With a new man in charge of the UK, Sage is aiming to re-establish itself in the practice software market with a rebranded cloud product line.
As we reported last week, 2018 was not a good year for Sage - disappointing half-year results in May acknowledged a “failure to execute” that wasn’t helped by major product family changes. Around 30 mid-level executives including UK managing director Alan Laing left the company and were followed out the door a few months later by CEO Stephen Kelly.
After taking over in September new MD Sabby Gill is determined to address some of those problems. Identifying himself as a part-qualified accountant, Gill emphasised the profession’s pre-eminence in his strategy: “Accountants are the number one priority. They are at the heart of our business. We used to own that channel, but we need to win it back.
“We are renewing our love for them and not just selling to them. We’re talking to them about how to engage with clients and how to do more with automation.”
Gill accepts that Sage faces a long-term ground game to lure accountants away from the discounting offers and field teams that Intuit QuickBooks and Xero have been using to lure them to their products. To counteract that threat, Sage has been mounting its own charm offensive in recent months, with the target of visiting 10,000 accountant customers written into the employee appraisals process.
“We’ve got 3,000 people in Newcastle, which is our customer support hub, and a team in Manchester dedicated to accountants. We can support all sizes of accounting practices – that’s how we use our scale.”
Recent moves by Sage’s two big international rivals into compliance products plays to the company’s strength, according to product marketing director Chris Downing. “We’ve already got online compliance,” he said.
The Sage Accountant Cloud online practice suite is “where it needs to be”, Downing continued. “We don’t shout enough about year-end compliance, but it’s better than the others at compliance. Sage Accountant Cloud is the first end-to-end solution in the cloud.
“If you’ve not seen Sage for a while, you’ll be surprised by how much more it does than bookkeeping and how many efficiency gains are built in.”
With MTD looming, some of that functionality is focused on the admin work and digital bureaucracy of the new regime, including authorising the online client and agent services accounts.
“HMRC statistics indicate that 78% of the 850,000 or so VAT-registered businesses are going to need help becoming compliant,” said Downing. “It’s not core accounting but needs lots of engagement. Sage can help with people, support and holding firms’ hands. That’s what we wrap around the product, with roadshows and Sage University sessions devoted to MTD.”
Spring practice software shopping season
With the spring practice software shopping season getting underway, rival developers aren’t going to give Sage a free run. Practitioners and small businesses won’t be able to turn a corner in the next couple of months without running into roadshows and events such as AccountingWEB’s 12 February MTD webcast, sponsored by QuickBooks and a Sage MTD Surgery on 26 March.
Alongside all these events, representatives from the big cloud bookkeeping vendors are knocking on the doors of accountants’ offices. “The model is having feet on the street,” said Gill.
While Xero and QuickBooks are quoting much bigger cloud user numbers than Sage, the Newcastle-based developer still has relationships with a lot of companies that have been using Sage 50 for years. “We’ve got the brand behind us and the products do what they say. We may be later than competitors to the cloud, but our quality is better. You will see us continue down this path, but faster,” said Gill.
About John Stokdyk
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.