Accounting publications have been talking about them. Your clients have been talking about them. You’ve seen their advertisements. Cloud accounting vendors seem to be everywhere!
You’ve decided that now is the time to learn more. When you google “cloud accounting,” you are overwhelmed. Your search yields over 300,000 results. How do you make sense of all the noise?
I have researched this topic and have found more fifty vendors claiming to have a cloud accounting solution. It seems that new vendors appear every few months. This indicates to me that we are in the early stage of the product life cycle and will see more vendors enter the cloud accounting market.
The goal of this article is to help you clear up the confusion surrounding cloud accounting and to look at some of the vendors and their products. This article will also include a discussion of hosted solutions and a new category of cloud accounting products.
There is not room enough in this publication to cover all of the details of the fifty plus products that are available. This article includes details about several of the products that you might see at an accounting conference or read about in an accounting publication. The following products appear in alphabetical order.
Intacct offers a full suite of accounting products that serve customers that range from small businesses to multinational organizations. They serve several different industries including accounting firms, faith-based organizations, franchises, healthcare, non-profits and service organizations. Intacct has partnered with CPA2BIZ and offers an Accountants Edition that can be used as a cloud solution for accounting firms and their clients.
Kashoo refers to itself as “simple cloud accounting”. They are looking for customers that want to replace QuickBooks, Excel spreadsheets and shoeboxes full of receipts, i.e. small businesses. Their product includes a dashboard that provides an overview of your financial results and quick access to invoicing and data entry screens. They encourage accountants and bookkeepers to join their MVP program which includes dedicated support and training.
NetSuite offers “one cloud solution for your entire business”. Their product includes Accounting/ERP, CRM, PSA and e-commerce components. NetSuite (NYSE: N) was founded in 1998 and was originally known as NetLedger. There are a number of third-party solutions for NetSuite. The company has an Accountants Program that allows accountants to support their customers using NetSuite. This program also includes training and referral opportunities.
QuickBooks Online is the cloud version of the very popular accounting product from Intuit. This product provides small business owners and accountants with the ability to collaborate online. The product is positioned to serve small businesses and offers import tools to convert data from the desktop version of QuickBooks. The Intuit website offers a chart that allows you to compare the features of the desktop and online versions of QuickBooks. The QuickBooks ProAdvisor program provides accountants with free software, training and certification on the QuickBooks products.
Wave is focused on serving business with nine employees or less. Their solution includes modules for invoicing, accounting, payroll and personal finances. Price is one thing that differentiates Wave from their competitors. They offer many of their modules for free! A price that is obviously attractive to most small businesses. The Wave Pro Network seeks to connect accountants and bookkeepers to small business owners.
Xero offers a cloud accounting solution that includes invoicing, bill pay, expense claims, multi-currency, financial reporting, depreciation and more. The product includes a dashboard that can be used by accounting professionals to access their client’s accounting records. There are third-party applications that offer solutions for CRM, inventory management, e-commerce and many others. The Xero Partner Program provides accounting professionals with training, software marketing leads and support.
Hosted Accounting Software
The vendors included above offer their products using the Software as a Service (SaaS) model. The vendor maintains their software on their servers and allows their customers to access it using a web browser. Facebook, Gmail and LinkedIn are examples of popular applications that also use the SaaS model.
There is another option for delivering accounting software via the Internet. Some vendors are offering accounting products in a hosted environment. In this model, your accounting software and your data run on a remote server and you are allowed access to it via a remote desktop connection.
This model offers some of the benefits of SaaS products (e.g. anytime, anywhere access)without requiring that you change accounting products.
There are numerous advantages and disadvantages of both the SaaS and hosted models. The decision to move to a hosted or SaaS model requires careful consideration and a review of the costs, risks and benefits.
Invoicing & Bill Payment
Any review of cloud accounting software is not complete without the mention of a new category of vendors. The SaaS or cloud model has allowed vendors to build accounting related products that serve very specific needs of a business. One example of this is products that allow businesses to create invoices, process accounts payable transactions and manage cash flow using ACH transfers and credit card payments. Here’s a look at two vendors that offer this type of a solution:
Bill.com offers a cloud based accounts payable, accounts receivable and cash flow management. Their accounts payable module includes approval tracking, document management and automated bill payment. Bill.com has built integration features with accounting software such as Intacct, NetSuite, QuickBooks, Sage and Xero. The company has teamed up with CPA2BIZ to offer their accountants program.
FreshBooks is a cloud accounting solution that includes time tracking, invoicing, estimating, expense capture and cash collections. There are third-party vendors that offer integrated solutions that include project management, CRM, accounting, expense reporting, marketing and time tracking. Accountants can join the FreshBooks Accountant Network to receive training, certification and marketing collateral.
The Story Continues
The world of cloud accounting can seem overwhelming. It is constantly changing with the introduction of new features, the arrival of new vendors and the addition of new mobile apps. It’s a world that includes new terminology, risks and rewards.
It can also be a very exciting place! The cloud accounting vendors are bringing fresh ideas and a lot of excitement to the accounting profession. They are constantly innovating and providing accountants with solutions that help make us more valuable to our clients.
The cloud is putting some of the fun back into accounting!
“Reprinted with permission by the Massachusetts Society of CPAs.”