For years â€” literally going on decades â€” small and large businesses relied on QuickBooks to handle their day-to-day accounting and business tasks. It was the go-to. The industry standard. It had next to no competition. The next best alternative was running a Microsoft Excel spreadsheet.
Cloud technology has shifted the accounting software landscape. App developers who understand businesses are coming up with solutions that are easier to use, look better and are actually more efficient.
One company that claims to be the best alternative is Xero, which has raised $150 million in the U.S. to compete directly against QuickBooks and other new-to-market vendors. Xero was built from the ground up with the mobile small business owner in mind. It relies on cloud infrastructure and gives business owners the opportunity to always check their financials, be it from a smartphone or tablet on the train, or on the desktop at the office.
The problem with QuickBooks â€” or any accounting software â€” back in the day is that it only lived on-premise. There was no other way of checking financials without being in the office.
As mentioned above, QuickBooks is adapting. You can now buy a solution called QuickBooks Online, which is the cloud-based version of everyoneâ€™s once-favorite accounting software.
Itâ€™s a good solution thatâ€™s getting better, but its biggest issue is that itâ€™s stuck in a desktop, on-premise world.
Applications like Xero or FreshBooks never had to understand the business owner of yesterday. Theyâ€™ve only and always been focused on mobile, tech-savvy users. Thatâ€™s a huge opportunity.
One newer, cloud-based vendor â€” Intacct â€” told Forbes that 50 percent of its new customers were coming from QuickBooks. Xero has seen similar numbers.
It might take a few years for some companies, especially those who have recently updated their on-site infrastructure. But when that equipment starts to get old and fail, theyâ€™ll be looking for a cloud-based solution. And the vendors will be waiting.
Xero actually markets its solution as â€œthe online accounting software alternative to QuickBooks.â€ Itâ€™s actually a nod to QuickBooksâ€™ dominance over the years.
People like cloud-based software because it can be updated automatically, itâ€™s completely scalable for any size business, it allows for unlimited users at better prices and it can integrate with hundreds of third-party apps.
As mentioned, QuickBooks is getting there, but the cloud is moving fast. So are QuickBooks competitors.