IRIS buys Taxfiler to fill cloud void

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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

John Stokdyk, AccountingWEB head of insight

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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25th May 2018 15:33

If you haven't got time to evaluate products go to IRIS. It's the lazy solution.

But if you look around there are plenty of reasonable priced products that are 'best of breed' that will not only save you a fortune but also give you and your clients a better service. The only issue is they are not integrated. However this to me is a small price to pay.

I feel this takeover is IRIS getting a scared.

I do believe the times of the big players like IRIS and Sage dominating the market are over, because like the Blackberry they have been too slow to move with the times. Also unlike Blackberry their products although integrated are not very good.

Call me a cynic but I have to laugh at James Reeves (MD of Taxfiler) answer below. Of course he is going to say that! But he'll soon see how his customers will just leave in droves if they hike the price up. I like the product but as soon as it becomes more expensive than it's competitors I'm off!

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to indomitable
25th May 2018 16:38

indomitable wrote:

Call me a cynic but I have to laugh at James Reeves (MD of Taxfiler) answer below. Of course he is going to say that! But he'll soon see how his customers will just leave in droves if they hike the price up. I like the product but as soon as it becomes more expensive than it's competitors I'm off!

Hmm. That's an empty threat really. If IRIS triple the price of TaxFiler, it will still be less expensive than any of its comparable competitors, so you've just given them an excuse to go crazy with price increases, because they now know how high they can hike it before you leave...!

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to indomitable
25th May 2018 17:16

I do believe the times of the big players like IRIS and Sage dominating the market are over, because like the Blackberry they have been too slow to move with the times. Also unlike Blackberry their products although integrated are not very good.

Call me a cynic but I have to laugh at James Reeves (MD of Taxfiler) answer below. Of course he is going to say that! But he'll soon see how his customers will just leave in droves if they hike the price up. I like the product but as soon as it becomes more expensive than it's competitors I'm off!

[/quote]
I concur!

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By pikbros
19th Jun 2018 02:56

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29th May 2019 14:39

How very interesting it is reading Harrison88's forecast of a minimum pricing of £30 per month within 3-years. I have just received an email to advise:

"we are adjusting our pricing and packages from 1st July 2019. This will enable you to access more great new product features such as MTD for VAT, further bookkeeping integrations, OpenSpace integration and state-of-the-art Practice Management functionality."

and the new pricing:

"£30 per user/per month (*£25 per month if paid annually) "

Presumably that is plus VAT, so that has exactly doubled in price in a year.

Finally James Reeves says:

"We believe the Taxfiler suite continues to provide exceptional value for money."

For a small practice with 2 users (which I thought TaxFiler was aimed at), the annual cost is £720 + VAT. TaxCalc comes in at £850 per year and, in my opinion, having used both, is a vastly superior product.

Didn't James Reeves say somewhere that there was no plan to increase the price of the software?

I echo Harrison88's sentiment - RIP TaxFiler.

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