Savings see accountants move online

Savings see accountants move online

Sage's entry into the online accounting market stimulates competition

Online accounting technology uptake is set to boom in 2006, with
practitioners looking to the internet to help drive revenues and save costs.

With Sage announcing its entry into the online accounting market, interest in
using the internet to work with clients is increasing among practitioners, and
providers are clamouring to gain a share of the growing market.

Sage launched Sage Hosted Solutions at the end of last year, claiming that it
allows practices and their clients to share information in real-time over the
internet.

Based on Line 50, it has been trialled online with a number of firms, and is
set to launch in 2006. Users will be charged a monthly fee of £44 for Line 50
Accountant.

Sage confirmed there will be an initial one-year contract, then a monthly
rolling licence.

Brendan Flattery, MD of Sage accountants’ division, claimed the move was part
of the company’s strategy to link accountants, clients and other relevant
third-party organisations.

But Goodman Jones LLP, a practice based in central London, has extolled the
virtues of using a web-based accounting application by Twinfield.

GJ business systems partner Philip Woodgate believes the profession is crying
out for a better way to collaborate with clients. ‘You can’t beat sharing the
same data, it’s got to be easier this way,’ said Woodgate.

Twinfield’s application is based on the software as a service (SaaS) model.
The accounting application is built bottom-up specifically to operate on the
internet. It requires no software implementation on practitioner/client
desktops, and provides real-time access between both parties to their accounting
information.

One of the big advantages of this model is that there are no implementation
costs, and practices are not tied down to long-term service licence deals.
Instead the service is based on an ongoing subscription.

Industry commentators have suggested that SaaS is a more attractive propositi
on for users than working on an existing product such as Line 50 through the
internet, due to its custom-built nature and lack of licence costs.

Woodgate said that cutting out software maintenance costs was a ‘big issue’
for practices, and SaaS crucially enabled the firm to provide more
forward-facing business advice to clients rather than just historical
bookkeeping services, by having up-to-date client data shared between both
parties to hand.

But Rob Lambden, MD of internet-based accounting provider Online50, refuted
that already-built applications hosted via the web are not as attractive as
SaaS.

Lambden argued that his company provides the same level of service to users
as SaaS providers, and Sage’s own entry into the market would stimulate growth
for both models. ‘The market will grow bigger than the share they take,’ he
said.

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