How to Buy Cloud Finance Apps
Finance and accounting (F&A) is one of the newest application categories to move to the cloud.
The cloud has invaded many areas of the enterprise, and recently it has been the turn of finance and accounting applications to become cloud enabled. It is now possible to run just about any finance function in the cloud. But is it wise, and if so, how can it be done to ensure that it does not compromise the security or performance of what are typically mission-critical workloads?
Rene Lacerte, founder and CEO of Bill.com, believes it is not only wise, but an essential element of organizational evolution. He points to the mountains of paperwork that typically weigh down an accounting department, even one with sophisticated in-house software tools.
It will take a move to the cloud to fully eliminate what are largely 19th and 20th century workflows from the enterprise, he said. "The days of overloaded file cabinets and towering stacks of paper are over."
Lacerte insists it is possible to go completely paperless with smooth and efficient electronic workflows that don’t rely on the postal service or overflowing inboxes. Once you move your finance/accounting to the cloud, he said, it makes no difference whether you have an in-house team or an outsourced team.
"The cloud allows anyone who needs access to connect, whether they’re sitting in the same room or halfway around the world," said John Shapiro, group product manager, QuickBooks Online. "This helps a business to maximize productivity by collaborating in the cloud with clients or bookkeepers, reduces paper invoices and receipts, and connects them with online banking so transactions are automatically reconciled."
F&A Features and Functionality
Lacerte cautions users to pay attention to the details. For example, accounting service should be able to incorporate supporting documents such as contracts and cleared check images.
"I can’t tell you how many times I tried to drill down on a profit and loss statement only to be stumped when I got to the original transaction and wasn’t able to see the actual invoice or supporting contract," Lacerte said.
Another important consideration is how well the cloud application connects with banking institutions. This allows users to have all the information they need, whether it is a vendor inquiring about a payment or the customer inquiring about a pending payment to them. With the speed of business today, online bank integration is a must.
Lacerte also recommends that users insist upon mobile-centric financial cloud services, which enable access to review bills, schedule payments and invoice customers from anywhere. Such apps should be able to work with any smartphone or tablet. A recent survey of Bill.com users found that over 70 percent rated the ability to access their data from a mobile device as a must-have.
There are other factors to take into account, as well. It is probably smart to find a service that integrates and syncs with popular finance apps such as QuickBooks for Windows, QuickBooks Online and Xero. Chris Farrell, CEO of expense management vendor Tallie, advises users to look for automated workflows that provide value in term of process simplification and integrate with existing accounting systems
Short List of Cloud Finance Apps
Financial applications giant Intuit is the parent company of QuickBooks. It has been expanding its online presence of late via its own software development as well as several acquisitions such as Check, which boasted 10 million users of its mobile cloud-based bill paying service. Intuit offers a wealth of tools. But there are plenty of other cloud-based financial options now on the market. While this is far from a complete list, here are some of the more popular ones.
Bill.com is a network with over 500,000 members paying and getting paid over $12 billion annually. The service works with existing accounting software to eliminate paperwork, save time and save money, said Lacerte. He reckons it cuts more than 50 percent of the time typically spent on back-office operations such as paying bills or invoicing customers by automating these processes. It offers electronic bill pay, automated approval flows, electronic invoices and online document storage. Monthly plans start at $19 per user.
Intuit Online Payroll boasts over a million businesses using it. It enables them to create paychecks, make direct deposits, manage and pay federal and state taxes, and prepare W-2s. The monthly fee is $20 for Basic or $28 for Enhanced, plus $2 per month per employee.
QuickBooks Online is the top cloud accounting solution for small businesses. The company has been expanding its range of functionality to make it the world’s small business operating system, said Shapiro. "Small businesses save time organizing their financial data in one place – anytime, anywhere – with no accounting knowledge necessary," he said.
Users can access their data on any Internet-connected computer, iPhone, iPad, Android phone or tablet. Since it is a Web application, there is no need to back up files. It also provides regular updates and improvements to the service at no additional cost. It is customizable, and a 30-day free trial is available. Users can integrate Intuit Payments and Payroll into QuickBooks, enabling them to invoice customers and pay employees.
QuickBooks starts at $12.95 per month. QuickBooks Enterprise is also available, although it lacks the popularity of QuickBooks Online. SMBs that expand beyond QuickBooks Online will likely gravitate toward the enterprise version.
Tallie’s cloud-based expense management system is said to provide the quickest path from receipt to balance sheet. Both QuickBooks and Bill.com partner with them to meet the need for a systemwide cloud-based financial ecosystem.
"Tallie is cloud-based business expense report automation software that streamlines the expense management process from point of purchase to accounting and reimbursement," said Farrell. "It eliminates the pain of manual expense report processes by automatically capturing, categorizing and processing expense transactions and integrating seamlessly with leading accounting systems."
Tallie uses activity-based pricing, meaning that fees are incurred based on use of the product. That works out at $9 per user, per month. The minimum per month is $25.
Other useful cloud-based financial apps include:
- SmartVault (document management)
- Avalara (tax automation)
- Officengine (automatic backoffice)
- Mint (account management and budgeting)
- FreshBooks (accounting)
- Chargify (revenue and customer lifecycle management)
- Expensify (expense reporting)
- FinancialForce (Salesforce-based accounting and professional services automation)
- Xero (accounting)
- Intacct (accounting)
- NetSuite Financials (accounting)
- ADP (payroll)
Some businesses will insist in continuing to use in-house-based financial software for many years to come. But over time, more companies will transition some or all of their financial systems to the cloud. As well as lowering cost, some believe it improves internal efficiency if you select the right tools.
"Make sure you are running the most efficient and effective operation possible by leveraging the wide range of cloud-based solutions available today," said Lacerte.
Drew Robb is a freelance writer specializing in technology and engineering. Currently living in Florida, he is originally from Scotland, where he received a degree in geology and geography from the University of Strathclyde. He is the author of Server Disk Management in a Windows Environment (CRC Press).