There are thousands of accounting packages out there, but I’ve put together a shortlist for Sage Financials users in the unenviable position of having to find a new solution in the next 10 months.
There is nothing wrong with your old on-premise accounting solutions, but if you are going to change, you MUST go for a cloud solution. And I mean a true cloud solution, not a desktop package hosted online with virtual servers… As well as the well rehearsed benefits of resilience & security, continual improvement, scalability, subscription billing which make it “accessible online anytime, anywhere, from any device”, for me the key benefit of a true cloud solution is the integration with other packages through an API. (An API is a standard interface that allows separate systems to communicate with each other). In theory this means you can choose the best of breed solutions for your various functions and connect them together. For example, Salesforce for CRM, Eventbrite for events, Expensify for expenses management, WordPress for your website, MailChimp for email marketing.
Choosing a Cloud solution provides the most secure long-term investment with the lowest risk of obsolescence.
Market Dominators
In the UK there are two cloud accounting solutions that dominate the market: Xero and Quickbooks. Any review needs to consider these. They have the revenue to invest in continual improvement, are exceptional value for money, and have an abundance of features and because of their dominance are the most likely to have integrations ready to go for you favourite cloud applications. Expensify for example provides a free integration with both these systems.
I’ve left Sage Line 50 out, not just out of spite, but because it is not a true cloud solution.
Salesforce native solutions
For many people, Sage Financials being on the Salesforce platform was the key reason they chose that solution. There are four alternative accounting solutions that are native Salesforce applications and these have been reviewed.
Sage Solutionss
For Sage Financials’ users, Sage will be offering attractive deals for their new flagship product Intacct.
Native or integrated
Sage Intacct make much of their integration with Salesforce (though I do have reservations…) but bear in mind that both Xero and Quickbooks can also be integrated with Salesforce.
For Salesforce users the question of integration or native Salesforce is an important decision. I think of it like the difference between a caravan and a campervan – there are pro’s and con’s for both. My feeling is that reporting and customisation are going to be most flexible with a native solution, but you may have to make some compromises on the ease-of-use on the accounting side.
Salesforce provides a fantastic ‘hub’ for integrating cloud applications because of the APEX programming language. For custom integrations you will require the Enterprise Edition of Salesforce, but there are many standard integrations available through the Appexchange for the lower cost Professional Edition.
Assessment Criteria
Every company is different and will need different accounting features. Below is a list of the key features, an assessment of how important they really are, and some points to watch out for. Use this to build your own check-list when assessing any accounting solution.
Every accounts system has to be able to create invoices, credit notes, payments, receipts, refunds & payments on account (though there is a story about Sage Financials…). Additionally you want some way to manage credit chasing, payments by BACS, aged debtor & credit reports for credit management and retrospective aged debtors & creditors for audit purposes.
Explore how easy this is, and if you have large numbers of transactions, make sure the system is productive enough to work for you.
Bank reconciliation is a requirement for auditing, but the modern bank reconciliation is much more than that, providing a way to rapidly & reliably enter data into your accounting system.
Automated bank feeds on the other hand are a nice-to-have feature, but not essential provided there is a bank CSV import available. Event with the market dominators, not all banks are supported, so check first!
Sage Financials never cracked this correctly as they did not enforce, nor could they control, reconciliation of all bank transactions.
Salesforce reports are great for dashboards and management reporting, but don’t work for traditional financial reports such as Balance sheet, PnL and Account statements because the drill-down is not right and they cannot handle running totals.
Some systems will allow you to configure these standard reports, but with Sage Financials that was a double-edged sword as it was really easy to break them and end up with a balance sheet that did not balance. Other systems have limited or no capability to customise these reports, so make sure the system can produce the reports you require in the layout you can live with:
Balance Sheet
Profit & loss
Trial Balance
Aged Creditors & Debtors (aged by days)
Retrospective Aged Creditor & Debtors (required for auditing)
And check the necessary management reports can be produced (ask to see examples) and/or that you can customise them in the way you need.
Also remember you can use tools such as Tableau or Power BI to get dashboards on steroids if this is critical.
If you are trading in foreign currencies, multi-currency support could be a help. (Though for the odd fx trade you can fudge it and keep things simple). Multi-currency support allows you to record transaction in the foreign currency, but to represent them on your ‘base’ currency for reporting. If you buy at one exchange rate, and get paid at another, you will incur currency exchange gains or losses, and this should be handled automatically in your accounting system.
As well as the ‘realised’ currency gains/losses. For unpaid invoices, and foreign exchange bank balances you may need to consider unrealized gains/losses. For many companies this is not significant, but if you have $1m outstanding invoice and you want to record you end-of-month position accurately, you should revalue it to the end of month exchange rate, along with your dollar bank balance.
Note that as we learnt with Sage Financials, you need to be able to revalue retrospectively – to the position and exchange rate at the month end, rather than just ‘todays’ position.
Bank Reconciliation may also need to be more nuanced. If you have a Euro or Dollar bank account you will need to reconcile using the fx amount, whereas if you are using a GBP bank account you will need some way to handle fx receipts & payment, along with related bank charges. There are different way to do this, but make sure you know what the process is, and are happy with the way it works.
Multi-company features are what separates the ‘Market Dominators’ from the more expensive systems. Xero & QuickBooks do not handle multi-company in a single instance. (Though you can have multiple instances and consolidate exported data in a spread-sheet!)
Multi-company enables you to manage subsidiary companies in the same instance and then consolidate them for reporting purposes. However consolidation is more than just adding up all the ledger postings: intra-company trades (one company charging another company for services) need to be excluded from the consolidated PnL and this was an aspect Sage Financials never handled.
Check how easy it is to consolidate, and make sure it’s clear which company you are in when processing invoices! Make sure multiple open tabs are managed as this was a real bane of Sage Financials – it could look like you were in one company, but were actually in another.
Finally watch out for VAT as some organisations have different trading companies, but submit VAT jointly, whereas others submit VAT separately. Make sure your choice can do what is needed.
This is related to multi-company, but is where you have subsidiary companies trading in other countries. If you trade in France, you need to be able to submit VAT returns to the French authorities. If you trade in the USA you need to be able to calculate tax using their complex tax regulation.
This was one area where Sage Financials was blazing a trail. They certainly had the ambition to support multi-legislation, just delivery was rather disappointing.
To be able to calculate VAT in EU countries you must have the values recorded in Euros as a starting point. Then different countries enforce different legislative requirements. Like the UK insists on MTD, but Germany requires you cannot unpost transactions, and all ledger postings must record the contra-posting.
In many cases it may be simpler to use a local accounting system, and simply import transactions to a mirror company in your main accounts.
Recognition (Subscriptions & Professional Services)
A typical example of expense recognition is your council rates, where you receive and invoice in April, but the costs should really be reconciled over a 12 month period. Similarly with revenue, such as , a 6 month control, paid in advance, should be recognised over the 6 months. Its important to distinguish recognition (which is an accounting adjustment) from phased payments (which is a credit issue). Rates can be paid over 10 months, but should be reconciled over 12.
Many systems, including Sage Financials, can handle this simple recognition by generating a reconciliation schedule for each invoice. This can be data hungry is you do this a lot, and I believe there are better ways to handle this.
With professional services or annuity contracts, you are likely to require something more sophisticated. The revenue to be recognised over the life of a project is rarely uniform, perhaps Billing milestones trigger both the invoicing and the recognition. Or if you record time worked, you might want to recognise this work-in-progress as a pre-payment or accrual.
As with stock control, if you are serious about professional services you probably want to look at a 3rd party system. Krow for example is a Salesforce Appexchange plugin with a wide range of features, scheduling, Gannt diagrams, time-recoding, milestones, invoicing & recognition etc.
This is one area where the ‘Market dominators’ shine – they both have integrated payroll systems (at a cost). For the other systems there may be integrations available, but this is often not necessary.
Managing payroll is much more than just banging in hours worked and printing payslips, which is why many companies outsource payroll altogether. There are different ways to account for salary costs, the simplest is where the payroll bureau simply provided you with the totals you need to post each month.
It does get mor complicated if you want to allocate costs to departments etc, but the main thing is to ensure your bureau can provide the data in a format that can be imported into your financial accounts.
Fixed assets systems allow you to record your fixed assets, and apply appropriate depreciation costs and handle disposals correctly. However, many companies do not have significant Fixed Assets and it is more of any end of year tax issue.
In manufacturing and some other sectors with high value assets, depreciation makes a significant impact on your PnL and you will need to record this on a monthly basis. And you can get more sophisticated, with different depreciation models for different assets (computers typically depreciating much faster than industrial plant). In these cases a Fixed Assets system would be a big help.
Simple stock control such as Sage Financials provided is suitable for distributors who were buying and selling things, rather than manufacturers or value-added resellers where a more sophisticated system is needed. Simple stock control can save loads of time by automatically adjusting stock levels as you raise sales invoices, and conversely increasing stock levels and you raise purchase invoices. If you are purchasing many components to create a single product, you need something more sophisticated.
And this is where the power of the cloud comes in, as there a 3rd party systems that can provide that sophistication, and integrate in with whatever financial accounting solution you use.
Sage Financials had a simple Purchase Order system, using the Salesforce approvals process to manage this. If you have complex procurement needs you may find them built into the accounting solution or you may be able to integrate with a 3rd party.
Though standard invoice/statement/remittance advice may work for your business, some companies, particularly exporters, require a wider range of documentation. Make sure you are clear what you need.
Storing budgets as well as actuals in your financial accounting application enables you to quickly report on progress. The key for a good budgeting tools is the easy of editing the budgets. Either a simple export and import from Excel, and/or a spread-sheet like interface is a minimum.
You may also want ‘forecast’ figures (actual to date, budget to eoy) so a simple way to transpose actuals to forecast is also a benefit.
And if you need to define budgets by department then the budget tool must cope with this.
Make sure your supplier provides an estimate of your data requirements over 5 – 10 years. Otherwise you may have an unbelievably painful shock form Salesforce. And related to this is to ask what is their archiving solution.
And make sure you are clear about the license costs as you grow.
As we the accounting systems get more and more advanced, we may soon reach a point where you can virtually eliminate data entry. With Salesforce native applications this is already possible with integration for Expensify for expenses, AutoPost for purchase invoices, SmarterPay for direct debit collection.
Xero has some very cleaver integration if both customer and supplier use Xero, and a button to allow payment of your sales invoices by card may be appropriate for some businesses.
Salesforce – get out of jail free card
These assessment criteria my seem bewildering, but you do need to decide which are absolute requirements for you and which are ‘nice to have’. Then you have to measure any competing systems against this criteria and it is unlikely you will find the perfect match.
And this is where Salesforce provides a ‘get out of gaol free’ card for the native Salesforce applications. The full programming language APEX, together with the open architecture of Salesforce means it is possible to solve any of the shortcomings you may find with your best-match solution. This is the route we chose to ‘improve’ Sage Financials, enabling us to provide expenses handling (using Expensify), fx re-valuation, improved budget handling, BACS payment selection, automated journal processing and much, much more.
Sage Financials knowhow evaluation
If you want to see the full shortlist of accounting solutions and the Sage Financials knowhow evaluation, please follow this link.
1 thought on “Sage Financials REPLACEMENT shortlist”
Thank you for the above info, but one key important requirement for most new accounting systems is Project Accounting, or old language Job costing. We are a consultancy business that sell time and expenses to client, and hence we require a system that has project accounting, thanks.
Thank you for the above info, but one key important requirement for most new accounting systems is Project Accounting, or old language Job costing. We are a consultancy business that sell time and expenses to client, and hence we require a system that has project accounting, thanks.