Growing businesses need financial software that will scale with their needs. Intacct strives to fill the need beyond Intuit's QuickBooks and compete with on-premise offerings from the likes of Microsoft and Sage with a software-as-a-service offering.
After eight years, Intacct is hardly a newcomer to the software market. However, as software as a service has become a proven alternative for businesses, Intacct's customer base has boomed. Recently, CEO Mike Braun talked about why SaaS is appealing to businesses and the limitations of QuickBooks that lead many businesses to start looking for alternative financial software solutions.
bMighty: You position Intacct as an alternative when businesses "outgrow" QuickBooks. What are the issues that smaller businesses encounter that may prompt them to consider moving off QuickBooks?
Mike Braun: There are a number of reasons and they're not hard to spot; none of them are subtle. First, there's control failure. With QuickBooks, you can complete a transaction before a check is printed; that allows the payee to be changed manually and then changed back without the system ever knowing. A customer at our user conference told us that his controller had left the company and he didn't know why until he got a letter from the IRS demanding $500,000 in back taxes; the controller had changed the payee and taken the money. QuickBooks only supports a single currency; that limits businesses from doing business globally without a manual conversion step. QuickBooks is designed for single entities, so you can't keep books separately for multiple groups -- for instance, franchises, branch offices, or joint ventures -- and then consolidate them automatically. QuickBooks only counts dollars. It doesn't count things, so you can't calculate revenue per transaction or per sales rep or other variables. QuickBooks doesn't accommodate business processes involving multiple people; for instance, if you want to have one person process a transaction, but another person approve it, you can't do that. Even if you move to the QuickBooks Enterprise edition, you can't have more than 20 users. When a business is very small, these limitations aren't a problem, but you don't need to grow your business much at all before some or all of these things become big problems.
bMighty: There's cost involved with moving to a new financial application, plus the headaches of migration. Why not use integrated options, such as Acctivate for inventory control and business management, and keep using QuickBooks?
Braun: Those extensions can fill some of the holes in QuickBooks, but they can't tear down those brick wall issues I mentioned. Everyone who starts a company buys QuickBooks, but no growing company buys QuickBooks. It's a fabulous desktop product for very small companies, that's why it has 94% market share for businesses with fewer than 20 employees, but once a business starts growing, it has limitations.
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bMighty: Before SaaS , where did smaller businesses turn when they "outgrew" QuickBooks?
Braun: In the past, they've gone to what I call the six sisters, the midmarket companies offering client-server software almost completely through VARs: Microsoft Great Plains [now Microsoft Dynamics GP], Sage, Infor, Epicor, Lawson, and Deltek. Last year, the revenue in this category was $7 billion. Great Plains is the most popular of these options, but when you look at ROI studies [PDF] on it, average first year costs can top $300,000. I ask every businessperson I meet what financial system they use and what they spend. For Great Plains, I've never heard a first-year cost of less than $100,000 -- that's not just the license, but also the hardware and network gear. The other systems are priced comparably. Smaller businesses look at those huge numbers and it's no wonder they stretch QuickBooks for as a long as possible.
bMighty: How has SaaS changed the available options?
Braun: You can get started on Intaact for $10,000. That's much more accessible than the client-server options. Beyond cost, SaaS has other benefits: you don't need to worry about support or backups or remote access or intrusion detection. We guarantee a specific implementation time and uptime. We're specialists in doing this one thing and that means less expense, less risk, and less hassle for the businesses that are our customers. It's not just the businesses outgrowing QuickBooks that see the value -- our customer path has a 50/50 break, with half coming from QuickBooks and the other half coming from the different client-server providers.
bMighty: If they decide to make a change, how should a smaller business prepare both the business and IT to move to a new financial systems?
Braun: The two most important things to figure out are what they want the business process to look like and how they should manage their business. That means asking questions. What's the approval process for payments? Does the business owner approve payments or can others approve certain types of payments? Is it important to manage total revenue or revenue by product line? Does each group in the organization -- sales, production, service, etc. -- need to maintain division or group level accounting? These are important decisions about business process and once they've been made they can be mapped to the old structure. Without working through these issues, businesses are wasting their money moving to a new solution.
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Benjamin Tomkins is editor of bMighty.com.
