The question of ‘why should cash-strapped companies even be thinking about investing in new IT right now for their financial management and accounting systems?’ is almost irrelevant! – now is the ideal time to be looking at it because the advent of online software has got rid of many of the issues and hassles with changing software and has definitely taken away the ‘investment’ element. In a recession, it’s imperative to have a good accounting system that fits your business to make sure that you survive – and it’s a proven fact that you’re more likely to fail if you don’t – think of it as an insurance policy! The key factor here is, if you aren’t on top of your incomings and outgoings, how can you plan ahead, and if you don’t know who owes you money and who you owe money (and when), how can you make sure you don’t run out?!
So, why is online software the way ahead?
- Buying or upgrading to new software no longer means a huge investment of time and/or money – with most online software you can try it for a limited time period for free or for a minimal cost and if you don’t like it, you’re not tied in to anything – you can simply stop using it. Also, traditionally, to move to new software, it would have been highly likely that you’d also have to buy newer computers or servers in order to cope with it (and would have to reinstall everything else you used!), or your choice might be limited by which operating system or other software you used. Online software, however, is designed to work on most kit, and is compatible with any operating system and it isn’t dependent on how much processing power or capacity you have – it should just work.
And because you’re not having to invest in new IT kit, you won’t need any specialist IT expertise to set it up and for ongoing support and maintenance.
The time-savings follow on from the cost-savings – you should be able to just sign up and start using it (almost immediately), without any loading, downloading, manuals or specialist IT knowledge. It should be fairly instant, intuitive and self-explanatory and most packages have videos and step-by-step instructions built-in to help you get started and to walk you through everything you need to know.
Similarly, most online companies include support, upgrades and automatic back-ups in their subscription which will save you money well into the future.
- 2. Further cost-savings/budgeting – as you generally pay a monthly subscription for online software, at a similar level to something like your monthly broadband subscription, it’s much easier to budget for and afford. It also generally works out cheaper in the long-term as you’re effectively renting the software rather than buying a licence to use it. And if you need multiple users it should be even more cost-effective as you won’t have to pay the full amount up-front again for extra seats – most packages include a number of users in the basic price and offer a small additional monthly fee for extra users.
- 3. Online software gives you instant access to up-to-date information wherever you are, whenever you need it. This means you don’t necessarily have to wait till you’re in the office to send a bill or find out if someone owes you money, which speeds up the whole cash flow process and keeps things moving.
- Most online software will include remote access and a specialist interface for your accountant or FD, allowing them to access up-to-date information and give you proactive advice on a monthly basis (or as often as you want or need it). This can also save time and money on both sides as it should speed up the year end and tax return process – your accountant has access to your figures as and when they need to make sure that things are correct throughout the year and isn’t waiting for you to finish everything off and get it over to him/her so that they can then start getting things in order to do what they need to do.
- Flexibility – the big advantage of online software is that it can generally offer more flexibility at an affordable price than traditional desk-top software. Traditionally, you’d have to buy a package and make your business fit how it worked (unless you could afford something bespoke), however, online software gives you the ability to tailor a package to fit your business, and generally only pay for the functionality you want and need. It’s also more likely to give you options for integration with your e-commerce site or ebay shop, and automation and integration with other business systems, plus extras like emailing direct from your accounts, links to Google maps and compatibility with Outlook or Excel.
What to look for
If yours is an online business, has multiple sites, or trades in multiple currencies then you should be using online software to help you run your business.
Obviously, it should offer everything we’ve talked about above, and other than that you need to look for the flexibility and scalability that suits your business – does it do what you need it to do, will it grow with you and change as your business needs change, will it automate or integrate with the other business processes that you need it to?
Another key thing you may want to look at is what’s offered to accountants and bookkeepers (as well as businesses) – does it cost more for access and functionality for accountants and bookkeepers? Does it offer an export or accounts production facility? Can the accountant set-up and mange the accounts how he or she wishes?
And the key point in a recession – does it track the aged debt and aged credit and give you the credit control options that you need.
Cloud computing/SaaS is THE emerging trend at the moment and accounting software and CRM are the pioneering business applications in this field because they’re both essential to running your business and it’s highly likely that you’ll need instant access to this information from several locations, or by several people. (And we at Liquid Accounts have noticed a real change over the last 6 months to a year in the amount of interest in this area and people’s understanding of the concept)
Within online accounting software, the emerging trends are:
- Online accounting software began a few years ago at either end of the spectrum – very basic, easy-to-use packages for small businesses (Kashflow) and high-end or bespoke software for large enterprises (NetSuite). What’s happening at the moment is that it’s extending into the mid-tier where the flexibility and customisation is arguably of more use. Online software is now a viable option for growing businesses that perhaps need some integration and bespoking but couldn’t normally afford a fully bespoke package, and online accounting is becoming more feature and function-rich to reflect that. The only down-side is that at the moment most providers are doing this in a slightly different way and offer slightly different things so it’s worth shopping around. However, things like ERP, advanced multi-currency, HR, payroll and bar-coding are already available.
- The next phase of online accounting software will see more integration with other business systems, such as CRM, mail, document management, company secretarial, full online filing, moving towards the option of complete, integrated business solutions. At this point, the industry will start to consolidate more and we will probably start to see more uniformity in what’s being offered.
As far as I’m concerned though, this is the beginning of the end in terms of desk-top software and in the next few years we will see everything moving online and it will become the norm.