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- SaaS on the rise
- SaaS a key part of financial consolidation
- SMBs embracing SaaS financial management software
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- 1. - Security and SaaS applications for financial management
- 3. - SaaS financial management software adoption and implementation
"Small- and medium-sized business customers no longer run their businesses on the IT equivalent of duct tape and bailing wire," Tim Harmon wrote in an October 2011 Forrester Research report Demand Insights: The SMB Software Market. "Today's SMBs mirror larger enterprises in software adoption trends, albeit on a smaller scale."
A year after the report, Harmon's statement is proving to be accurate. As more large companies invest in Software as a Service (SaaS) financial management software, QuickBooks Online is allowing small businesses to ride the cloud computing wave as well. And if subscriptions are any indication, small and medium-sized business (SMB) owners are jumping at the opportunity.
"Over the last two to three years, we've seen the industry shift fast to Online," said Kevin Kirn, group product manager for QuickBooks Online. "We now have 36,000 subscribing companies -- and [those are] not users, because each company has more than one."
Kirn added that Intuit, the Mountain View, Calif.-based maker of QuickBooks, is investing heavily in cloud infrastructure and has plans to shift from a desktop software to a cloud-focused company.
However, small businesses are also mirroring the trends of larger businesses in another, less positive way: Business owners are sometimes hesitant to transition their financials to the cloud due to data privacy and security concerns.
SMBs take advantage of the cloud, mobile
"More and more companies are going to the cloud, and it makes a lot of sense for small businesses," said Laurie McCabe, co-founder and partner at SMB Group, an analyst firm located in Northbourough, Mass.
The reasons McCabe listed for why SaaS financial management software is becoming more appealing to SMBs are similar to those cited by larger companies, such as easier upgrades and a subscription payment schedule -- what she described as an "easy on, easy off" model.
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Kirn said access is also a consideration. "The fact that it's in the cloud is a big reason why people choose this product. They get "anywhere, anytime" access, and they don't have to worry about setting up servers or dealing with crashes."
But Stacy Kildal, an accountant and QuickBooks ProAdvisor, said her clients often struggle with data privacy and security concerns. "I ask, 'How do you transfer your data files back and forth to your accountant right now -- do you email them?' That's so much less secure than this is, and they don't understand that. Some don't even have a password for their desktop files."
Kirn said the unease is due to the newness of cloud financial management software. "It's largely an education thing, and it's understandable -- people are nervous about the march of technology," he said. "But frankly, the cloud is way more secure than having information sitting on your desktop computer."
QuickBooks Online also offers mobile capabilities, which McCabe said SMBs are keen to take advantage of. "That's in line with what everybody's trying to do -- in other words, every enterprise business software company worth their salt is adding mobile capabilities."
Apps help SMBs venture into CRM, project management
Harmon also noted in his report that SMB interest in customer relationship management (CRM) was on the rise. "CRM is an area showing substantial growth potential, with just more than 30% [of SMBs] planning new or additional CRM investments in the next 12 months," he wrote.
Kirn explained that QuickBooks Online attempts to cater to this demand through the use of integrated third-party apps. In the Intuit App Center, users can connect the financial management software with CRM, project management, expense management and appointment scheduling plug-ins. Notable apps include Salesforce for CRM and Mavenlink for project management.
These apps make it feasible for medium-sized companies to use QuickBooks Online, according to Kirn."We're finding that the majority of businesses can use the software with some of these apps -- even larger businesses with more complex needs."
However, McCabe pointed out that since there aren't as many integrated apps available for QuickBooks Online as there are for the desktop version of the software, the latter option might still be the better one for the time being.
"I think the drawback of Online is that it doesn't support as many integrations as the desktop edition does, simply because the desktop edition has been around for so long," she said. "If you use certain apps that integrate with the desktop software and don't yet integrate with QuickBooks Online, then that's a reason to stay with the package version."
McCabe also said that even with the apps in QuickBooks Online, the product isn't a one-size-fits-all financial accounting software. "The software's going to run out of horsepower at a certain point because as a company grows, it needs to do more."
SMBs go global with new customization options
Intuit recently announced new global capabilities of QuickBooks Online. "Highly customizable content makes QuickBooks Online local everywhere, helping the world's small businesses and accountants quickly get set up and running their business anywhere in the world," Dan Wernikoff, senior vice president of Intuit's Financial Management Solutions division, said in a release.
McCabe underscored the significance of the announcement. "They're opening it up so that customers and partners can configure the QuickBooks Online platform to meet their country's needs, which is huge when you think about it," she said.
Taking into consideration some of the new features of QuickBooks Online, Kildal, a QuickBooks user since 2004, said the new release is the greatest improvement she's seen in eight years.
It's safe to say that for many SMBs, the duct tape budget has officially been slashed.
Emma Snider is associate site editor for SearchFinancialApplications.com. Follow her on Twitter @emmajs24.