Dear accounting software industry...

05 May 2011 Voices

John Tate puts in a request to suppliers of accounting software.

John Tate puts in a request to suppliers of accounting software.



Dear accounting software industry,

As we move through 2011 the extent of the Budget cuts are becoming clearer. Government funding reductions are being announced, trends in the level of voluntary income are helping organisations understand how their top line is likely to look and cost reductions are being made to accommodate this.

The role of the FD has never been more crucial in helping civil society manage its way through this minefield.

Thank heavens for the technology that we have to support this. Webbased or cloud computing, Windows 7, PCs that are hundreds of times more powerful than the devices of 20 years ago and an array of mobile technology is available to provide access to IT from almost anywhere.

And then of course we have the world-class accounting software to help us manage our organisations. Continuous improvement to our systems has resulted in online and up-to-date access to the key financial metrics and we all now know with confidence where we stand on our ‘bottom line’.

Well done and thank you to the IT industry for providing the tools to help us do our jobs.

Or not?

Global expenditure on IT continues to outstrip inflation yearon- year and is predicted to account for 8.7 per cent of global GDP. It is estimated we are going to spend over $4tn on IT this year globally, over double the amount ‘invested’ ten years ago.

So we are actually spending more not less money on technology. Presumably this has given us better accounting systems?

I installed my first PC-based accounting system in 1989 (Pegasus Senior). It was a big improvement on the mainframe/mini-computer solutions I had used before – and available at a fraction of the cost of my previous systems. I installed the first accounting product at a charity in the early 1990s (probably Sage Line 50) and again it was a big stepup on what had been used before. However problems soon arose in getting the right level of information out of the system – both as a result of the poor reporting tools and the lack of analysis capability in the product.

Little change

Step forward 20 years and sadly not much has changed. The Sage products are the most widely used in the sector and reporting/analysis is still a major headache. Other products do not offer much better solutions. Most of the established vendors have made limited investment in R&D and the core code that was initially written when developing the products is still in use today. Most SORP reports are still produced off spreadsheets – with an array of workbooks needed to do the detailed analysis on expenditure/income-by-project/fund etc. Re-keying of data costs money and takes time – which delays the production of accurate information.

I run the CFDG IT helpline and the most commonly asked question is “Can you recommend an accounting system that will actually produce the information I need as I cannot find one”.

Some of the more sophisticated products do offer better capabilities but can cost tens or hundreds of thousands of pounds to buy and implement. These costs are well outside the reach of many charities, particularly in the current climate.

In the longer-term there is hope as a raft of new products are coming onto the market designed from scratch to work over the internet. Some of the companies that are writing these recognise the weakness in the current systems and are attempting to develop new software that will address these issues. However the new kids on the block are just that – and with that goes uncertainty of the quality of the product/support. There is the question too of which suppliers will still be in business in say five years as no-one wants to end up with an unsupported product.

So in the interim I’d like to ask the accounting software market for help. Please reduce the price of your legacy products – or give them away free to the sector. You have made your money back many times on your initial R&D expenditure and in most cases a lot of money out of the charity sector. Until you can deliver software that really addresses our needs please stop charging for it. Happy to pay for support/ professional services but not for old and poor products. As an incentive, I request you write new software that actually gives us what we want and we will happily pay for this.

Yours sincerely,

John Tate

John Tate is MD of ChangeBASE, IT adviser to the CFDG and a visiting lecturer at Cass Business School

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