This morning I had a short call with Nick Riby of Solo, a new service that is aimed squarely at the UK contractor market. Solo is the first offering of its kind where a vendor has taken the services offered by others and created something new that help the business person maintain a full set of compliant records while hiding the complexity of the underlying book-keeping.
Solo has taken the KashFlow financial engine, added Mitrefinch’s payroll application and then sklnned the whole to create a distinctive interface for the end user. Solo doesn’t take everything that Kashflow offers but only those ‘pieces’ the contractor needs in order to run their affairs. Adding in Mitrefinch is a clever move. Payroll is one of the toughest things to get right, always requires updating for changing legislation and is therefore best left to the specialists.
Solo makes a big play about how it is has worked through the MSC legislation and can offer a structure that helps overcome IR35 issues. It backs this with an included insurance that covers up to £75,000 in professional fees from HMRC reviews. That’s a solid comfort factor for customers though I did wonder why the company felt it necessary to make the point at every opportunity.
New users get plenty of help in the form of video help demos that cover such things as raising invoices and reclaiming expenses, document storage and expensing. It isn’t clear how the service deals with ancillary activities like P11 and P11D but presumably those are left to the professional.
Solo can offer full accounting services (it is a Chartered Certified practice) but prefers to concentrate on the record keeping element. Solo spits out a CSV file that is mapped to Digita accounts production. This should make life simple for the professional accountant at year end. According to Riby, it should only take the professional a couple of hours to deal with year end compliance although I would caveat that by saying that time is unlikely to include a review of whether expenses have been correctly claimed and categorized.
The service costs £65 per month and is clearly aimed at the turnkey offerings from firms like SJD which typically charge £95 per month including year end work.
Solo’s entry to the market is a clear indicator of where we are going for small business accounting. It is a welcome step, aimed at a large vertical market that needs a solid offering. Its success will depend on how end users perceive the application’s utility and whether it represents good value. My view is they have the price point just about right for the bundle of services on offer.
Solo will almost certainly come up against professional resistance because it eats directly into the book-keeping service revenue on which many small firms depend. It also competes with FreeAgentCentral on the books and records front.
If successful, Solo will also present a threat to SJD which although early into the market has not moved away from requiring its clients to fill in spreadsheets. As always, a good go to market strategy is essential and right now, Solo is introducing the service to agencies that handle contractor onboarding.
[Disclosure: I have a small shareholding in FreeAgentCentral]