Reckon One gets ready for UK debut

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A new name appeared on the UK cloud accounting scene this week in the shape of Reckon UK.

Follow a corporate rebrand, the Australian-owned group plans to the launch the Reckon One cloud bookkeeping system in the UK this spring.

Reckon UK emerged from its chrysalis at the Cambridge-based document management specialist Lindenhouse Software, which became part of the Global Reckon Group in 2012. The group is also the ultimate owner of the APS practice management system.

The combination is an interesting one, as Lindenhouse is best known for its Virtual Cabinet document management and portal system. According to Reckon UK commercial director Mark Woolley, the Lindenhouse user community of 650 accountancy firms provides a solid platform to bring Reckon One to this country.

Reckon One has been around for a few years in Australia. The company used to be the local distributor for QuickBooks, but when Intuit pulled out of the deal, Reckon decided to come up with its own cloud bookkeeping system. Designed as a simple, entry-level system Reckon One has struggled to make an impact in the face of Xero’s rapid expansion Down Under. Reckon’s 2014 accounts talked of a UK launch by the end of 2015, but according to Woolley the product has been completely rewritten and the target date was moved to the second quarter of 2015.

“We’re aiming to have it ready for Accountex,” Woolley told AccountingWEB. “One reason it has taken so long is that we’ve done development work in the UK to localise the product. We’re not just shoehorning in the Australian product.”

Reckon One is going to have a big fight on its hands to break into the intensely competitive UK market for cloud accounting, where Xero, QuickBooks and Sage are all well established alongside UK-based systems such as FreeAgent, KashFlow and Clear Books.

But Woolley sees a massive marketplace opening up in the next couple of years. “Ninety percent of UK businesses don’t use online accountinging - and many of them are start-ups,” he said.

“We’ve got an eye on digital record-keeping, where there are big changes coming that are going to push this massive market of small businesses to use some form of online accounting system. We think it’s a perfect time to bring in Reckon One.”

Some cloud accounting systems are growing into quite complex set-ups costing £20-30 a month per user, he added. “That’s quite a lot of money for a small service-based businesses. The Reckon One price point is going to be around £5-6 a month. That’s probably just as attractive as Excel,” he said.

About John Stokdyk

John Stokdyk, AccountingWEB head of insight

AccountingWEB’s Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.

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23rd Mar 2016 13:27

The more the merrier, but it won't be easy

Good luck to them.

Choice is definitely a good thing, and products need to sink or swim based on their own merits, so it will be interesting to see how it goes.

I quite like the 'as cheap as Excel' approach - although not strictly true of course, however I wonder what the compromises will inevitably be? 

Being cheap and easy for clients is one thing, but having lots of clients at scale means increasingly good back office functionality too (for accountants) - and it's arguable how well some of the more established players are doing here.

The danger is that this becomes another 'me too' product.

Looking forward to having a look.

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23rd Mar 2016 16:45

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I very much welcome more entrants.  The price of cloud very much needs to fall and will only do so with good quality competition and a much expanded user base.  The marginal cost per user must be pretty small. 

£5 a month would be cheap enough at the small end - assuming there is actually benefit over excel.  Moreover if accountants can buy it for (say) £2-3 a month it becomes viable to bundle it in even on a £300-400 fee if there are time savings for the accountant. 

 

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24th Mar 2016 14:42

I'm not sure that prices will fall anytime soon. There is a land grab going on in cloud accounting, so prices are pretty low, but most of the big cloud providers are losing money hand over fist. Xero is losing about 50 million quid a year, and I reckon Intuit probably similar in it's cloud operations (TV adverts don't come cheap!). Once the fighting is over they will all want to recoup.

For a possible idea of where prices will go eventually, look where Iris was in terms of profitability 10 years ago - and now they are looking to squeeze every penny so it's all about pushing prices upwards. It's a different market of course and the cloud bookkeeping market will always be more competitive, but as products get more sophisticated it is going to be harder and harder to break in with a new product. As the barriers to entry go up and acqusitions start to happen the strong will devour the weak and prices will climb.

By then, there won't be any desktop products left so there will be no alternative to monthly subscription fees for cloud products.

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29th Mar 2016 15:16

Great Point Tim

I'm often amazed that apparently well educated people think that the normal rules of business don't apply to Internet companies.  If a company runs out of cash, then it will fail.  It doesn't really matter if it makes a loss, provided it doesn't run out of cash.  Tim makes an excellent point that no matter how large a company is, it cannot sustain losses for ever.

Providing software that runs online is more expensive than providing software that runs on a user's own device.  Why?  Simply because you have to provide the resources for them to run it, and manage all of their data as well as write, debug and support the software.  In contrast you can have all the benefits of direct distribution to end users by them downloading your software without having to pay for them to be able to use it.  This means that people should not expect that online software is cheaper than desktop software.  Of course software design can help to minimise the cost of running the software, but ultimately providing the service to run the software must cost something.

Most of the 'Cloud' software available is provided by software companies as 'Cloud' software for their own benefit, not for the benefit of their users.  Of course there are intrinsic benefits to the user from software being online, but for the provider it's much easier to generate reliable subscription revenues from users that have no choice but to use your service once you have their data.  Of course it's also in their interests to make it difficult for users to switch to another provider ...

I hope that Tim's prediction that there will "be no desktop software left" will not come true because I don't think that is in the wider interests of businesses and the software industry.  Cloud services are great for lots of things, but maintaining choice is very important.  Apart from anything else, it keeps providers and software authors on their toes.  Knowing that their customers can choose to leave them should motivate suppliers to provide better services and write better software.

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