There’s been an unexpected advantage of moving accounting software to the cloud. Apps that extend and enhance its ability. Xero announced at its Dev Day today that it has more than 440 applications in its Add-On Marketplace.
That’s a big number. Many accountants and bookkeepers are likely to ignore it. This is a mistake.
There is a secret mix of accounting software and add-ons that can help your clients. It can provide a powerful, scalable engine to drive their businesses forward. The exact mix will vary by client, but within specific industries, some patterns emerge.
Building the right mix of apps
One of the best presentations at Xerocon Dev Day was by Jeff Atizado. He’s the co-owner of cloud integrator SMB Consultants. Jeff spoke about the apps he recommends to his clients in the retail industry. He’s recommended they run their business on three pillars. Point-of-sale (Vend), staff management (Deputy) and accounting (Xero).
All three apps swap information with each other. They automatically update contacts, staff rosters, payroll and sales transactions. With an interconnected system, a retailers can enter information once and it will appear everywhere. This gives retailers a better idea of where their business is financially. Which allows them to make better decisions on a daily basis.
That outcome is one accountants and bookkeepers should care about. Filing an accurate tax return is great, but helping a business grow is even better.
It takes time to learn about all the apps in the Xero ecosystem. Time invested in trying out apps yourself. Or talking to the app developers at trade shows like Xerocon and emailing questions to their support team. Or even talking to your peers and clients about combinations that work for them.
Eventually you will piece together a basic framework that will help a majority of your clients. This may include receipts processing, time and attendance, or better reporting and benchmarking.
The more you research these technologies, the better equipped you will be to make detailed recommendations.
This goes for the accounting software too. The more you know about the software you use, the more you can use it to increase productivity. If you can squeeze more productivity for you and your clients out of an app, the happier everyone is.
Knowing your ecosystem
The most interesting people to me at Dev Day aren’t developers. I like to talk to the accountants, bookkeepers and consultants. They want to know how the software works, its limitations and possibilities. This includes understanding terms such as API, or application programming interface. It’s the connector that one app uses to swap data with another.
For example, it’s useful to know that not all APIs are created equal. The quality of an API is largely determined by the amount of information the program is able to share. A poor API may only share customer details. A good API can share item details on an invoice.
Another factor is whether a program can automatically receive data as well as send it. Is it a two-way integration?
When you apply this commitment to learning about an entire ecosystem, you can start to create amazing engines. Atizado showed a slide with a constellation of apps applicable to a small-time manufacturer and retailer. The apps covered:
- B2C e-commerce
- Online payments
- Mobile payments
- Email marketing
- Traffic analysis
- Third-party logistics
- Online marketplaces
- Drop shipping
- Receipt scanning
- Benchmark reporting
- Merchant services
That’s a lot of information from a lot of sources. Without APIs, all that data sits in each application and must be manually downloaded into a spreadsheet. Instead, it can all flow into a dashboard app showing the KPIs that matter most. How much would your client like to see that?
Sholto Macpherson is an analyst in cloud accounting software and publisher of DigitalFirst.com.