A few years ago there were a number of potential winners in the cloud accounting market – “cloud” basically meaning software and data that’s stored on a third party server rather than at the user’s premises. Here in the UK at least, it looks like Xero are the winners in cloud but also potentially in the accounting software market in general. The financial resources they have, together with the commitment to the UK market are quite compelling.
There are still good reasons why people might still choose desktop products like AccountEdge or even Sage but the trend, for the small business market at least, is definitely to move to cloud and Xero in particular. The key reasons for this, to me at least in no particular order, are:
⁃ Bank feeds; bank payments and receipts are sent directly into the software by the bank
⁃ Data capture software add-ons that effectively eliminate manual entries; products like Dext (ReceiptBank), AutoEntry, HubDoc, and Xero itself, to an extent, can extract information from accounting docs like supplier invoice and push that information straight into Xero
⁃ Access from any web browser on any kind of device
⁃ The ecosystem of software add-ons such as cashflow and analytical tools that take data straight from Xero
⁃ Other emerging FinTech products that, for example, allow lenders to access your data in Xero to make lending decisions
⁃ The collaboration that they enable between client and accountant
– “Single ledger of truth” as Xero call it, meaning all accounting entries are included in one data file: entries made by the business and by the accountant. In contrast to desktop software were the accountant very often works on a separate copy of the file
The purpose of this site isn’t to try and replicate in any way the extensive and comprehensive support that Xero themselves provide but simply to pick out a few key things that might be of some help to our clients based on our, and their, experience.
Jonathan White – February 2022
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