Accounting Software is Still Shit

Revolutionary. It’s not, yet.

The Status-Quo

Over the past seven years I’ve worked for a few accounting applications (More, Crunchers and KashFlow.) They, and our competition — Xero, Freeagent, etc — all focused on the small business market and were relatively successful. They fought the old incumbents, targeted at accountants but poorly repurposed for small businesses, and they made it easier to do accounting.

They succeeded with this goal successfully garnering multi-million pound turnovers and in Xero’s case a whopping, bubble defying, 3.82Billion (NZ$) valuation.

Attaining customer approval is relatively easy. Chances are their experience to-date has been dire, using those accountant focused programmes of yesteryear or mangling a spreadsheet to make it do what you want. An improvement over that can’t be that hard to achieve. And they succeeded and then stopped. Yeah, they’re adding new features but they stopped. Halfway through the revolution.

To complete the revolution you need your users to do less accounting. Eliminating as much data entry as possible and automate as much as is possible. And eliminate the need for a personal accountant. And Crunch, the online software+accountant isn’t the solution either.

The software as it stands makes the accountants job easier. And most small-business owners don’t get value from the ‘value added’ services accountants offer. Accountants are there to make sure your compliant, paying the right amount of tax (not to much, not to little) and broadly, then, they can get out of the way.

Proposal

Here’s how I think you can complete the accounting revolution.

Artificial Intelligence

Use bank feeds to collect data and then use the information of your customers to automatically enter the suppliers invoice information. Then get the user to approve the entry and it’s done. The more users, the more intelligent the system will be.

The key here is to automate as much as possible. If you add a supplier and call it BT — the web app knows who that is. Automate the rest of the process. If I enter an invoice to someone for the second month in a row for the same thing, ask me if I want to automate this process. It’s not good enough having a ‘repeat invoice’ function, you should ask me if I want to automate it.

Automate the Accountant

Interacting with an accountant at the small business level is a chore. Why can’t I just click a button and an accountant can give me advice, answer a question. All at a flat fee billed to me instantly. I press a button, get advice from one of your network of accountants, pay my £20. Everyone’s happy.

In fact at every step where an accountant can be asked to review something (VAT Return, IR35, Tax return) there is a button where you can get the accountant to review it at a set fee. Put the business owner in charge. Not the accountant.

Automate the Inland Revenue

A few companies are starting to do this, almost all packages offer VAT return submission and some offer IR35 submission. This process is far from seamless though. With the above accountant automation and really nailing the user experience of the submission to HMRC this will really save the small business owner a lot of time and frustration.

Business Dashboard

Currently, if you log into any online accounts package you’re presented with a dashboard. But it’s always an accounts dashboard. Guess what? NO ONE CARES. Profit and loss, bank balances and are displayed for the last year. I want to know what’s going on right now. Which suppliers need paying, which invoices haven’t been paid. Some are making improvements here but there’s so much that needs to change. That dashboard should change from day to day not month-to-month.

Payments

Payments to suppliers and payments to the business owner need to be automated. This needs to be fundamental. Not opt-in with an integration. You can opt-out but the core should be that I can press a button, enter my password and pay a supplier. It’s iTunes one-click-purchasing for businesses. And customers of your users should be able to log in and pay by card or direct debit. This is made really really easy by Stripe and GoCardless. But integration isn’t good enough. It needs to be in the core of the product.

And that’s it. It’s not an easy task, by any means. But there’s a lot of customers who would move for a product which can seriously cut down on their accounting time and deliver more value than there is at the moment. The above could be done by the existing online accounting products but it likely won’t be. Most customers aren’t crying out for these features because they don’t know they want them.