Dealing with accounting software is one of the more painful parts of my business. I’ve tried LessAccounting, Wave, Xero, and eventually settled on Quickbooks Online.
I’ve heard other business owners (and accountants) complain about Quickbooks, but given how loud the complaining is, I’m surprised that there aren’t a lot of other options.
Why aren’t there thousands of accounting apps in the same way there are thousands of invoicing apps? It can’t just be inertia…
I hate QB as well. We use the desktop version. It’s riddle with bugs.
Example: we run it on 3 pcs. One mine (win 7) it stalls out connecting to the QB server for processing credit card transactions, often resulting in a CHARGE that does not show up in Quickbooks, so we charge them again. I’ve spent hours on the phone with intuit to have them finally say “it’s an ongoing problem”. I suspect that’s bullsh*t but even if it’s true, it’s a 5 month old CRITICAL bug.
Why there is no competition
High switching costs… there is incredible vendor lockin. We have processes built up around quickbooks, lots of education/training, etc.So you’re going to do better with getting new customers who don’t have any accounting software. That’s a pretty small market. And I’m sure it’s actually quite complicated software. There’s no “lean MVP” you can start with.
I’ve been weighing the idea for a while of building an accounting app that’s geared for consultants. I’m in that segment and it’s not well served.
I’ve never tried QuickBooks because I just never get past the product tour. After years of using and trying the rest (Outright, Wave, Freshbooks, Harvest, Xero, LessAccounting, FreeAgent, Billings, etc) I noticed they’re all in two camps:
I’ve bounced the idea off a few people, and gotten the feedback that accounting / taxes are boring as sin. But I don’t mind it and could think of tons of ways to use all the raw income/expense data I have to build reports that a consultant (not an accountant) actually cares about day to day.
It’s a much smaller market than proper owner/employee businesses, but I’m curious if anyone has thoughts on it.
My wife does the bookkeeping. We use Desktop Quickbooks. Its quite buggy. I have suggested that we could move to Xero or Kashflow, but she prefers to stick with ‘the devil she knows’.
For UK based companies I really rate FreeAgent.
I’ve been using it for 1.5 years now and took much sadistic pleasure breaking the QuickBooks CD’s into a million little bits after nearly a decade of misery.
Its not perfect but I thought better than Xero/kashflow and one other I looked at that I can’t remember.
Could be used outside UK but high on my list was a package that did VAT/RTI submissions automatically (frustratingly though not ECSL) and they are very UK specific.
I think Inertia is HUGE.
Its a huge job changing with big risks.
Realistically you only have one opportunity a year (changing half way through a financial year would be painful).
None of them are perfect (though arguably they are all a lot are better than QB!) but you’ve got years of data and all your processes all tied up in them and the key users know how they work.
Accountants/Bookeepers should take a lot of the blame here IMHO - for a profession that relies on these tools they seem to show remarkably little initiative for trying/learning new things. Contrast that to developers where we’re sometime tripping over ourselves to throw out proven tech to try the latest shiny thing.
hi @yanokwa
Accounting is a part of the “job” as an entrepreneur everyone avoids doing. It’s hard to sell something people WANT to procrastinate on. No one WANTs to log into an accounting app, they’d rather be doing something else. I honestly don’t think it’s the software, it’s really the mindset of a business owner who thinks “treading water” is “running a business”.
We’ll have a customer use our product (LessAccounting) for a year then their CPA wants them to switch because they don’t want to learn another accounting product.
There’s probably 100 accounting apps, with various features trying to serve various markets. All pouring money into development thinking “this next features is what we need to get all the customers.” It’s an endless development game and your competition against well funded companies who are deeply connected to accountants.
Why do accounting apps suck? Because they’re HUGE pieces of software, there’s so many different ways to handle books, so many data issues from banks and most people think their business is a unique snowflake with unique needs. Accountants have ruined the software, they’re lazy. Ever heard of an “accounting adjustment”? It’s when an accountant doesn’t want to fix mis-categorized expenses instead they add a ghost-like transaction that alters reporting. There’s 100 other stupid situations accountants have created in software.
By HUGE I mean, to create an accounting app, you’ll need thousands of hours of dev time before you can call yourself an “accounting app”. Go spend some time reading about cash vs accrual accounting or balance sheets. There’s way more fun/pretty/exciting problems to solve.
Anyone with the idea of building an accounting app go take Amy’s course. https://30x500.com/academy - you’ll soon have better ideas, or rather ideas that’ll more quickly make you money.
Great response, @allan_branch! I really appreciate insights from the trenches. And you are right, I used and liked LessAccounting for a while and my accountant pushed me to switch! 
Given all this, why did you build LessAccounting? And why keep it going? Do you think approaches like Bench are better?
We built it in 2006/2007, transparency among software companies was limited. There wasn’t a thing called “lifecycle emails”, stripe and sendgrid did not exist. We built it ignorantly and worked for years to make it profitable. It supports the whole company now.
We do have a similar service as bench, http://lessaccounting.com/autopilot - it’s much easier to sell services than software.
I ranted about Quickbooks and MYOB more than 7 years ago: http://icanhazdot.net/2008/09/19/million-dollar-idea-quickbooks-myob-for-humans/
tldr; If you’re really into this (er…WHY?) there were a few posts. The CEO of Saasu weighed in on one of them: http://icanhazdot.net/?s=quickbooks
from one of those posts
##Update March 2014
I have been using Xero for a few years now and I would never go back. My annual (personal – I am a sole trader, not a Pty Ltd) tax return process has gone from a profanity-ridden 4 day antisocial lockdown to about 2 minutes copying Xero reports totals into a simple Google docs spreadsheet. BX (Before Xero) I literally had no idea how my business was doing until the EOY return because it was just too hard to figure out. Xero may even have saved my marriage, such was the angst.
Speak for yourself. 
Hey, long time lurker but new poster here.
As a small software consultant with a team of 3, I found the QBO did the job for us. I was a LessAccounting customer for quite some time but as I moved into new business complexities I couldn’t manage the books there anymore. LA served me very well for a couple of years and I was quite happy with the software. That said, there was a point where less wasn’t enough. I think our needs moved out of their target market.
I have had some issues with QBO as well but I do not think it is bad software. It’s pretty good, and quite frequently updated. With one major exception – last year, there was an issue with QBO synchronizing with Chase bank accounts for several weeks. You can use it in ways that are pretty basic if you want to, or you can run a decent sized business on it.
The main issue for me with oversimplifying accounting is that accounting complexities often arise as an extension of tax code complexities or the general minutiae of buying and selling materials, tracking employee compensation, taxes, retirement contributions, health insurance, operational expenses (not to be confused with purchasing assets, which may or may not be fully depreciated during the year), accumulating sales tax, tracking owner draws and contributions, synchronizing external accounts with the transaction ledger, branding invoices, differentiating between invoices/estimates/packing slips, tracking contractor payments for 1099, etc., etc., etc.
I do not think accountants who shy away from accounting software that can’t address the above needs are always being lazy or disingenuous. If you’re a programmer, imagine if your customer asked that you use a basic text editor instead of the IDE you are used to. You wouldn’t take the job.
That all said – if you are a single consultant selling a single service that you deliver yourself, I think LessAccounting or similar services do a good job of serving those needs. Also worth noting that QBO and QuickBooks desktop are very different products. If you have tried the latter but not the former I think you’d be in for a surprise.
Pretty interesting archaeology on @Allan_Branch here. This was 4 months ago, and today LessAccounting was sold and the team is now consulting to startups:
Re-reading it really looks like the exit was underway and much-wanted:
@brendanfalkowski the sale took almost a full year. Yes it was much-wanted…no one can force you to sell a company when you’re bootstrapped and profitable. We wanted to sell it, it was a good thing.
Full congrats! I’m listening to the podcast now. Story is getting interesting / filling in a bit more.
I do not think it is fair to compare accountants to developers. The better one is to compare them to operations people. And there we’ll see the very same behaviour – unwillingness to introduce new shiny tools, and a preference to add a correcting post-processing rather than go deep into a script and fix the root cause.
I believe it is because the operations, just like accountants, have a different goal in mind – to keep the wheels rolling. They know from experience how many things can go wrong, and rather not make any big changes.
P.S. I’m using Wave for time being. Downsides: no search by transaction description (wut?). But my accounting (bookkeeping, actually) is very-very simple - and then I pass the reports to my accountant who’s using… QB, you guessed it.