Of late I’ve come across a number of SaaS accounting products that offer themselves in a white-label version. The value for the vendor is obvious, they stand to gain from the extra reach of a partner, without having to market the product themselves. It also doesn’t get in the way of any specific marketing that the vendor themselves are doing.
UK vendor KashFlow is another player going down the white label route – providing their offering to Solo, a UK based product aimed at the contractor market. Dennis has already posted his thoughts on the link up, but I also wanted to talk to Solo to find their thoughts about the relationship.
Briefly a quick summary – Solo, a publicly listed company in the UK, has taken KashFlow’s accounting engine and wrapped it up with the MitreFinch payroll product. This is all rebranded as a Solo product, has extra support features with it and comes with option of some ancillary added services from Solo. Also in an effort to ease the on-ramp for cautious and generally slow to change SMBs, Solo guarantees that the product mix is compliant with the UK Inland Revenue and offers an insurance policy to back it up. It’s a turnkey solution that costs £65 per month.
I chatted with Nick Riby, the general manager of Solo and started by asking him the rationale for going out to the marketplace and cherry picking components from different vendors. He explained that Solo recognised the enormous market potential of producing one single piece of software which would cater for all of the business administration, payroll, book-keeping, accounting, tax and legal requirements of freelance consultants and independent contractors, adding that automating the process achieves the outcomes at approximately half the cost of employing an accountant.
Nick pointed out that the existing accounting products available are seldom suitable for small business owners with little or no accounting experience, and that in fact most contractors need a simple once per week invoice with a few expenses and then a payroll and dividend calculation. By linking to Kashflow and other solutions Solo believes they have automated many of these processes so that the contract worker only needs to spend 10 minutes per week updating his or her data.
I was interested to hear the experience Solo had integrating with KashFlow and how that compares to the other products they aligned with. In what will be music to the ears of the founder of KashFlow, Duane Jackson, Riby reported that linking to Kashflow has proven to be very easy, due to the technical simplicity of the product. Interestingly however In a very un-API-esque method, Riby explained that they are uploading and downloading CSV files once per week to get data to/from the payroll package.
Finally I asked Riby where he saw the value for SMBs lies in the packaged product – his take on it was that there is both an expense side reduction, and an added value win with their offering suggesting that clients no longer need the services of a third party bookkeeping service provider. I’m not completely sure just how much of the day to day bookkeeping service a business can actually automate – both because accountants themselves will close rank in response to this perceived threat on a good income stream for themselves, but also because I contend that small but regular oversight of a small businesses accounts by someone with bookkeeping skills will at the end of the day save time and money and avoid in-depth accounting work at year end.
Along with the product itself, Solo also provides additional services to contractors and agencies so that the use of e-solo is like a one stop shop. The extra services are in the area of company formation, business bank accounts, contract terms reviews, insurances etc.
It’s a logical move, both for Solo and for Kashflow. Kashflow gains significant revenue with little or no marketing spend and with little more than a quick customisation job pre-API, while Solo gets to build a complete product without having to develop software itself.
Having said that, and while I applaud the value that this offering will provide to micro-businesses, I can’t help but think, once again, that offerings like this lubricate half way up the on ramp. If there’s still a 3 foot leap at the bottom (to extend a metaphor somewhat) the on-ramp is still fairly difficult to negotiate. In my discussions with SaaS accounting vendors, I’m starting to see an acceptance and realisation that migration assistance is a neccessity in order to scale beyond tech-savvy early adopters. I long for the day when migration to a SaaS app is as simple as an mage upload to Flickr or a document upload to Google apps. Early days but it’ll come.