11 up-and-coming cloud accounting applications

11 up-and-coming cloud accounting applications

Summary: The playing field is becoming rather crowded as cloud startups vie for attention among SMBs against venerable offerings from Intuit, Microsoft and Sage.

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TOPICS: SMBs, Cloud
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I couldn't help but notice that No. 3 on the wish list of cloud services desired by accidental IT managers is accounting and financial applications.

Like customer relationship management (CRM) records, company's financial records are the sort of thing that it is convenient to be able to access regardless of location. Wouldn't it be good to know if an account is falling beyond in payments, especially if you are about to go ask them for more money? And woudn't it be easier on everyone if you and your managers could approve expense submissions on an ongoing basis, rather than creating a bottleneck in the process?

Naturally, all of the well-known SMB accounting vendors -- including Intuit, Microsoft and Sage -- are nurturing cloud-hosted editions of their applications. But there are also a slew of startups approaching this space, most of them with strong mobile access propositions as well as ties into other cloud applications for small businesses, including Google Apps.

The cloud accounting service providers might not have the legacy credentials that can be boasted by the big guys, but they are gaining traction as options for small businesses that might be looking for something a bit different or just something simpler. 

FinancialForce.com - The San Francisco-based company, which has backing from Salesforce.com, is 100 percent focused on accounting and finance applications that are integrated with venerable CRM platform. It's probably more than a really small business will need, but the service has the advantage of both an impressive integrator network as well as a whole ecosystem of related applications that can be plugged into its platform.

FreeAgent - As the name suggests, one focus of this solution is freelancers who need a straightforward way to handle invoicing and bookkeeping. It "plays nicely" with Google Apps, PayPal, Basecamp (the project management service) and Capsule (CRM). There's also a module for multicurrency invoicing (which makes senses as the company behind it is from the United Kingdom). The monthly subscription is $24 per month.

Freshbooks - The Toronto-based service provider got its start as a billing alternative (the founder accidentally saved over an invoice in another accounting system), but it includes modules for expenses, time tracking and more. There are strong mobile applications for Apple iOS (smartphone and tablet) and the service now boasts 5 million users. Pricing starts $19.95 per month, although you can try it for 30 days for free.

Intacct - Based in San Jose, Calif., the 14-year-old cloud financial management software company just reported a 38 percent increase in bookings for its fiscal year ended June 30, 2013. It counts around 6,000 organizations as its customers. This is not exactly a simpler solution -- one of its strengths is a whole suite of integrated financial management applications for things like inventory management, vendor management and financial reporting. But it is probably a good option for fast-growth organizations, as the company has a big network of CPA firms and VARs that can create customized installations. Some trivia: the company's name is literally a mashup of the word's "Internet" and "accounting."

Kashoo - Vancouver-based Kashoo has made its mobile application (especially the iPad version) an integral part of its simple service. As of early May 2013, it had more than 100,000 users -- and it counted almost 50,000 downloads of the mobile app. (There is also an Android edition.) Pricing starts at $15 per month; there are also some fees for the in-app services offered within the mobile application. 

Monchilla - Simplicity is the rallying cry for this service provider, which launched in 2012 and is being used by thousands of businesses (as of March 2013). The company uses recurring financial information that is already being generated by financial institutions and banks, and it includes a complete payroll module. The company is realistic, so it offers ideas for ways that you can integrate the service with Intuit QuickBooks. Or not. The pricing is simple: You pay $5 per company per month. "I use it to track expenses and invoices, run payroll through direct deposit, calculate monthly and quarterly taxes, reconcile transactions with our bank account and to run reports," writes Todd Storch, office manager with Rock Therapy Services, who contacted me after I requested a testimonial. "The ability to project your future bottom line by entering recurring (or estimated) income and expenses is a great feature that sets Monchilla apart from other accounting software."

Outright - The company was founded by two ex-Intuit employees, who were looking for one place to capture and organize the financial data for their own startup businesses. One of the top applications in the Google Apps marketplace, there are more than 200,000 small businesses using the software. The service was acquired by Go Daddy in 2012, and Outright delivers the behind-the-scenes bookkeeping for the Internet company's small-business customers. The basic service is free. Pricing starts at $9.95 per month if you want feautures such as sales tracking and reporting.

Less Accounting - The biggest plus of this very simple, free application is that it can be completed integrated with a Google Apps account. For example, it will recognize your Google Contacts database. Eventually, there will be paid add-on modules, but if you need something super simple to start, this service is one of the "most installed" services in the Google ecosystem. 

Wave - Wave Accounting is part of a family of cloud applications from a Toronto-based developer. It includes all the basic accounting features you would expect, including payroll integration, and can be connected to information from PayPal and Shoeboxed. The service is free, but there is a catch: You'll have to view offers from companies like Amex, Staples and Dell that are using it as a way to advertise their services and products for small businesses. 

Xero - There is a strong mobile component to this extensive set of core accounting modules, which include payroll, multi-currency support, reporting dashboards, and inventory insights. The multinational company has also been big on negotiating useful integrations, such as its relationship with payment processing service Stripe. Xero has more than 155,000 "paying" customers and 200,000 users in 100 countries. Pricing for small businesses starts at $19 per month.

Zoho - The Zoho Books service is just one in the Pleasanton, Calif., company's extensive suite of online applications for small businesses. It handles the tasks you would expect, including fees from financial accounts, unlimited invoicing, expense tracking, financial reports, reconciliation and multi-currency support. The subscription is $24 per month. (You can pay as you go, although you will receive a break if you buy a whole year upfront.)

Updated Aug. 12 to clarify developer for Less Accounting service.

Topics: SMBs, Cloud

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8 comments
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  • An interesting market is developing

    Accounting software as a service is developing as a very interesting market with the newer companies seriously challenging the bigger players on a product level.

    A promising upcoming solution provider is Clever Accounting which combines a flexible feature set with a straightforward interface. The problem with many desktop accounting systems is that they were not user-friendly and often they were expensive. This has all changed with the upcoming generation of accounting solutions. In the coming 3 years we'll have a better picture of the companies that will be leading the SAAS accounting software market.
    JeffreyRomano
  • Another Great option

    Bean Cruncher is also an up-and-comer in the cloud accounting options. It is faster than Quickbooks Online with functionality that rivals ACCPAC. www.beancruncher.com
    Simon Shaw
  • The most interesting aspect...

    is that a number of poorly informed and/or careless SMB owners are willing to trust their financial data to a known insecure environment. Again it seems that many are guilty of opting for convenience, as opposed to security. Personally, my financials will continue to be self contained, AND offline!!!!
    Willnott
    • if not informed ... keep options open ...

      I hear a lot of people that share your same concern. The cool thing about some of these new applications is that they are web-based (access from anywhere, mobile enabled, easy to upgrade, less expensive to troubleshoot/maintain, cross-OS compatibility). The potential problem is that many web-based solutions are delivered as SaaS-only, which means you need to rely on the vendor delivering the service - for as long as you own your business.

      Acumatica provides a web-based solution that can be delivered on-premise or as SaaS. When debating the merits of running on-prem/hosted/SaaS with clients, I get to present facts and let customers choose - because I don't have a vested interest in what they select. Customers select the solution that they feel most comfortable with in terms of security (some think on-premises and some think SaaS is best for security - but mostly they pick along the lines of whether they have an IT department).

      I highly recommend customers looking at a web-based solution - but select one that doesn't limit you to SaaS-only delivery.

      Regards,
      Doug Johnson
      Acumatica Sales Engineer
      www.acumatica.com
      Web Cloud
  • Australian Startups

    There are also some Australian companies making moves in this space: Saasu and Gem Accounts - both have hit the market here in Aus with mature feature sets suited to larger business and are getting some traction. Cloud accounting software seems to be the next big battle ground - will be interesting to watch it develop and see how the incumbents move.
    MikeOz2008
  • More Choices are Needed in the Mid-Market

    Heather, thanks for a great roundup of cloud accounting vendors.

    You state “The cloud accounting service providers might not have the legacy credentials that can be boasted by the big guys, but they are gaining traction …”

    Indeed. At a blistering pace in the entry-level space.

    Today there is a large number of cloud accounting vendors to choose from for companies just starting out. Prices are competitive, and the terms offered are simple and transparent. The customer is King!

    Unfortunately, the situation becomes more challenging as these companies outgrow their first accounting system and look at mid-market offerings.

    Talk about sticker shock.

    While entry-level solutions run a maximum of USD 2-3K/Year. Mid-market offerings start at USD 50K to and end up costing USD 100K+ when finally fully deployed. That is quite a price difference to digest.

    Further complicating things are the complex pricing schemes and terms of service that make it hard to figure out what these systems will eventually end up costing and how costs will escalate as the company grows.

    The reason for this is a lack of solution choices in this segment.

    As the 11 vendors on your list shows, it is literally raining vendors and product in the entry-level segment. That is not the case in the mid-market. One can count the available solution choices on the fingers of one hand.

    This lack of choice allows vendors to continue demanding outrageous prices, to offer complicated terms, and dated products.

    To justify this vendors tout ROI. But the fact of the matter is that ROI is in the eye of the beholder. Vendor projected ROIs are rarely if ever achieved.

    The problem is that for most small and medium sized companies, AFFORDABILITY is the more important consideration.

    The result is that growing companies with entry-level systems, more often than not, delay their move up to the mid-market, making do with manual processes, spreadsheets, shared logins, and internally developed add-on applications etc. for years. Till they are finally large enough to afford an expensive mid-market solution or just implode.

    However this is changing.

    Newer technologies, open source components. agile methodologies, and a focus on cost control, allow new generation vendors like Versaccounts www.versaccounts.com and Kenandy www.kenndy to offer affordable mid-market solutions that growing companies can deploy today.

    And price is not the only thing that companies like Versaccounts are changing. They are also changing the way mid-market cloud ERP systems are sold.

    For example, the Versaccounts solution is sold for a fixed price of $999/Mo unlimited users and functionality with live 24x7x365 support included.

    This gives customers the comfort of knowing that the TCO around their most critical business system will not change as the company grows.

    No contracts are required so customers can stop using the system at any time it stops meeting their needs. And implementation is for a fixed price of $10K. This is waived completely with a long term contract.

    With respect to channels, the business model is also ripe for disruption. Companies like Versacounts offer their channel partners 25-50% of subscription revenues in perpetuity.

    The entry-level accounting space is well on its way to being taken over by cloud based solutions.

    The mid-market is next.

    In the future mid-market vendors will need to get realistic about the price of their products and the terms they are offered under. This will happen as more solution providers enter the fray.

    The old ways of doing business will not be acceptable for much longer. The time has come for simplicity, transparency and fairness as a basis for win-win relationships between software publishers, channel partners and end customers.

    This in fact is the most important change that the cloud is forcing on all of us.

    Sunil Pande
    CEO, Versaccounts
    www.versaccounts.com
    Sunil Pande
  • have you checked out Replicon

    hey you have missed out Replicon in the list. Starting from the task management, project management, expense management, billing, invoicing, time management every option is there with the tool. Check out here - http://www.replicon.com/
    Robert Macklyn
  • Best for small scale users

    I find a lot of these packages are geared at medium to large enterprise users whereas a lot of people just need a very simple solution to manage their personal accounts. I'm a freelancer/sole trader and I've found Big Red Cloud http://bigredcloud.co.uk to best fit my needs. Its beauty is its simplicity and the fact it has just one flat low monthly fee is definitely a plus point.

    I'd be keen to hear what other one man bands favour for their cloud accounting
    JeffNevil