UK Accounting Software Market Report
In keeping with our open approach as a business, I am pleased to unveil our UK Accounting Software Market Report. For a copy please click here: UK Accounting Software Market.
If you would like to use this report or quote from it, you may do so providing you reference and link to the Clear Books website www.clearbooks.co.uk.
Last month I posted a plea to online accounting providers asking them to volunteer as much information as possible about their businesses. A big thank you is due to the following vendors who obliged:
- Michael Parkes (Arithmo)
- Hugh Scantlebury (Aqilla)
- Ed Molyneux (FreeAgent Central)
- Duane Jackson (KashFlow)
- Lisa Kendrick & Matt Holmes (Liquid Accounts)
Thanks also extends to the following industry commentators:
- Dennis Howlett (you can read his thoughts on the “bizarre” analysis here!)
- Ben Kepes (CloudAve)
- Richard Messik (Vantis)
- David Terrar (Business Two Zero)
These were the contributors cited by the research team so apologies if anyone has been missed out. In particular gratitude must go to the three students from The Judge Business School at the University of Cambridge who put together this report over a period of just one month. These students were set objectives on the premise that they were acting as consultants to Clear Books, and were then left to carry out their research independently.
As far as I am aware this report is the first ever serious piece of consolidated work on the online accounting market in the UK. That’s not such a surprise in our young industry.
The interesting snippets that I picked up were:
- Estimate that 2m businesses in the UK use accounting software and that more than 2m don’t
- UK user number estimates: KashFlow (5000-6000) Xero (3000-4000) FreeAgent (1500-2000)
- The big four desktop accounting vendors between them have UK estimated revenues of just over £200m and approximately 1m users.
- Quality of product is critical in evaluating IT products
- FreeAgent probably raised approximately £800k from recent Iris investment
- Clear Books performed favourably against competitors in a usability questionnaire
What did you pick out? Do you agree with the research or do some facts need setting straight? Let me know…
Xero
- Website
- www.xero.com
- Company Name
- Xero
- Company Location
- Based in New Zealand, its headquarters are in Wellington with offices in Auckland, Christchurch and London, UK
- Company’s Founder(s)
- Rod Drury and Hamish Edwards
- Company’s Shareholder(s)
- Xero is a public company listed on the New Zealand Stock Exchange
- Website Launch Date
- July 2006
- Number of Employees
- 57
- Number of Paying Customers
- 6,000
- Name of Each Package and Cost
- Standard package £19 per month. A discounted pre-pay option offers its users 12 months membership for £289.
- Free Trial
- 30 days
Company History
Founded by technology entrepreneur Rod Drury and specialist small business accountant Hamish Edwards, Xero advertises itself as the world’s easiest online accounting system.
Offering its users access to bank transactions, invoices, expenses and reports from across the globe, Xero was initially designed with small businesses in mind but has become an increasingly popular accounting system for large stock exchange listed companies.
The ambitious duo behind Xero met at software company AfterMail and, in 2006, Drury and Edwards combined their business acumen and accountancy experience to create a new online accounting system. By 2007, Xero was listed on the New Zealand Stock Exchange.
Xero now aims to ‘revolutionise small businesses’ around the world. For its founders, ‘that’s what (they’re) here to do.’
Links
Sources
Xero raises $23.2 million
In a previous post about Xero I alluded to the fact that Xero would need to seriously ramp up paying customers to move into profitability. Xero recently announced a paying customer base of 6,000 with an increase of 3,000 over a three month period.
A capital fundraising of NZ $23.2 million is no doubt a means to partly provide a cushion for their current high cash burn rate. It will be interesting to see what growth plans are in store for the remaining funds.
List of accounting software online and on the web
When we first started Clear Books in July 2008 we thought we had hit on a great idea with our online accounting app. We still think that, but we are not alone…
There is nothing new about accounting software. Indeed, accounting itself can be traced back to 1494 and the father of double entry bookkeeping, Luca Pacioli.
We thought we were on to a winner with our online concept. Needless to say, a little market research soon showed that we were not the first to have the idea. Indeed, every day I seem to stumble across a new face and here they are: 
Xero Accounts
Xero is an online accounting package that was launched in April 2007. Our accounting software, Clear Books, was beta launched in December 2008 and we are making good progress closing the time advantage afforded by Xero’s first mover advantage.
Clear Books differentiator is a cheap and simple accounting system that will help small businesses instil financial rigour to their organisations thus providing a sound platform to grow.