Sage acquires AutoEntryby
Accounting software giant Sage has acquired AutoEntry, the leading challenger to Receipt Bank in the competitive market for capturing and managing expenses and other accounting data.
AutoEntry applies artificial intelligence and optical character recognition to scanned document images and smartphone photos to import transaction data into accounting ledgers. As well as speeding up input, automation reduces mistakes associated with manual data entry. More than 3,000 accounting and bookkeeping practices use AutoEntry, serving a population of 150,000+ businesses, the company said.
The full details of the transaction were not disclosed at time of publication, but AutoEntry CEO Brendan Woods made it clear that he would be sticking around to make sure the product prospered under new ownership.
Describing the deal in a company announcement as a “great start to our next chapter”, Woods explained his reasons for selling the business: “Sage recognised that automation is a key part of the overall bookkeeping process – it’s becoming a staple of the offering. Sage is committed to giving customers in business and practice the end-to-end solutions they need. Rather than waiting around and building it themselves, they bought in [AutoEntry].”
Woods continued: “I built the business from my kitchen table, and then it was me with our CTO. We were always strapped for cash and had to plot what we could do. In the coming years some of that pressure is now relieved. We’ve shown what we can do with very few resources. I’m excited to see what we can do if those limits are released. We want to deliver more functionality faster.”
There won’t be any need to invest a lot in sales because AutoEntry now has access to Sage’s sales people and customers. “Existing teams will look to introduce AutoEntry to their clients to improve the overall customer experience. That was one of their motivations,” said Woods.
Xero Expenses/Hubdoc, Receipt Bank and AutoEntry offer different facilities at different price points, but all have done well out of the expenses capture boom ignited by the government's Making Tax Digital (MTD) initiative in 2015. While Receipt Bank was the acknowledged market leader at that point, AutoEntry’s per-document pricing model proved popular with later adopters.
“AutoEntry allows accountants to use additional features such as fetch and line item recognition on invoices to ensure records are complete. It’s a base for firms that provide outsourced services, so they can do things like statement validation to ensure all expenditure is captured in the accounting solution before you close off the month,” said Downing.
AutoEntry user feedback in AccountingWEB’s Software Reviews supported this view. “Versatility and accuracy to a much higher standard than the competition, and fairer pricing policy,” is a typical comment in our reviews section. Sage and AutoEntry indicated that this approach would not change.
Woods emphasised that this was a key part in AutoEntry’s decision to join Sage. “From the outset I was very keen that Sage was on the same page as me in understanding the value of AutoEntry as a practice solution. It’s one that only really works if it works with everything. This is not an individual bolt-on to a particular product,” he told AccountingWEB.
“In future, there may be opportunities to improve how [AutoEntry] integrates with Sage products – for example Sage Intacct. Sage might want to leverage some of that automation and bring it into products for that mid-market user experience. But it will remain as its own product, a solution practices can use in conjunction with other tools they use. We will make sure we strengthen what we have with Sage, but there will be no neglect of QuickBooks or Xero customers.”
Sage’s move on AutoEntry comes just a year after Xero made a similar move with its $53m acquisition of Canadian developer Hubdoc. While Hubdoc remains available as a separate product in the Xero app marketplace, some of its automation capabilities are now feeding into the main Xero platform. Coincidentally, Xero Expenses surprised everyone earlier this month by walking off with the Accounting Excellence Software Award for data and expenses management.
Open ecosystem strategy
Sage’s announcement emphasised that “AutoEntry’s ecosystem will remain open and independent”, so customers using non-Sage accounting software would still benefit from its planned investments in the technology. This approach fits the open philosophy that Sage has been promoting recently, for example with the Sage VAT Centre, which is designed to draw information from multiple sources and pass it into the firm’s preferred bookkeeping solution.
The big question left hanging by the Sage-AutoEntry acquisition is whether built-in expenses capture tools are now a default requirement for any cloud accounting platform. If that’s the case, it’s hard not to ponder whether we will see Intuit moving in on the likes of Receipt Bank next.
You might also be interested in
AccountingWEB’s interim Editor in Chief has been with the site since 1999 and returned to the editorial hot seat in March 2020 to support the team through the pandemic. When not tending to the needs of AccountingWEB members and geeking out on their technology habits, he devotes much of his time to an oddball collection of stringed instruments...