Accounting in the Cloud

I cannot say that I have ever been enthusiastic about having to do my accounts. Like most sales animals we fear we what we don't know and we value the work that accountants do only when it goes in our favour. So the thought of having to do ones own accounts is not a natural one.

Some years ago, between contracts, I actually switched from Excel based accounting and bought a small package called TASBooks, which was subsequently bought by accounting big boys Sage. It took a while but over a few weeks I got to know the package by entering all my historic transactions and building up the history of my company. I was actually quite proud of the work and I have done all my accounts myself since. If truth be known, TASBooks is a nice package for small businesses. It's easy to use and it is quite flexible. The downsides are that if you want to produce some meaningful management accounts, it's a very manual process. And to be honest, that's the only thing I am really that interested in - the snapshot.

So with all my harping on about Cloud computing, I have been looking to put ALL my business grade software into the Cloud as a small business. I have signed up with Microsoft Office 365, I use Evernote, Dropbox, Salesforce.com, Skype and now about 80% of my work I can do via my iPad. The last bastion of on premise, old style computing was Accounts. Could I find a solution to lure me fully into the Cloud?

Enter Xero.com - a fully Cloud based accounting solution for small businesses. It's a New Zealand quoted company but let's not hold that against them at his time of Rugby World Cup. They have over 40,000 users worldwide and revenues of over $(NZ)15m this year with an office and sales/support team in the UK and tons of 'Advisers' who are accounting firms using the software who can offer a rounded service for a monthly fee.

I have trialled and bought the software in about 3 days of using it. Quite simply, as a small businessman and a non-accountant, it is exactly what I have been waiting for. It's easy to set up, easy to start and enter historical balances, it is bank account driven and it has complete sets of easy to see reporting that makes sense of accounts. Transactions are more logical to salespeople, payroll runs are no longer a mystical art that involves a 'journal', VAT is easy to see as a running total, back ups are automatic and on the web and the application runs the same on PC, Mac or iPad as it is truly Cloud based.

At anything from £12 to £24 per month depending on your business size and needs, it is reasonably priced too. TASBooks was cheap when I bought it but I upgraded to TASBooks 2 and then took annual support as you need it. That now costs £375 per year and is rising. I pay £1,600 for my annual accounts and £600 per year for a freelancer to calculate my payroll and VAT and electronically submit them to HMRC. That's a lot of money in fees. Now I can pay £120 per month for a fully inclusive service of software and accounting including payroll and VAT from one firm. That's a reduction from close on £2,600 per year to just £1,440.

But the the experience of doing the accounts is now so much better - it can even get automatic links to your bank accounts (HSBC) for a further £2.50 per month or you can import all statements yourself via .csv files. Xero then takes each input line and either asks you to allocate to the appropriate accounts code, or once you have done it once, it learns which payee is coded where and accounts for it and the VAT automatically.

This will cut down the time I consume on my accounts by more than a half. I can input expenses and attached scanned receipts directly into the software on the hoof - today I run separate spreadsheets for expenses. Management accounts are just a pull down menu item while the brilliant Executive Summary gives me a full business snapshot that would have taken me ages before. I can generate and email customised invoices directly from the software and allocating cash is just a dream as you go to the list of outstanding unpaid bills and pick off the one you want.

I don't get excited about accounting, but Xero has become one of my morning rituals along with Outlook and Salesforce. I actually look forward to seeing my accounts not thinking about it with begrudging dread.

Xero is a Cloud based application which is really perfect for small to medium sized businesses. I can't recommend it highly enough.

So, on my journey as a small business into the Cloud, I can now say that I do not have a business application that runs on or in anything other than the Cloud. Microsoft is the closest to it as you still need the client software even though you have Cloud based email and SharePoint servers and it is the most disappointing of the applications.

Here's the thing. Xero has links to Salesforce - I can't enable it yet but the two can be directly linked. Salesforce and Xero directly output into Google Apps as a total Cloud based solution. While Salesforce has Office or Outlook integration, it's clunky, unreliable and there's no solution for Office for Mac.

Microsoft rather disparagingly call Google 'noise' and an advertising company. I think they need some education. There is a thing out there called the Cloud and it is rather changing the game we are all playing when it comes to software and data. All the clever, brilliant applications are being driven by creative and innovative developers in the Cloud and all of them are linking to Google as their partner of choice.

If small businesses don't want the intense hassle of setting up Microsoft Cloud or their on premise applications, then the natural links are with their noisy little competitor, Google.

I have said it before and say it again. The world is changing and Microsoft are a significant distance off the pace. We all think they will survive because they are full of intelligent people who have delivered a lot to business users even if it has never been the most clever or best quality.

But users are changing. The revolution in computing and software means that we all want and have access to buying the next and best - and we love it. It's spilling into the world of business. I am not sticking with the status quo for fear of moving any longer. There is a lot better out there and it's so easy to get hold of.

Microsoft need a refresh of its sales engine at minimum as the message of arrogance no longer has to be listened to and the boring eulogy of how unskilled and unimportant companies like Google are is becoming both monotonous and quite insulting.

First rule of sales - never knock the competition. Change the mantra, Microsoft because you are calling your customers stupid. Most of us as small businesses don't like that. 

And we now have the ability to vote with our feet and wallets.