Head of Insight AccountingWEB
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The web accounting debate

25th Aug 2009
Head of Insight AccountingWEB
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Over the past two weeks, practitioners have debated the advantages and claims of different online accounting systems on a busy Any Answers thread. John Stokdyk reports.

The great online accounting debate was set in train by an Anonymous Any Answers post on Tuesday 11 August. Setting out the criteria for an online accounting system for an accountancy practice, the anonymous questioner posed a series of challenges for prospective systems:
1. Capable of handling the books for multiple clients.
2. Purchase and sales ledger included.
3. Support for bank payments and receipts, and reconciliations
4. Generate the same basic reports as Sage (eg transaction history in various ledgers etc).
5. Affordable and easy to use.

As fans and developers paraded the credentials of different systems, the questioner followed up with further queries that broadened the debate into new areas, including: VAT requirements; project accounting; what Sage has to offer in the online arena; and the advantages of using online accounting system over emailing software files back and forth between desktop applications. These points will be summarised after looking at the main contenders.

There is a “horses for courses” aspect for any software recommendation. It’s pretty difficult to declare that one application is best; it’s more a case of getting the best fit with the prospective user’s needs and budget. That said, KashFlow won the popular vote with five recommendations from the 20 or so participants; while FreeAgent, e-conomic and Liberty Accounts drew two recommendations each. Here are what people had to say:

  • KashFlow - “well received by clients”; has most of the basic functionality of Sage, but easier to use,” said alansmoore. Ease of use makes it very simple for clients to keep good, reconciled records to minimise rework at year end. “It also provides all the reports that the accountant needs. This helps advise the client on a day to day basis and also makes the end of year accounts production easy,” added cjdavies.
  •  e-conomic - “It is an excellent and fully functional system and an excellentt online alternative to Sage,” suggested accounting software-as-a-service veteran Richard Messik. The chart of accounts mimics Sage and gives the accountant flexibility on how to design the books and what to make available online to the client, added Paul Scholes. While the terminology can take some getting used to, he continued, “What finally sold it to me however is that it costs us nothing, ie no partner programme to pay for... the charges only start when you sign up clients and then you can chose for them to be charged directly by e-conomic or for e-conomic to charge you, leaving you to roll up the cost in the annual charges to the client.”
  •  FreeAgent - Recommended by Emily Coltman for smaller clients: “More user friendly for small businesses even than KashFlow... It manages mileage and expenses beautifully easily and there are far fewer entry screens to confuse a client.” Phil Richards added: “More than an accounting system, it actually helps clients manage their business too.”
  •  Liberty Accounts - Has an integrated payroll, with online filing of HMRC returns. “The user interface is very easy for non Accountants to use” commented Ray Backler. Kevin Salter added: “Very responsive to enhancement suggestions, and clients like it too.”
  •  Pearl Office - Coltman’s suggestion for firms looking for similar functionality to sage. Like KashFlow, Pearl uses the same nominal codes as Sage, and has a good import-export facility for data transfers. “Pearl isn't just an accounting system either, it has lots of other modules such as CRM and websites, and has a fantastic stock control system which knocks Sage’s stock into a cocked hat.”
  •  WinWeb - “It works for us, does everything you could ask of it and more,” commented Jason Holden.

VAT requirements and project accounting

As Anonymous grew more interested in the facilities available, the questions took a more detailed slant, with queries on how applications handled VAT, including the flat rate scheme, and what facilities they had for project accounting.

According to comments, KashFlow, e-conomic, FreeAgent and Liberty passed muster on the VAT issue.

For project accounting, KashFlow founder Duane Jackson responded quickly that while his application had some built-in project management features, it could integrate seamlessly with specialist third party programs to cope with more extensive project management requirements.

FreeAgent’s Ed Molyneux joined in to explain that this was precisely the kind of task his program was designed to support. “You can attach time and expenses (from either bills, the bank account or out-of-pocket) to a project, and then produce an invoice to rebill them in about 20 seconds.” FreeAgent’s developers are also working on a routine to link expenses to a project without rebilling them, so providing a real-time view of project profitability.

The Sage dimension

The elephant lurking in this particular room* was the absence of an application from Sage. “Do Sage have an online version and anyone used it?” asked Anonymous. Sage did put its prototype SageLive application online at the beginning of the year, but went back to the drawing board after Duane Jackson highlighted some underlying security vulnerabilities.

Sage 50 has been available online for years via ITinsideOut’s hosted Online50 service, Peter Guinn pointed out. But with Sage working on its own application, it was interesting to see that Online 50 had brought in its own replacement service, Ambition Accounts. “It allows a scaleable upgrade path as our clients grow, with the same software at the core so there's no data transfer or major retraining issues. It copes easily with multicurrencies and large volumes of transactions and has proper period end close downs,” commented Guinn.

What are the benefits of online accounting?

Again, Duane Jackson was the first to pick up on this question. The main benefit, he explained, was simultaneous access – “You can both be working on it at the same time. Nor would you need to wait for the client to email you files (and then he’d have to wait for you to send them back) – it’s all done whenever you want to do it.”

Emily Coltman filled in some additional advantages. First, she noted that because the online systems were designed more for non-accountants, they were easier to use. “You try finding a desktop-based package that's as simple as FreeAgent or KashFlow.”
 
The direct, real-time access to client data also means that there's lots of scope for collaboration, for example to help clients learn the package, or when posting journals for them or preparing management accounts.

Finally, she added, “Everyone's always on the same version and same copy of the software - no messing about playing ping-pong with backups, wondering who's got the latest one, having to upload on to a different version and realising you can't send it back once you've input the journals because the package isn't backward-compatible.”

What happened next?

Anonymous appeared to have taken all these points on board: “Wow, quite a few choices to consider. Thanks everybody for contributing.” FreeAgent appeared to have made the best impression, but Anonymous was soon back online to recount their initial confusion with the FreeAgent sign up system. The initial issues have been sorted out and our online accounting pioneer is planning to take a closer look when time permits.

Further reading

Replies (14)

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
25th Aug 2009 16:54

*For those wondering about the elephant reference

Take a look at this Sage video on via YouTube. Thanks to Dennis Howlett for bringing it to our attention.
__________________________
John Stokdyk, Technology editor

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By Fusion Accounts
26th Aug 2009 13:44

online accounting software

Fusion Accounts fits the criteria listed above. It also supports multi-currency and multiple VAT registration.

Accountancy practices can choose to become a Fusion partner were they can offer their clients preferential pricing and generate additional revenue.  Alternatively we can provide accountants with a free login to their clients accounts.

We would be happy to answer any questions you may have Email: [email protected]

http://www.fusionaccounts.com

 

 

 

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By nconlon
27th Aug 2009 11:54

accountsIQ provides rich functionality at a competitive cost. It is a full-feature accounting package, with unparalleled business analysis and reporting functions. It supports a wide range of requirements.
For more information go to www.accountsiq.com

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By julianshaw
27th Aug 2009 12:12

It's all about being online
The benefits of web based accounting software are becoming more apparent, and pretty much apply to all solutions.

What it comes down to - and this is no different than it has ever been for choosing software - is finding the right fit for the organisation. Some practices will prefer Kashflow, others FreeAgent. A lot will depend on client base, and many other factors will come into play (including of course the criteria mentioned above).

And lots of systems satisfy these criteria - many more than have been outlined here. A bit of research should get a good list of candidates.

Julian Shaw
http://www.arithmo.co.uk

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By gsgordon
27th Aug 2009 12:17

Why no Xero?
Is there a reason why Xero did not get a mention here? It has appeared in other discussions etc on accountingweb. Is it just too new to feature or does it have faults? I'm keen to find out because Xero is high on our list of possibles.

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By Anonymous
28th Aug 2009 12:02

It's just like any software selection - check against what you n

At least all contributors are convinced of the point of web based accounting. 

There are lots of good solutions from the simple straightforward (FreeAgent and KashFlow) aimed at SMEs , through Xero (which looks nice) to more traditionally broader functional solutions focused on the Mid-Market and beyond (e.g. Aqilla, e-Conomic, and Coda2Go). 

As ever, one should do some research. Look for the one that includes the functionality, flexibility and sophistication that matches your business.

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By Richard Holmes
02nd Sep 2009 12:04

Software Satisfaction Awards....

Liquid Accounts were delighted to be voted the Best Web Hosted Accounting Software in Sift Media's own Awards last year.

Liquid has all the functionality of the heavyweight systems out there, with the simplicity of the smaller packages.

We're working hard on the look and feel at the moment, adding graphs and an improved user dashboard.

Nominated in this year's Software Satisfaction Awards for Best Small Business Software, Liquid Accounts continues to move from strength to strength.

Liquid Accounts

 

Best Regards, Richard Holmes

Liquid Accounts

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By David2e
02nd Sep 2009 13:16

Needs, Personal Preferences, Cost, and Value

As already mentioned, it does depend on the specific requirements such as a need for stock control.

In addition to that will always be personal preferences which has numerous factors involved such as experience, tastes, recommendations, first impressions, and even if you just might like the sales consultant on the phone.

Adding to that is cost and the value received or perceived to be received. Most packages are suitably priced for the market they aim for, which makes it a little easier to compare on this basis.

Also mentioned earlier was how e-conomic doesn't charge any club or member fees for their software. This really does help when at least considering quite a number of packages out there aim to make a decent profit just from accountants and bookkeepers in addition to the clients they introduce.  E-conomic are one of the few that treats practice more like a partner in the SaaS rather than as another source of revenue.

We're fortunate to even see e-conomic exclusively offer accountants and bookkeepers the software for free for their own use.  This really does make it easy for those in practice to have this powerful online software up their sleeve for anytime a client has such a need.

David Toohey
The Accountants Circle
 

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By Richard Holmes
02nd Sep 2009 14:09

Very good David

It's good to see that Economic have followed Liquid Accounts' lead with its 'Exclusive' free offering to Accountants.

I don't mind the plug, but you do need to get your facts right when claiming exclusivity.

Liquid Client Manager software has always been free to the accountant or bookkeeper-see Nigel Harris' review of over a year ago.

 

Kind regards, Richard Holmes

Operations Director

Liquid Accounts

 

 

 

 

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By David2e
02nd Sep 2009 14:21

Facts Are Right

Richard

You seem to have misunderstood as my facts are quite right in what I have said.

I wasn't referring to e-conomic being the sole provider of such software to accountants and bookkeepers, but simply that the offer was exclusive to ourselves from e-conomic as they do not make this offer elsewhere.

I actually hadn't been aware that Liquid accounts can be used by practices for their own books at no charge, but it is certainly good to know!

David Toohey
The Accountants Circle

 

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By dialm4accounts
07th Sep 2009 15:02

FreeAgent don't charge accountants either

Great that Liquid and e-conomic don't charge accountant partners to sign up (David, could you clarify please, is it only members of The Accountants Circle who can use e-conomic with their clients for no fee, or can any accountants do that?).

FreeAgent don't charge accountants to become FreeAgent Friendly accountants either.  Being FreeAgent Friendly means you can offer this software to your clients at a discount.

Note - I'm a FreeAgent Friendly accountant.

M

www.homebusinessaccountant.co.uk

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Duane Jackson
By DuaneJAckson
07th Sep 2009 15:36

KashFlow do charge

Just to stick our tuppence worth in too - KashFlow does charge Partners. It costs £799 a year to be a member of our Partner Programme.

You can then: 

buy clients licenses (ie, KashFlow accounts) at less then 50% of the standard price - you're free to charge whatever you like for them or give them away for "free".use document storage so you can make year end accounts, CoI, etc easily available to the clientbrand the software as your ownUse a control panel to give you control over the client account (locking transactions, set access to reports, etc)Access to 24/7 support + telephone support in business hoursa Dedicated account manager
 cross-market your other services to your clients within the softwareset reminders for important dates for the client (whether that be directors birthdays or whatever)Assistance with implementation and roll outMarketing support and literatureStats on when your clients last logged inplus more

We feel there's a lot of value in the above and charge accordingly. We work to a standard, not to a budget.

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By David2e
07th Sep 2009 15:38

exclusive offer

Hi M

e-conomic don't charge accountants for any access to client accounts. The exclusive offer makes the software also available to accountants for running their own books without any company fee which they would otherwise have to pay.  That offer is something only available to our members - which is free too, just a matter of registering.

We do have a paid membership which is entitled to a very attractive 30% discount on fees for clients too which is also exclusive. We don't take any commissions, referral fees, advertising dosh etc - only for the maximum benefit that can passed on in full to our business members.

We don't have any other links to e-conomic, just felt it was worth mentioning this here as accountants with new practices or looking for an online solution can benefit from having this one available, making use of it for themselves without having to fork out a penny.

Will be looking into FreeAgent and others as I do make other suggestions that are also suitable when asked.

David Toohey
The Accountants Circle

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By chrischapman5
01st Oct 2009 13:21

Pearl Software

Its good to see all the emerging (or arguably already emerged) web-based solutions get a mention here and the common acknowledgement of the missing elephant in the room.

I spent the time 6 months ago reviewing independently around 40+ web-based accounting packages, including all those mentioned on this site. For me the clear winner that I've chosen to champion for the use of my clients is Pearl Software www.thisispearl.com

As someone has already said, Pearl is much more than just accounting; it integrates contact management, accounts, email marketing, ecommerce, inventory management and much more, into one system. A small business can use the CRM or accounting as an entry point but then add on modules as they grow or as they begin to sell on the web. Compared to most other providers, you get way more functionality for a lower price point.

I could go on about performance dashboards and numerous cool features, but just go to their free trial at the top right of the homepage and experience it yourself. You'll get the idea.

I'm using Pearl very successfully for my www.sopris.co.uk business and my clients love it. In the interests of disclosure, since my review exercise 6 months ago that I mentioned at the top and many subsequent discussions with Pearl and my friend/colleague Doug Richard (ex-Dragon from BBC's Dragon's Den), Doug and I have joined the Pearl team under a more formal arrangement.

If you're looking for a rubber-stamp from an experienced entrepreneur and software guru, Doug's words on YouTube about Pearl sum it up. http://www.youtube.com/watch?v=Sv7xOZe_-XI

Whichever tool you're looking at using for your business, you can't afford to ignore the benefits of the web-based approach. Whether that ends up being Pearl, Kashflow, Liberty, e-conomic etc etc, that's for the owners of the business to decide and I have faith that you'll all do appropriate research and make good, informed decisions.

The biggest challenge we all face is getting people to wake up to the fact that the Elephant is no longer the default accounting package for UK businesses and the web-based solutions are here to stay.....

 

 

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