Which accounting apps are pulling their weight?by
Polling is active again for the 2020 Accounting Excellence Software Awards. At a time when the software industry and the wider business world are in flux, your feedback can help us track the emerging software trends.
Almost overnight, trends that have been simmering beneath the surface in recent years have become the norm during the coronavirus crisis. Working from home, online collaboration and cloud-based practice management and workflow tools have all come into their own since March.
These sudden shifts in behaviour make it very clear that the accounting profession that will emerge from the coronavirus crisis will work in different ways to what we previously knew.
Last year, we collected 12,744 individual product ratings across 11 software categories. By tracking the products against previous years’ data, we can identify to monitor the relative positions of different products. We use this information to select the winners of our annual Software Awards and feed into AccountingWEB’s technology coverage and Software Reviews.
You can help AccountingWEB find out the extent to which the profession’s technology habits have changed this year by taking part in our software survey.
Underlying trends - SME accounts
With cloud-based small business accounting systems now part of the mainstream, the growth rate we saw in the run-up to Making Tax Digital plateaued last year. While there were signs of renewed activity from Sage 50cloud customers (17% of the category ratings), Xero dominated last year’s survey results with 41% of the category ratings, followed by FreeAgent with 9% and QuickBooks Online with 8%.
FreeAgent gained a chunk of small business customers since it was absorbed into the RBS/NatWest banking empire, but the big block vote it used to get from freelance and contractor users has visibly diminished over the past two years.
This year will be crucial for Sage. Our annual stats show that the desktop accounting software market leader gained just 3% of the ratings for Sage Business Cloud Accounting. Having added AutoEntry and CakeHR to its portfolio, 2020 offers Sage a chance to reassert itself as an integrated, all-cloud bookkeeping and tax/practice software suite.
Practices go cloud
Internal practice systems took a long time to go cloud, but the trend strengthened in 2019 and took another big step earlier this year when Taxfiler added a practice management module to its accounts production and tax applications. At a stroke, 8,000 more firms joined the ranks of cloud practice suite users. Capium (10% of category), Sage (5%) and Nomisma are looking to grow this year. While Xero and QuickBooks have made tentative moves in this direction, the complexities of the UK tax system will put some serious technical hurdles in their way.
Cashflow on the rise
In recent years, forecasting, planning and analysis tools started to make a broader impact in the survey, with 16% of accounting software users adopting these applications. As we reported last year, businesses using cash-focused forecasting products from Float and Fluidly drove a lot of that growth, but we saw the overall proportion fall away in 2019, likely due to the MTD effect that inhibited innovation as the profession focused on compliance instead.
With the cash crunch brought on by the economic standstill and explosion of coronavirus and bounce back loan applications this spring, it will be worth watching whether accountants are sticking with Excel to prepare their cashflow projections, or turning to these automated cloud tools.
Eye on the banking prize
Business banking apps are a relatively new phenomenon. Small business respondents were way ahead of practitioners in this category last year and their votes went primarily to Countingup (68%) and Cashplus (26%).
Accountants in practice were less common users of banking apps, but those who did, represented a broader range of experience, with some of their votes going to Starling and Tide as well as Cashplus and Countingup.
High street banks were noticeable for their absence, which was an anomaly for the NatWest group, whose FreeAgent accounting did well in the accounting software category.
Do accountants trust business banking apps and will the giant groups wake up to the threat from digital challengers? Your ratings in this year’s software survey will help us find out.
How do your own software experiences compare to the underlying trends? Let us know by taking part in the Accounting Excellence software survey – it only takes a few minutes to rate each product and we will use the information to update our Software Reviews pages and other material
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AccountingWEB’s Editor at large has been with the site since 1999, rising from news editor to editor in chief, global editor and head of insight. As a roving editor, he continues to investigate the profession's use of technology around the world. He devotes his spare time to technology history and an oddball collection of stringed instruments...