD. Because it’s free for clients it could provide a real alternative for those clients that you have to bring in house because they will not able to tackle the bookkeeping themselves.
Verdict - Planning to use Capium as our practice software and will trial these the bookkeeping application as part of that migration.
Prices: £5 Starter for Accountants (for sole trader clients), £19 Accounting Standard (3 users), £29 Accounting Advanced (5 users)
Standard package includes: Bank feeds, CRM, document management, receipt scanning (fee incurred per scan), smartphone apps
Optional extras: £7.50 per extra company; £5 Accountancy upgrade includes client portal, budgets, document management, bank feeds for unlimited client numbers; also modules for wholesale/distribution from £109, project management from £139, time & billing from £69, and manufacturing from £189.
Add-ons: 50+ listed in Exact Online Apps Centre
- Looks like a very slick and complete online suite with room to grow
- Exact is priced on modular basis so you can pay for what you use
- Looks to have Receipt Bank-like functionality built in to capture expense and invoice data, which makes sense.
- Exact may be very well established in Europe, but is quite a latecomer to the UK market, so they’ve got a lot of ground to catch up
Exact’s built-in smartphone data capture facility gives it huge potential. If it works well, that will be a very slick option. I am surprised other accounting engines have not tried to develop something similar.
Verdict - Will watch with interest to see how Exact develops in the UK.
Other cloud accounting systems are available. Can you help fill out Glenn’s review with observations about the applications listed above and others such as Reckon, Liquid, Gbooks, Twinfield and any others you’ve tried? Feel free to comment below…