Sage / Xero This Week: Accounting Today

Seth Fineberg for Accounting Today writes: A few key additions came in the cloud accounting arena along with a couple of noteworthy tech consultant moves amounting to a pretty busy week, even with the holidays around the corner.

One might think it would be relatively quiet news-wise this time of year, but several vendors and accounting/ERP consultants felt it was time to make (and announce) some moves that will have significant impacts on them in the new year and beyond. Here’s my take on it all:

News: Sage North America released an accountant edition of its entry-level cloud accounting product, Sage One. The Accountant Edition is free for accountants to use and will feature regular updates at least two times per month. Key features of the product include complimentary account access for the entire firm; unlimited user access and support; opportunities to win new clients, including client discounts; reduced data entry due to bank integration; and one login access to all Sage One clients.

My Take: For one, this is Sage following through on a promise made several weeks back when it said it wanted to have more products specifically for accountants; in fact, the company formed a specific business unit to do so.

The thinking behind this product is that, even though Sage One is primarily designed for truly small business, sole proprietors and independent contractors (i.e., 1-9 employees) these users still need an accountant to work with. As such, Sage wants them to be able to work with them more collaboratively and has built in features designed to do just that.

In addition, Sage is looking to connect more small businesses with the right practitioner and plans to do so via this product. Xero has had a similar plan in place with its product for some time as well.

Sage also promised more accountant-focused products to come by this summer so we’ll see, but for now this is the first logical step in that they are creating an accountant version of something already on the market. Now, as for these yet-to-be-named products, whether they will be cloud-based as with Sage One remains to be seen but we’ll keep an eye out.

News: Xero has officially released an integrated payroll offering as part of its cloud accounting platform, just months after announcing a beta version. While Xero still has third-party payroll relationships with ZenPayroll and SurePayroll, the integrated product is designed to be a seamless single accounting and payroll offering that automatically updates the general ledger, tax calculations, and tax alerts/filings, and provides employees easy access to their payroll information.

My Take: Here’s another one from the “We told you we were doing this and now it’s here” files. Xero has been building its own payroll offering for quite some time now and has been bursting at the seams to let everyone know about it as soon as it was ready for prime time. Back in September during its Xerocon user and partner event in San Francisco the company gave attendees a hint that it was on its way, offering a brief overview of what they’d see and even some beta testing.

Well, this week was the official unveiling of Payroll for Xero, which will allow users to access a fully integrated payroll product, which right now can be used in six states with more on the way likely through next year. And of course if that doesn’t work for Xero users, present or pending, they also can go with the third-party payroll relationships Xero already has.

It’s no surprise that having a payroll offering -- integrated or working with an existing accounting product -- is a big deal for firms. Look at all that’s out there on the market and you will likely see some kind of payroll partnership or internal offering. Heck, even Paychex -- one of the biggest payroll services in the country – decided that rather than waiting for the next cloud accounting vendor relationship to come its way it made a significant investment in Kashoo and rolled out its own branded cloud accounting offering (powered by Kashoo, of course). I had mentioned previously that it’s likely not going to be long before Kashoo will become a part of Paychex, much in the way SurePayroll has.

And, not to be outdone, Xero’s self-professed nemesis Intuit announced (albeit more quietly) that one in 12 Americans gets paid via Intuit’s payroll offerings and they have spent the last several months seamlessly integrating their online payroll into QuickBooks Online. Now within QBO, users can start paying employees in just three steps, right within the product.

Let the accounting/payroll battle continue!