Why your accounting software vendor is delusional !

I just saw a blog post over at Reckon talking about “Using your accounting software to gain customer insights”  which describes a typical accounting software/accountants view of where they sit in a business.  And it’s wrongCompletely, utterly wrong.

I’ve been working with businesses in Australia and around the world for 20 years and I have yet to meet with any business where they view their accounting system as “The center of the universe” as far as their business is concerned – with three exceptions:

  • My Accountant.
  • My Bookkeeper.
  • Accounting Software vendors.

Accounting companies seem to be working under the misapprehension that they are the most important business system in place at an organisation.  It’s clear in the way they communicate, and it’s clear in the way that they position their software and talk with their users.  If that’s really the case though, why have I never seen this at any of the hundreds of businesses that I have worked with ?

delusion

It reminds me of the 90’s during the first attempt to start the mobile internet when Telstra thought that consumers would put up with a “Walled Garden” where you could see what Telstra wanted you to see, through Telstra’s portal.  Everybody laughed at it, and poor Telstra wondered why nobody wanted their mobile horoscope.  It’s just delusional, dinosaur thinking.

I don’t intend to denigrate any particular vendor here, but with few exceptions (Xero) they appear to persist in the illusion that business views them as the most important business system, when really they are a commodity.

If we talk about Reckon’s post for a moment, they miss the mark massively.  For a start, accounting systems record what has already happened.

They don’t record pipeline, they don’t record opportunities, they don’t interact with third-party business systems to present a comprehensive view of data, they don’t interact with the excel spreadsheets and access databases that hide like rattlesnakes in every business – so if they don’t contain the data, how can they give true insight ?

One of our clients said that “all he has to do to see how his business is going is to look at the shared calendar in Outlook“.  If he looks at the calendar, and all of his consultants are busy – then he knows that this will mean revenue.  None of this insight is available in his accounting system at all, and never will be – until the revenue is booked – in which case, it ceases to be insight and becomes hindsight.

receding-row-of-four-long-range-binoculars-perspective-faces-370x229

Another of our clients can look at their Google Traffic and Google Analytics – and they know, based on the number of visitors to their web sites who complete web forms, just how many loans they can expect to settle in the next xx days (where xx is the average time from a new home loan enquiry to settlement).

Some time after settlement , a commission statement comes from the bank – which is then imported (via another third party system) into their accounting system where it can be used for (h)in(d)sight.  Most of the data which could be used to generate insights is generated elsewhere.

I’m not saying that the accounting systems contain no useful information – that would be absurd – and many businesses can get useful information from them, but the continued perception of accounting vendors that their software is all you need has to stop!

Accounting Software is a commodity

Both MYOB and Reckon have been very, very slack in getting their new API released to partners for new versions of the applications and for their cloud and hosted platforms.    It is a huge strategic mistake not to focus on the API so that the partners can interact with these systems in a meaningful way.

Xero gets it.  They provide the basics, plus an API – and they have a thriving developer community which solves all manner of business problems.

There are Business Intelligence vendors out there who could take the data in MYOB/Reckon/Xero/Excel/Website/Google and all of the systems a business uses and provide real insights – but only if the accounting companies have an API that lets them do it.

Accounting software is a commodity.  It’s something to store sales and payment records, do your BAS, manage your payroll, track holidays and how much super you owe.  It’s a compliance system.   When I encounter clients running the “wrong” version of accounting software (e.g. hosted MYOB, MYOB without an API) then I simply advise them to change – and they do.  After all, it’s only what they use to send invoices – it has no strategic value to them whatsoever.

Reckon, MYOB – wake up!   Get some focus on your API before Xero and other more nimble vendors finish eating your breakfast, and start on your lunch!

2 thoughts on “Why your accounting software vendor is delusional !

  1. Eve Blackall

    Mike – a refreshing point of view (albeit a slightly rabid one).

    I agree that accounting software is lagging behind in what it could do – I hope to see a panacea that ultimately saves time, avoids double entering data and delivers clear info.

  2. Mike Nash Post author

    Hi Eve,

    My point was more that accounting software can’t , and shouldn’t even try to do these things. That is more properly the function of CRM or ERP software and is often the function of the dreaded excel spreadsheet!

    If you take a peek at Tall Emu CRM you’ll see what we can do – use CRM data in conjunction with accounting software (MYOB, Quickbooks, Reckon, EXO are fully supported – Infusion, emPower and Xero are under development).

    Our reports let you analyse the whole business – including projecting forward. I have a report that I receive every day at 6pm. It shows me all sales for the day, who made them, who the client was. It shows me the total AR, and it shows me sales projections for the current month and next 6 months based on CRM data.

    It arrives completely automatically in my inbox, no human intervention required. Many of the reports that you have over at your website could easily and automatically produced with our software too.

    Mike

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