IRIS buys Taxfiler to fill cloud void

Risks of cloud accounting
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On the first morning of Accountex 2018, IRIS Software Group announced the acquisition of cloud tax developer Taxfiler to expand its portfolio of online applications for professional practices.

Taxfiler was founded in 2012 by James Reeves and a team of developers who previously worked at CCH. Starting with personal and business modules, the company is now a genuine small firm alternative to the likes of BTCSoftware, TaxCalc and IRIS.

Taxfiler has since added statutory accounts production tools for companies, partnerships, individuals and trusts. It has a live link with QuickBooks Online to create a workflow from trial balance figures through to online filing of accounts and tax returns for all these entities.

IRIS will integrate Taxfiler with its KashFlow cloud accounting program and OpenSpace portal to provide small practices and tax agents with an end-to-end digital compliance solution..

According to IRIS Accountancy Solutions CEO Sion Lewis, Taxfiler “provides an exciting opportunity for us to offer a new generation of professionals tax and accounts compliance in the cloud”.

Rather than competing with its existing Keytime, PTP and IRIS practice products, Taxfiler will open the door to smaller firms, he said. “We recognise the requirements and challenges of small practices are different to those of larger ones and look forward to simplifying the lives of more accountants to help them become more effective and productive.”

Return to the cloud for IRIS

This deal will send a jolt through the accountancy software market. IRIS has been the champion of integrated practice software for two decades, but has seen the suite model come under attack in recent years from smaller, more nimble cloud upstarts such as Capium, Gbooks – and Taxfiler.

When IRIS announced in 2017 that it was pulling back from developing its OpenTax cloud program, the rationale was that its customers preferred to complete tax returns with desktop systems. That may be the case for existing IRIS users, but startups and firms looking to move into the cloud started going elsewhere for their practice applications.

While still firmly entrenched among mid-market practices, IRIS is banking on the Taxfiler deal to re-establish its appeal to smaller practices.

IRIS chief product and marketing officer Nick Gregory told AccountingWEB that while Taxfiler will cater for smaller practices, there will still be a need for a single database that will bring the benefits of integrated practice tools and apps to more sophisticated firms. “It’s what the practice of tomorrow needs, not just the firms we’re serving today,” he said.

After experiences with previous IRIS acquisitions, customers are likely to ask whether Taxfiler can be as nimble and responsive under new ownership. But this is how consolidation works in the software industry and the extra resources, customer base and product support IRIS can provide could cement Taxfiler’s position as the market leader for cloud-based tax and practice software.

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.

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23rd May 2018 09:28

RIP TaxFiler. I forecast minimum pricing will ratchet up to £30 per month for practitioners within three years. They will trumpet their integration with kashflow and openspace as their reasoning.

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23rd May 2018 09:35

Hopefully the first thing they do is not hike rates and ruin a good piece of kit like the big players usually do

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23rd May 2018 09:41

RIP. Guess I'll have to start thinking about moving away.

Sigh! I don't need anything all singing and integrated as I don't prepare accounts or something that makes inputting simple entries hard work - eg integrated packages.

It's a real shame. It really is. It wasn't wholly unexpected though.

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23rd May 2018 09:43

Bad news for Taxfiler users like me.

I used to use PAYEmaster and Keytime prior to Iris buying them, service went down and prices shot up substantially, so I suppose the same will happen here. This plus MTD might finally push me into retirement

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By ABS2
23rd May 2018 10:17

Cement taxfiler as market leader for cloud-based tax and practice software? With the greatest of respect I don’t know one IRIS acquisition where the product taken over continued as it was. It’s purely a purchase to kill it off

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23rd May 2018 10:45

Damn and botheration. My heart sank when I got the email this morning. I'll finish off the 2017/18 tax return season with Taxfiler, but looks like I'll have to start investigating other options.
Shame. It really is great software, but I can't see that continuing.

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By Sparkly
to wilcoskip
23rd May 2018 13:19

Totally agree 100%. Have used IRIS before - it was clunky and hellishly expensive. I bet lots of current Taxfiler customers feel exactly the same way

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23rd May 2018 11:41
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23rd May 2018 11:40

All replies from Taxfiler customers like myself so far are profoundly negative! As it happens, I’m at Accountex today and a visit to the Gbooks stand is now a top priority...

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By ABS2
23rd May 2018 11:44

I wouldn’t want to be on the Taxfiler stand today !

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to ABS2
24th May 2018 19:48

ABS2 wrote:

I wouldn’t want to be on the Taxfiler stand today !


This is exactly what I did. As soon as I heard the news, I did not bother to stop by Taxfiler. I came across a new integrated practice software called "Nomisma"
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23rd May 2018 12:32

That will be what you call a very bad day at work. They will need a beer by the end of the day.

I will need to look elsewhere as well. It does feel like a kill off competition purchase.

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23rd May 2018 14:04

Until last year I used PTP for tax and Keytime for accounts. Then I started migrating to Taxfiler, as it is much easier to use, and is a quarter of the price. I anticipate IRIS will try massive price hikes and integrating it with other software of theirs which we don't want to use. I also anticipate finding a new supplier! I've used Andica before, and that worked quite well. For accounts production, I'm not sure where I'll go, other than it will be somewhere not owned by Sage or IRIS.

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to JDBENJAMIN
24th May 2018 11:11

Sage and IRIS? Yes . . . . they are the two that I'm trying to avoid like the plague too. But it is getting increasingly difficult to do so. If ever Brightpay sells their soul that'll be the time for me to hang up the abacus!

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23rd May 2018 14:06

Whilst I admit that my heart sank when I read the email from James Reeves this morning, there is no evidence that this purchase will follow the grain of previous buy outs and so I'm staying where I am.

I did chuckle however to learn that the benefits for Tf users will be value-adding from Kashflow and Openspace. The former is the most unfriendly and weird of the five cloud accounting apps I use and I already use the latter free of charge and find it far more flexible and user friendly outside the Iris integration.

Never a dull moment eh?

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23rd May 2018 17:02

I could have cried when I read this news...I concur with AnnAccountant's thoughts 100%.
For the small accountant Taxfiler was all we needed.
Like wilcoskip I too will stay for this year and go somewhere else next.
James R... why have you done this to us? No... dont answer that - we can guess.

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23rd May 2018 18:54

So... back to VT it is !!

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23rd May 2018 19:05

They will continue to come out with the usual crap such as 'we will keep it as a stand-alone product' and 'we recognise the needs of small practices', but what happened to Drumhorr's Tax Assistant? Fantastic low cost piece of kit. Iris bought the company and promised we would see no changes... next thing, it's discontinued.

As others, I'll be getting out after the end of the tax season before Iris can manage to lock me in to some ridiculously expensive contract.

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23rd May 2018 20:47

Very disappointing news! I was contemplating moving over to Taxfiler ... but i guess i will stay put now! :-(
RIP Taxfiler

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By SteveOH
23rd May 2018 23:57

Yes, very sad news. This is only my second year using TaxFiler so I will probably continue to use it while it still looks and feels like TaxFiler and remains the same costwise. But I'm already looking for alternatives just in case.

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25th May 2018 12:20

I hope the announcement was met with loud jeers and throwing of rotten eggs!

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24th May 2018 10:08

James Reeves response to my query around pricing following acquisition (hopefully he will be happy for me to post it here rather than everyone emailing asking):

"I understand your concern, but there are no current plans to increase our prices. I feel I must point out that Taxfiler pricing has remained unchanged for several years despite much new functionality being added over that time, and with continued investment in our product it is impossible to guarantee that prices will remain unchanged, but I certainly do not envisage any drastic increases.

Taxfiler is being run by the same team from the same location and with the same drive that has proven so successful in the last few years. Paresh and I and the rest of our team have a genuine passion for small practices and our own product, and if you give us a chance I believe Taxfiler can continue to serve your needs and will remain excellent value for money."

Not the most reassuring regarding pricing. I don't mind if pricing expands with base features but there is a limit. Adding fringe features such as integration with OpenSpace shouldn't impact pricing and if pricing got to the point whereby it hit 3x current pricing, you'd have to question if the product is 3x better.

I will continue to use TF until I see major changes to operations or pricing - mainly because I still think it is better than the competition for Cloud based firms.

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to Harrison88
24th May 2018 11:15

Is it at all possible that IRIS have learned the lesson of Drummohr?

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By mrme89
to johnjenkins
24th May 2018 13:46

No.

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to mrme89
24th May 2018 16:01

Can you please stop beating around the bush.

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24th May 2018 10:10

I'm sad that I didn't hear this news before I voted for them in the 2018 Software Excellence Awards. Wish I could withdraw my vote now. We had a terrible experience with Iris when they took over Drummohr

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24th May 2018 10:18

Fascinating that there is not a single positive response on here to this story. Usually, news of an investor with a large wallet would please users, but not here it seems. I think that this is indicative of the depths to which Iris' reputation for customer service and pricing have sunk.

I am a huge fan of Taxfiler and see no reason as yet to leave. But I will certainly monitor the situation closely and, if service levels drop from their current very high standards (they are exceptional in this regard), I will reconsider my decision.

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to charliecarne
24th May 2018 13:20

charliecarne wrote:

Fascinating that there is not a single positive response on here to this story. Usually, news of an investor with a large wallet would please users, but not here it seems. I think that this is indicative of the depths to which Iris' reputation for customer service and pricing have sunk.

I am a huge fan of Taxfiler and see no reason as yet to leave. But I will certainly monitor the situation closely and, if service levels drop from their current very high standards (they are exceptional in this regard), I will reconsider my decision.

Yep - same for me.

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24th May 2018 10:23

Disastrous news! what a great piece of low priced software, and perfect for very small practitioners.

No doubt the most expensive player in the market will hike the prices beyond reasonable levels and small players will be back in the market looking for an alternative value-for-money software.

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By Paul FD
24th May 2018 10:39

Not much to add other than completely agree with all of the above. My heart sank too. Why do the sellers always want to tell you about exciting news when it's the complete opposite? A fantastic product at the right price with many fans (as user of AW will attest) will probably suffer the fate forecast by the contributors this morning. Great shame, ruined my morning.

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By ABS2
24th May 2018 10:43

I saw on the Facebook post today they have merchandise to give away mugs at Accountex. Kind of apt for how they feel about customer base.

“No current plans” is standard fare what politicians use and means diddly squat

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24th May 2018 10:44

It must be a well known fact by now that whatever IRIS touches next thing that happens is increase in prices and a drop in standards. The moron that runs IRIS is however determined to buy all the competition because it is the only way his company can survive. With the prices they charge and the service they offer is the only way to stay in business. Terrible company and terribel service. Enough said.

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24th May 2018 11:00

What a shame. Taxfiler was an excellent product for the small practice. They will sell this with new bells and whistles that I don't need, then demand I pay for it. The price increases will need to passed on to my clients.

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24th May 2018 11:07

As soon as a reasonably priced competitor turns up who can offer a similar service at a similar price and which can migrate data from Taxfiler . . . . . I'm off like a bullet!

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By Sparkly
to lh3f9764bg1g
24th May 2018 13:12

Snap!

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24th May 2018 11:17

I once spoke to someone from the tax filer team on the phone-it may even have been James Reeves himself - and said how excellent the product was and what fantastic value it was. He replied that they managed to make money at that price and it just showed how the larger software companies were greedy and ripping everyone off. I assume that Iris will now take this excellent philosophy on board and we will see prices fall on their other software. Was that a pig I just saw fly past my office window?

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24th May 2018 11:17

I once spoke to someone from the tax filer team on the phone-it may even have been James Reeves himself - and said how excellent the product was and what fantastic value it was. He replied that they managed to make money at that price and it just showed how the larger software companies were greedy and ripping everyone off. I assume that Iris will now take this excellent philosophy on board and we will see prices fall on their other software. Was that a pig I just saw fly past my office window?

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24th May 2018 11:18

I once spoke to someone from the tax filer team on the phone-it may even have been James Reeves himself - and said how excellent the product was and what fantastic value it was. He replied that they managed to make money at that price and it just showed how the larger software companies were greedy and ripping everyone off. I assume that Iris will now take this excellent philosophy on board and we will see prices fall on their other software. Was that a pig I just saw fly past my office window?

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By Ajtms
24th May 2018 11:20

Anybody remember what happened to Drummohr when Iris bought it? The product does not now exist! and their prices for an alternative were extortionate. We had no alternative but to go elsewhere and happily Taxcalc came to the rescue. I agree with Manchester_man and ABS2.
A very sad day for the customer.

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By ARAFVH
24th May 2018 11:47

Very worrying. PTP was a great tax product...until taken over by Iris. IRIS then moved to OpenTax which was horrendous.
This forced us to look elsewhere and on recommendation on AccountingWeb we found Taxfiler.
As a Taxfiler user since 2014 I fear we may end up looking elsewhere...but let's see if promises of continuity come to anything.

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24th May 2018 11:52

I think that I will go back to doing paper Returns.

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24th May 2018 12:41

Hi
I received a email from James Reeves last night responding to my concern on Iris. So firstly I appreciate that James.

It was a good email and I felt genuine. I really do hope James I am proved wrong that Taxfiler was not purchased to kill competition.

As others have said the minute I think Iris is doing a Iris on Taxfiler unfortunately we will have no choice but to leave.

Perhaps Iris should learn from this how low their now customers think of them.

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to sarah douglas
24th May 2018 13:48

I've always found the Taxfiler guys helpful, pleasant and genuine. Trouble is . . . . . surely they won't be calling the shots any more. Speaking personally . . . . . I was so disheartened by the Drummohr debacle that I have come to the conclusion that it'd be best just to leave Taxfiler now . . . . . or at least as soon as a viable alternative comes along (one that is not overpriced, that is just as functional and which can migrate my data).

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24th May 2018 13:35

With regard to pricing, I have told Tf more than once that they are not charging enough.

Iris's justification for it's charges and the 6ish% increase year on year was that they were constantly having to rewrite the software for legislative and regulatory changes plus they were the main innovator in our industry ("were" being the key word).

Nothing in the world of accounting/tax apps stands still and so the fees charged should reflect not only current conditions but the need for development and future enhancements and I think it reasonable to expect the beneficiaries of this, us, to pay a reasonable sum for this.

The alternative, that I would have jumped at, would have been to crowd fund from us.

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to Paul Scholes
24th May 2018 13:54

Supply and demand.

That's what should determine the price.

But thanks for advising them, Paul that they weren't making enough. I'm sure it was very helpful to put THAT notion into their heads!

As for Iris ever having been the main innovator in our industry . . . . . it seems to me that the real innovators have been the companies they have bought over and whose products they have destroyed.

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to Paul Scholes
24th May 2018 14:22

I could understand that argument if you paid a one time license fee, but a monthly subscription fee should allow for ongoing updates for changes to legislation.

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By tedbuck
24th May 2018 14:08

I agree with you all - great shame and Iris will kill it or make it too expensive.
We are just moving from Iris because of the cost and not very good service - hope they don't go and buy the one we're moving to.

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24th May 2018 14:23

What a shame! Taxfiler is a really good product.

IRIS - One word totally overpriced and at best average.

And so they are going to integrate Kashflow, well most independants like myself don't use kashflow or sage we use Xero or Quickbooks because in my opinion they are far superior products

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24th May 2018 17:59

A sad day for those looking for an alternative to high costs and poor support.

I will also be looking to move before IRIS alter a great piece of software and in all likelihood hike prices!

Are there any options that people have already or previously considered? I’d be grateful for any recommendations.

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By Ajtms
to gwhillerjones
24th May 2018 23:14

I happily used Drummohr for years before Iris bought it and then closed it down to offer an inferior product at an inflated price. I then moved to Taxcalc which is brilliant and reasonably priced. Taxcalc converted all my data for me so the transition was easy.

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