Reckon One is the latest entrant to the UK cloud accounting market for micro businesses. We take a look at the main features.
Accountex 2016 saw the launch of a couple of new interesting entrants to the micro and small business cloud accounting market. Reckon One has been launched by its parent company Reckon, a profitable and publicly quoted business which has been present in Australia for over 20 years. Reckon has recently rebuilt its online accounting product from the ground up and has now launched it in the UK.
Who’s It For?
The Reckon team is eyeing the micro business segment of the market. Now in its wisdom, the EU has defined micro-businesses as those with fewer than than 10 employees and a turnover of less than €2m per annum. This rather expansive definition of ‘micro’ does somewhat torture the normal meaning of the English word, and in its first flush the Reckon One product is particularly aimed at truly micro owner-managed businesses probably with no more than 1-2 employees.
Give Me The Headlines
The product is built around the core book-keeping and cloud accounting module which can be supplemented by additional modules (invoicing & billing, bank data, projects and time & expenses) as required. Each module has ‘lite’ and ‘medium’ options and the ability to switch these modules on and off almost at will makes for a very flexible and intuitive product set. This ought to give some of the established players some pause for thought when they consider their own pricier propositions that are geared towards this segment of the market.
What Does It Cost?
Pricing will vary dependent upon which modules you select, but indicatively the basic book-keeping module is £3/month, with the full ‘lite’ set of modules costing £11/month and the full ‘medium’ set of modules costing £15/month. Current pricing is available <HERE>.
OK, Give Me More Detail
Before we proceed, relevant disclosures. We are certified cloud accounting platform partners of Xero, QuickBooks Online and FreeAgent. However, at the heart of our service is the commitment always to provide impartial and tailored advice on all the relevant products in the market. We only recommend products we believe are suitable for our customers’ requirements, and if that’s not one of our platform partners, so be it.
Also, we haven’t yet test-driven the Reckon One product, but we’ve seen a demo and have taken the time to speak in depth to the Reckon One team. What follows is our understanding of what the system can do, and some areas that are to be developed, based upon those conversations.
So let’s take a look at those modules.
Book-keeping and Accounting
As with many cloud packages aimed at small businesses, the bank account acts as the main driver of data entry into the books. Bank statements can be manually uploaded by CSV file using the core module, and transactions can then be classified using rules which can be created and subsequently edited. Invoices, expenses and journals may be manually raised prior to importing bank transaction information, and bank transactions can be matched to the existing book entries. You can match c. 20 transactions at a time.
The core module will handle on a cash or accruals basis the main VAT schemes, being the standard scheme, the annual scheme and the flat rate scheme, and the system will apply the 1% FRS first year discount automatically. VAT returns may be submitted electronically to HMRC from the platform.
A pre-set suite of over 35 reports is provided, including a trial balance, aged debtors and creditors and so on. A degree of customisation is possible from these standards through showing and hiding columns.
There is no limit on user numbers for the prices quoted.
Invoicing & Billing
For an additional £2/month for the ‘Lite’ module, you can raise sales invoices from within the platform using a selection of pre-formatted templates. Your company logo can be added to these templates.
The invoicing module will handle VAT, as one would expect, as well as discounts and payment terms. Invoices can then be emailed to your customers directly from the platform.
And if you have an employee raising invoices for you, and want to check them before they’re issued, workflow approvals are available under the ‘medium’ option at £3/month.
An interesting consequence of the module flexibility is that in the case of invoicing, seasonal businesses that generate invoices only during a concentrated period in the year may switch the billing module on for that period and then turn it off, making the pricing particularly attractive.
The Bank Data module isn’t yet live, but Reckon are targeting a June 2016 launch date for this feature. Banking transaction feeds will be available from the major banking providers through the Yodlee service. This removes the need for manual entry of bank and credit card transaction data.
Pricing varies by transaction volume – £2/month for up to 100 transactions, and £3/month for up to 250 transactions. For heavy users it’s £5/month for up to 500 transactions. There are no published rates above 500 transactions a month, and although Reckon offer you to call them for a customised quote we also take this as a guide as to where their system is targeted, so it may be time to start looking at a more enterprise-level system beyond these levels of transactions.
Time & Expenses
This module will allow you to track your time and expenses under the ‘lite’ plan and, under the ‘medium’ plan, will allow you to create invoices based upon time spent (this will, of course, also require the invoicing module). This is particularly useful for time-based service companies such as small professional services businesses or trades.
With the projects module you will be able to allocate costs and invoices to projects, and thus see how much profit you’re making on a particular job. The system will also allow you to create sub-level jobs within a project. You can upgrade to the ‘medium’ package and get the facility to share project costs out to customers and to set item rates for particular projects – ideal if you’ve agreed a discount rate for a project, but don’t want to accidentally bill the lower rate to another customer.
What it doesn’t do
Platform providers have to make choices in respect of their target customer market and thus decide which system functionality is (and isn’t) going to be developed. With Reckon One, some of these elements have been (probably rightly) de-prioritised, whereas others still need to be delivered to arrive at a fully competitive cloud accounting platform.
Add-in ecosystem The API is currently in open Beta stage, and Reckon is working with strategic partners to ensure the interfaces are robust so that add-in partners can begin plugging their apps into the system. So at this stage, you can’t plug in a payroll product (there is no payroll functionality in the system) or automated invoice and receipt scanning (such as ReceiptBank or AutoEntry) – or anything else for that matter. However, we’re assured add-on integrations are in the pipeline.
Cost centre reporting Priority has been given to developing the Project module, so there is no cost centre reporting functionality, but we think this is probably the right call at this stage.
Other Accounting Features There is ‘stock list’ functionality for pricing purposes, but no stock control. We don’t think this is a pressing requirement, though, for the target market. There is no fixed asset module yet, and fixed asset control & depreciation postings need to be done manually. We would like to see this on the roadmap. Nor is there a multi-currency feature – which, at a minimum, would be nice for invoicing as increasingly we see contractors and businesses offering services to EU and EEA members. Lastly, it would be nice to have a tax calendar for users, as FreeAgent has, showing when VAT, PAYE and Corporation Tax fall due.
What’s coming next
As well as the Bank Data module slated for June 2016, for us the key next step for the product is to finalise the API so that third party apps can be connected. We understand that this is targeted for the end of summer 2016 (along with multi-currency functionality). No doubt there will be other background developments to improve process and resilience too.
We’ll update this blog post periodically to reflect the latest position (latest version: May 2016).
In A Nutshell
Reckon One is a promising new contender in the relatively crowded cloud accounting market. It’s focussed on a micro-business segment which is not so well served with keenly priced options, so its flexible functionality and pricing will prove attractive to businesses taking their first steps onto the cloud.
Price alone may not be enough to persuade more seasoned business users to move away from competitor platforms just yet, but a few further product developments is likely to change that balance.
About Aiteo Consulting
Aiteo Consulting provides CFO advisory services to innovative and motivated Tech businesses. So whether you’re in start-up mode, or are running a growing enterprise which is pushing through to the next level, we can help you understand how cloud accounting can dramatically improve your efficiency, save you time and make real improvements to your bottom line.