Reckon sees silver lining in being last to cloud

Agnes King for BRW writes: Listed accounting software maker Reckon is throwing its money into mobile and says being late to the cloud computing party has allowed it to learn from others’ mistakes.

“We will continue to work massively on mobile,” said Sam Allert, managing director of the company’s accountants group, which generates roughly 40 per cent of Reckon’s $98 million annual income.

The group also believes its recently acquired syncing technology – which it claims lets accountants convert any accounting software program into a cloud-based product – will be “a game changer” for accountants.

The syncing product is due for release by June. It is being tested by four Australian clients.
Reckon, which has a market ­capitalisation of $251 million, has completed an 18-month restructure of its operations, triggered by its split with United States software vendor Intuit.
The restructure tidied the group’s various divisions, reduced duplication, and brought isolated product teams into a shared services model.

Reckon promoted long-time employee Nigel Boland to group chief technology officer in an effort to ­consolidate its research and ­development investment.

It hopes the simplified model will weld customers to the Reckon brand rather than individual products, which some argue has impeded its share price growth in the past, and created ­confusion in the market.

It needs whatever edge it can muster to do battle in what Mr Allert admits has become “a much more ­competitive” space.

Some argue the decline in Reckon’s share price – from a high of $2.68 in 2011 to around $2 now – is linked to its inability to articulate a clear strategy following its divorce from Intuit.
Rival MYOB and new entrants Xero and Saasu have been making a ­cacophony in the meantime.

Reckon is also the last of these four brands to release its internet-based accounting software, ReckonOne.

These so-called “cloud-based” software products are boosting accountants’ and book-keepers’ productivity and in many cases completely altering relationships with clients by allowing advisers to offer consulting services and business insight.

“There’s never been a bigger period of change and opportunity for the accounting profession based on the technology available to them,” said Mr Allert.

Reckon’s renewed push comes as Xero – which is not yet profitable despite reaching a market capitalisation of NZ$3.46 billion – announces a new joint initiative with Commonwealth Bank of Australia’s New Zealand subsidiary, ASB Bank, to simplify business-to-business payments.
A seemingly small deal, the announcement is emblematic of how tightly integrated accounting and online banking systems are becoming. And there is a feeling tax authorities and share registries are not far behind.

“This is the beginning,” said Xero banking and payments expert Matt Vickers. “Our aim is for internet banking to be more closely integrated with accounting to remove friction between each” he said.

“Data still remains under customer control, but friction between financial analysis and decision-making and ­taking action is eradicated.”