Cloud accounting momentum accelerating and morphing to mobile

by admin on May 2, 2012

in Cloud Computing/SaaS

FreeAgent recently reported that it has passed the 20,000 paying customers mark. Five years ago it barely existed. In the year to March 2012, Xero counted 78,000 customers of which the UK represented 11,000. We’ve not heard from KashFlow in a while on customer count but assume they are marching along at a decent clip. Earlier in the week I caught up with Gary Turner, MD Xero UK. I was keen to find out how the company got on with its nine date UK tour aimed at professional firms that ended last week.

To give a flavour, Gary said: “We have to go back to one venue because we could have filled it twice over. That’s a huge difference from just two years ago when we did well to attract more than a few handfuls of people at our events. The phone has been ringing off the hook. Demand is such that we’ve hired 10 people in the last couple of months.” (Headcount is now 17.)

Asked to explain the sudden uptick, Gary believes that even for existing professional firm customers, the fact Xero is dropping in practice management for free for firms that bring on 20 customers makes a big difference. “They can visualise real benefit from a solution that properly integrates the end customer experience into their working environment. In 6-9 months time we’ll have financial reporting in the UK. It is currently being rolled out in New Zealand. We’re demonstrating a roadmap they can not only understand but see as our long term commitment.”

But it is in the design that I am interested. The last few weeks of traipsing around the world have clearly demonstrated that the user experience of the future is going to be dominated by what can be delivered on smartphones and tablet devices. Recent research says that Apple shifted 11.8 million iPads in the last quarter. The detailed research says that 19% of PCs delivered in Q1 were tablet devices. Increasingly, I rely on a slew of mobile services for everything from note taking to expense recording, hotel booking and other essential travel.

During our conversation, Gary said that Xero’s design principles are driven by a “mobile first” approach. That makes a lot of sense to me. The ability to see your bank rec while on the way to a funding meeting or check who has paid before going into see a customer has huge benefits that cannot be achieved from desktop applications. Sure, you could get at the data via a laptop but is that the best way when on the road? Increasing numbers of people are voting with their wallets and developers are responding accordingly.

As an industry, vendors are only just scratching the surface of what might be achievable on mobile devices. What is interesting however is that many of the vendors I have spoken with are bringing in designers who understand the consumer world as part of their efforts to ensure they create a great user experience. I get that. Mobile apps that don’t meet all my expectations from the get go are usually eliminated within a couple of minutes.

The next challenge will come in meeting the nuanced demands of those who prefer to access through mobile devices. Already I see signs that suggest the developers of today will be challenged to meet the tidal wave of requests for small but important customisations. How the accounting vendors monetise those efforts remains to be seen although Xero plans to make mobile access free to all users of the main Xero system.

In the meantime, we seem to have reached something of a tipping point where despite ICAEW research suggesting only 7% of professionals are interested in cloud, the leading vendors see a very different picture.

Comments on this entry are closed.

Rob Gibney May 2, 2012 at 6:22 am

Interesting stuff – I was at an ICAEW event this week where Gary Turner and others were speaking. I’d be interested to understand the difference between adoption of cloud accounting software between practice and businesses, particularly in the mid-market. I agree with the need for strong mobile apps for easy access to accounting data

admin May 2, 2012 at 10:23 am

In the mid-market, we usually find that accounting is a follow on to another deployment (often CRM) or is part of a ‘suite’ deal where the buyer is looking to go ‘all-in’ on the cloud. Now – a lot depends on what you get as to how you then define ‘user’ for accounting purposes. If the solution is one of the above then there could (theoretically) be business wide adoption since different parts of the business touch accounting data in some way or another. It is rare to see a mid-market business go to cloud accounting as a stand alone as it often makes little sense right now.

Jim Secord May 2, 2012 at 5:27 pm

Great article. We’ve seen this at Kashoo. Our small business iPad accounting app has been downloaded by over 20k people in the past 8 months and we’re seeing that growth accelerate. People can relate to the tablet as a virtual shoebox that is ideally suited for capturing receipts, invoicing on the go, or checking account balances. The reality is that many small business owners already use their smartphone as their primary computing devices for tasks like email, contacts, calendaring, and banking so an accounting app is a logical extension.

When you re-think the overall user experience for mobile and take advantage of the unique features of the device like camera (scanning docs), GPS (tagging), instant-on, touch interface, and integrated datasets like contacts, calendar, etc. the convenience and usability surpasses anything that can be delivered on the web.

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