Accounting is going to the cloud

“The world is clearly transitioning to from desktop-based to cloud accounting, but at different rates across the globe.

Matt Paff, Founder, Value Adders, which provides independent B2B software vendor advisory services, was in Singapore to speak at the recent Accounting & Finance Show Asia 2018 in Singapore. He noted that New Zealand and Australia are "deep into mass market adoption", whereas Southeast Asia (SEA) is only beginning the journey, though he predicts that SEA adoption "will happen more quickly here than it did elsewhere.”

“Two market segments are emerging, small and medium sized enterprise (SME) cloud accounting systems (like Xero and Financio) and enterprise platforms (like NetSuite, Salesforce etc),” he said.

Paff's predictions for the region include:

• Cloud accounting is to experience a shortened hype cycle in SEA
• Vendors have to be present in Asia, Freee in Japan; FlowAccount.com in Thailand; and Jurnal in Indonesia for example
• Small and micro businesses will skip browser-based software to go mobile-first
• Alternate revenue models to prolificate for processes such as payments; loans; and payroll;
• Banks will be active, influential players in SE Asian accounting technology

For Singapore, Paff says:

• Government policy will be significant in this space, including with grants, taxes and e-invoicing support, making it hard for remote, international vendors to keep up;
• It is a unique market, but will be influenced by what happens in the Malaysia and Hong Kong.

He explained that there are "some common legal and accounting frameworks," and that "with 220,000 SMEs, Singapore is too small for a major local vendor to emerge and remain solely local".

Paff also said Xero and Financio were the two companies to watch. Singaporean company ABSS is behind the small business accounting automation solution Financio, which is "forever free" for startups with an unlimited number of users and S$9.95 a month for a premium version; while worldwide player Xero plays in the same space and has monthly plans from US$20 to US$40 a month.

Read the TechTrade Asia show-related blog posts:

Xero's success with cloud-based accounting

Fintech company Xriba's Asia expansion strategy

How Maybank is helping SMEs go digital

View pictures of the show on Facebook