Millions of small businesses use Intuit’s QuickBooks. However, there’s a few dozen other accounting / bookkeeping programs on the market including Sage’s Peachtree, Cougar Mountain Software, Everest, NetBooks and others.
Intacct has positioned itself as the accounting solution for companies who have outgrown QuickBooks.
Dan Druker, Intacct SVP Marketing and Business Development helps us understand more about Intacct’s solutions in this short interview:
Why did Inc. say Intacct was the best for replacing QuickBooks?
It’s really all about growth. Growing companies reach a point where multiple people have to collaborate on financial processes, often from multiple business locations as well as from home and on the road. As multiple people become involved, everyone needs visibility into what is going on so they can make the right decisions and collaboration so they can all work together. As an on-demand system, Intacct is designed to be accessed anytime, from anywhere there is an Internet connection available, so people can share in the financial process – this is a big difference from entry-level systems.
Inc. also found that growing companies know that they need to professionalize and scale their financial operations. Intacct is a real financial management system that’s easy enough to use that very small companies are working with it, but robust enough that public companies are using it too. As companies grow they need business controls and security because risks of financial exposure and cash flow problems and temptations like fraud increase as the financial volumes do. And as business velocity increases, Inc. noted that the automation built into a system like Intacct can start to save a lot of time and expense too.
It appears that many small businesses are still using traditional software applications for financial management, why aren’t more using SaaS applications?
SaaS is a movement that’s really just getting started. It’s got tremendous momentum but it is important to remember that the whole industry is less than ten years old. It took the success of a company like salesforce.com to help people get over the fear of running even a relatively self-contained application like CRM on the Internet. Now that businesses are becoming comfortable with the SaaS model and the compelling benefits it offers them, they are starting to look to other applications like financials in growing numbers.
As far as financials are concerned, it takes both a long time and a huge investment to build a robust financial system that small businesses can count on. It’s just got to work. At Intacct, we’ve spent more than $60 million dollars and seven years to build deep and mature applications that really work. So SaaS adoption for financials is really driven by the readiness of the finance department to embrace the SaaS model combined with the availability of really great products like Intacct – and all this takes time.
In 2008, there are really starting to be some good SaaS choices for small business financials. Intuit is helping to unlock this market with QuickBooks on-line, and NetSuite’s very successful IPO has delivered significant visibility as well. At Intacct, we’re experiencing tremendous growth, with 70% of the subscribers in the whole history of our company signing up in just the last fourteen months. So for SaaS financials, we’re really just at the beginning of a very long journey. The good news is that at Intacct, we can point to thousands of happy customers – and nearly 90% of them tell us they would recommend Intacct to their friends. That kind of growth coupled with that level of success will help fuel the transition to SaaS over the next few years.
What are some indicators a business can use to know if they have outgrown their current financial application?
There are many growth-driven indicators – when multiple people need to have access to the financial system, when financial tasks need to be delegated, when dollar volumes become significant and when new offices are opened – it’s time to think about graduating to a more powerful system. There are also brick walls that require you to graduate – when you need to operate in more than one currency, when you have more than one business entity, if you need to work effectively from multiple locations or when you need to deal with specialized requirements like revenue recognition or managing the profitability and utilization of billable services personnel.
Most businesses know when they’ve outgrown their application – what’s been holding them back is often that they didn’t used to have cost effective alternatives. They might have been paying a few hundred dollars per year for QuickBooks and would have faced a total annual cost of $100,000 or more to purchase, implement and operate a traditional mid-market software application. That’s why Intacct and the SaaS model is so appealing – you can get up and running quickly and inexpensively. Last year, more than 98% of our new clients successfully went live, the vast majority within three months of signing up with us. You won’t see those numbers from the traditional mid-market solutions.
Do you find that your customers are using no accounting program when they come to you – maybe they are using paper or at the very least Excel – or is most everyone already using a competing accounting product?
New customers come to us in several ways. The vast majority of small businesses that reach out to us directly already have QuickBooks and are thinking about graduating to a more substantial solution. We really aren’t trying to compete with Intuit to be the first accounting system that a small business owner uses – Intuit has done a nice job and QuickBooks is a great product for this. These companies are often using a lot of paper and a lot of Excel on top of QuickBooks, and getting rid of this is one of the things they like about a more advanced system like Intacct – no more spreadsheets and no more working outside of the system.
We also have a large number of business partners that specialize in serving small businesses, including offering Intacct as the first system that small businesses use. Many of our business partners are either CPA firms or a relatively new kind of company called financial outsourcers. The CPA firms will typically work with the finance department of a small business, while the financial outsourcers will take on the responsibility of most or all of the finance department functions. These firms use Intacct to manage the financials for their clients, and they absolutely do seek out and provide services to very small firms that have never had a financial system before.
Financial management is only one part of what a small business needs in their business; they also need marketing, HR and sales management tools. Can you speak to this need and compared to what Intacct does or does not offer?
This is a great question and it’s very perceptive. Small businesses need to solve their business problems, department by department and when their need is the most acute. No department head wants to compromise. So they want to make best of breed purchasing decisions, one at a time when the need arises for a particular system. But at the same time small businesses don’t want to have islands of information – it’s important that their systems work together so they aren’t wasting time entering data twice or introducing errors and inconsistencies.
Intacct believes that with Software as a Service, small businesses can choose best of breed systems that work together – as opposed to an all-in-one suite. This is possible because with Software as a Service the different vendors often take the responsibility of making sure their applications work together – whereas in the old days of traditional software this was always an exercise left to the student. So Intacct is a specialist in on-demand financial applications, but we also work with our partners to make sure our applications work with their SaaS applications too – like salesforce.com for CRM; OpenAir for professional services automation; ADP, Paychex and Compupay for Payroll; Adaptive Planning for Budgeting; LucidEra for business intelligence; Boomi for integration, and many more. This ecosystem allows companies to choose the solutions that work best for them, instead of being locked into a single suite.