Firms spoilt for choice as software vendors battle for accountants’ loyalty

The balance of power is shifting in the UK software market, as increased competition means that accountancy firms can now afford to be choosy about where their loyalty lies.

Microsoft’s imminent release of an entry-level accounting software product in the UK, alongside rumours that it will time the launch with news of a dedicated network of accountants to market the product, will give firms yet another loyalty scheme to choose from, meaning the providers will have to up the ante to remain a preferred supplier.

The software giant already offers an accountants’ club in the US that offers incentives to its members and to those who recommend its products to SME clients.

Sage has seen the writing on the wall, despite leading the way in the UK with

9,500 firms signed up to its Accountants Club. It recently apologised to accountants for Sage’s ‘dismissive treatment’ of the profession. Enterprise software giant SAP’s strategy to work more closely with UK practitioners is just one more threat to its dominance.

‘The only company that could possibly disturb the status quo with Sage and Intuit is Microsoft,’ says Martin Minett, chairman of the IT users’ group at the UK200 group, an association of business advisers serving the SME sector. ‘Sage will have to react because Microsoft will attack them.’

Although around a third of all UK VAT-registered businesses use Sage’s software, the company relies on accountants to market its products to SME clients. Its club, which has been running for 10 years, has 9,500 member firms that receive discounts on software, access to business intelligence and user support as part of their membership.

Intuit, publisher of QuickBooks, and accounting and practice software provider Iris, both have successful loyalty schemes, with around 1,500 members each. Membership of Iris’s Plus Partner loyalty programme comes with marketing advice, support and free advertising, as well as £1,500 of free bookkeeping, PAYE and HR software. Unlike many of the other schemes, its software can be used by more than one user without an additional licensing fee.

In common with the other companies, Iris sells its products to firms at a preferential rate, allowing firms to sell to their clients at the full retail price to earn extra revenue.

Paul Booth, technical manager of the ICAEW IT faculty, says: ‘It makes sense for a firm to have its clients using a system that people in its firm are familiar with. It’s obviously more efficient.’

Minett adds that many accountants support more than one software system for their clients, since they eventually have to transfer the data into another package anyway. He says that most accountants will join all of the loyalty schemes, and that a firm would only be able to ask its customers to use a particular system if it did not have any existing clients.

But Dennis Keeling,

chief executive of software developers’ association BASDA, disagrees. ‘There are 500 different accounting systems and accountants can’t possibly be conversant in all of them. They prefer to use systems that they are conversant with.’

Although most loyalty schemes offer reselling privileges, Keeling believes it is less important to accountants. ‘That phase seems to have passed,’ he says. ‘They prefer to be impartial.’

Benefits of accountants’ clubs

IRIS Plus partner

Bureau versions of software worth £1,500 plus free upgrades; unlimited free technical support online

and by telephone; discounted training; preferential

discounts on software purchased on behalf of

clients; inclusion of firm in directory for clients.

Price: £450 (ex VAT) per year

Sage Accountants Club

Free single-user, single-company software; up to 25% discount on software for company use or for clients; technical support; access to business intelligence; inclusion of firm in directory for clients. Profile in directory can be raised by payment of £50 inc VAT per annum.

Price: £350 (ex VAT) per year

Intuit QuickBooks ProAdvisor

Free single-user payroll software; free software for resale; access to QuickBooks reference guide; training guide; newsletters; online forums; technical support.

Price: £340 (ex VAT) per year

Microsoft Professional Accounting Network

Currently available in the US only. Self-paced tutorials; online or CD-ROM; technical support (some of which carries a fee); exclusive MPAN website and newsletter; discussion groups; webcasts and events.

Price: not available in the UK