CPA Practice Advisor - 7

FROM THE TRENCHES

■■Entries in Classes & Locations is
limited to 40, combined
■■Billed users are limited to 1 in Simple
Start, 3 in Essentials, and 5 in Plus
■■Existing subscribers who exceed
these limits are "grandfathered," and
no additional items can be added
■■Deleted/deactivated items do not
count toward limits
■■Subscribers who need additional
capacity should consider Advanced
Sage Business Cloud (SBC) is
the recently re-branded Sage One
service. SBC is designed for small
businesses with relatively simple
accounting needs. Like QuickBooks
Online, SBC is available in multiple
subscription models: Sage Business Cloud Accounting Start and
Sage Business Cloud Accounting.
In addition, subscribers can access
SBC through mobile apps for iOS and
Android-powered devices.
The strengths of SBC include:
excels at fundamental transaction
tracking, simple, clean interface,
solid mobile app for iOS and
Android-devices, ecosystem of apps
to handle most tasks/routines not
handled by SBC. Potential issues
include: Relatively small market
share, meaning most users will
have no prior experience with the
tool, designed for only fundamental
accounting; no support for purchase
orders, recurring transactions, job
costing, etc.
Xero has been making in-roads
in the U.S. market. Founded in
2006, Xero is a New Zealand-based
company that provides cloud-based
accounting solutions worldwide.
Recent major milestones include:

migration to Amazon Web Services
in 2017, over 600 certified connected
apps, first full-year positive EBITDA
in 2018.
Xero differentiators include:
monthly subscription prices are
for an unlimited number of users,
a recent change in payroll (now
provided as an add-on service by
Gusto) formerly was included in
subscription, full-service payroll is
available (but not included) for all
50 states at $39 per month subscription, plus $6 per person, per month.
Xero has a very strong set of tools
to support external accountants/
bookkeepers including Xero HQ, Xero
Practice Manager, Xero Workpapers,
Xero +C, and Xero Cashbook/Ledger.
But like all products, there
are strengths and some potential
issues. Xero strengths include
ease of use, affordability of plans,
robust accounting functionality, rich
ecosystem of 3rd party apps, and a
strong support program for external
accountants and bookkeepers. Potential issues include that compared
to QuickBooks Online there are
relatively small number of users
in US, meaning team members in
newly-adopting companies will likely
require some training. Additionally, some terminology used in the
application still requires localization.
To give one final example,
consider Zoho Books. Zoho bills
itself as "the operating system for
business" and has put together a
portfolio of approximately forty
integrated cloud-based apps to assist
business professionals in running
every aspect of their business. Six
of these apps - Books, Checkout,
Invoice, Subscriptions, Expense,
and Inventory - provide a very
robust set of features on which
an entire accounting and finance
department can base its operations.
Zoho has been in business since 1996
and currently has over 25 million
subscribers worldwide. Books is the
true "accounting" app in the Zoho

portfolio. Among the strengths of
Books is the ability to customize
the app rather extensively. Transaction entry and processing closely
resembles that found in many other
cloud-based solutions. Of course,
bank feeds are a central component
of the Zoho experience, and several
pre-built feeds are already in the
app. Reporting options are solid
too, including the ability to schedule
reports for distribution.
While the story of Zoho is better told with their suite offering
of ZohoOne, Books and the other
five accounting modules have good
capability at a reasonable price
point. Like all products there are
strengths and potential issues. Zoho
Books strengths include surprisingly
sophisticated functionality, very
affordable, very customizable/
configurable solution to meet the
needs of many businesses, and an
outstanding ecosystem of "native"
apps for integrations. Potential
issues include most new users will
require training, job/project costing
capabilities are not fully robust, and
although there is some integration
with 3rd party apps, it may not be
strong enough for some companies.
Every product named at the
beginning of this article deserves
just as much attention as the
products we used as illustrations.
Further, we have not spoken about
reporting tools, sales tax, payroll
and many other key features of a
complete small business solution.

ARE THE PRODUCTS AND
THIRD-PARTY APPLICATIONS IT?
Small business accounting buyers
will often choose these products
from the open market and expect
their CPA firm to provide guidance
and support. With so many products
in the market, it just doesn't work
that way. While most CPA firms are
not in the habit of analyzing and
recommending software, you may

JULY 2019 ■

need to do this work to choose a
product that works for your firm and
that you want to use with clients. As
we have covered in prior columns,
Client Accounting Services (CAS)
practices require a complete set of
tools and methodologies for success.
While you can use a small business
accounting tool such as QuickBooks
Online for CAS, you are almost
certainly going to need additional
third-party tools to complete your
offering. Further, implementation support from the publishers,
understanding appropriate setup
and having the ability to discover
tools to complete a solution certainly
provides client benefits. In the past
week, we have recommended distribution, manufacturing, budgeting,
and reporting tools to help both
industry businesses and firms complete the needed business solution.
While internet searches may provide
some answers, only occasionally do
they provide the best answer.
Further, some clients will need
capabilities that small business
accounting software just can't provide. You'll have to use your judgment
when you are trying to force fit a
product inappropriately into a client's business about the appropriate
time to stop or to give up. While we
have seen small business accounting software used inappropriately
in larger businesses, the costs and
complexities of upgrading are also
an issue for business owners and
public practice professionals alike.
On the other hand, it wouldn't be
unusual for a client to try to make
a product work and it just won't get
the job done. That's when they wind
up on your doorstep asking for help.
Understanding what to do when
you or your clients have outgrown a
small business accounting application
presents another whole set of needs
and a separate column on those
solutions. ■

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