At a glance
Sage, the largest small business accounting software company in the world, is the latest to the cloud accounting party in Australia. The company launched a small business accounting program, Sage One, to take on MYOB Essentials, Xero and the like in May 2015.
The program has been on sale for several months in South Africa and the UK. Total customers worldwide are believed to be about 120,000.
Sage is relatively unknown in Australia and the US, although it is a household name in the UK. The company employs more than 13,000 and turns over UK£1.3 billion a year.
In Australia, Sage mainly sells accounting programs and CRMs for larger businesses, and accountants know it best for its HandiSoft software, used to manage the business needs of accounting practices.
Sage Australia is hoping HandiSoft accountants will recommend Sage One as a reliable and affordable accounting program to their small business clients. Sage head office sees the advent of cloud accounting software as an opportunity to replicate its UK success around the world.
The Sage plan is to split the small business market in a similar way to MYOB. MYOB Essentials and Sage One are aimed at the micro-business market. Although they both include payroll, they aren’t intended to be used by companies with more than 10 employees.
Just as MYOB’s cloud hybrid AccountRight Live is the big brother to MYOB Essentials, Sage launched a big brother to Sage One in some markets in July 2015. Called Sage Live, it will best suit companies already using the CRM Salesforce.com, with which it integrates natively as it is built on the same software platform.
It is expected to arrive in Australia in 2017.
What it does
Sage One includes a dashboard – standard kit for cloud accounting programs, but it’s intuitive and more flexible than most. It lets you reorder tasks to suit your preferences and create a favourites list for popular functions.
Inventory is another highlight. It suits a business looking for a simple way to track goods bought and sold, make adjustments and create custom fields.
For complexity it matches other browser-based apps such as Intuit QuickBooks Online and Xero, while lacking the features depths of MYOB AccountRight Live. You can’t reorder quantities or manage stock across several locations, for example.
Bank feeds come from global financial data aggregator Yodlee, source of most cloud accounting packages’ bank data. MYOB uses the more accurate and locally developed MYOB BankLink.
However, if you are wary of handing over your bank login details to Yodlee, or looking for a more reliable source of direct bank feeds, Sage One gives you the option of replacing them with feeds from SISS Data Services. SISS connects to the major banks and a few others; the direct feeds cost $7 a month.
In the past year Sage One has added multi-currency capabilities and time tracking.
Sage One’s bank reconciliation screen is not as advanced as those of competitors. It doesn’t do as good a job at automatically matching regular transactions through bank rules, a key feature in Xero.
Another possible weakness is payroll. Australia’s version of Sage One relies on a third-party cloud-accounting program, Sky Payroll.
Integrating with a dedicated payroll app does bring some benefits, however. Sky Payroll includes a deep set of features right out of the gate. It complies with all HR legislation, including superannuation, and employees can look up their own payslips and apply for leave through an employee portal, just like rivals Intuit QuickBooks Online and Xero.
Sky Payroll even offers an outsourced payroll bureau as an additional service – they will pay your staff for you.
The downside is a second interface to navigate and the extra cost. The package allows free use of Sky Payroll by five employees; the sixth and extra employees cost $2.20 a month each.
The add-on question
Sage One is so new to the market that it hasn’t yet built up an ecosystem of third-party add-on programs to extend the functionality of the core software.
There are just four integrations aside from Sky Payroll, although one is a clever tie-in to Sage’s HandiSoft suite in Australia. HandiSoft accountants can import client transactions into HandiLedger and import clients’ business activity statements (BAS) into HandiTax.
It’s worth noting that Sage has invested heavily in mobile apps for its new cloud accounting app. In fact, it may have the most comprehensive representation of all vendors, with separate apps for Apple iPhone and iPad, Microsoft Windows Phone and Android devices.
Sage has also released an accountants’ edition of Sage One, with customisable dashboards showing how clients are performing in real time. The dashboard comprises six widgets displaying bank account and credit card balances, profit and loss, scheduled tasks for the accountant to perform in the client’s file, notes and high-level company information (financial year end, ABN, ACN, BAS frequency, tax number and so on).
Sage One costs $15 a month, making it one of the cheapest on the market. A 12-month subscription is $162.
It does have some unusual restrictions, however. The base subscription allows for two users; extra users cost $3 a month each. Storage is also calculated separately. Each company file includes 1GB of file storage, and each extra GB costs $1.
Sage One is unique in charging for storage. Other software vendors don’t reveal the requirements for a company file so it’s difficult to know how much a small business might need.
Given that the average Word document or Excel file might be several megabytes, the average small business would be unlikely to add more than 1000 MB (1GB) in total each year.