Chase found it frustrating to juggle the multiple bank and PayPal accounts used to pay vendors — not to mention the other software she employed to stay on top of Princess Sharon Events, her birthday entertainment service company in Cohasset, Mass.
“Everybody said QuickBooks is so simple, and I’d get lost,” she says. “I get intimidated. … And I started trying to make a spreadsheet, and I’d sweat and throw it away.”
Then Chase stumbled onto Outright.com, unwittingly joining waves of other small-business owners who have turned to “
Outright.com, Chase says, is less intimidating and simplifies the accounting by allowing her to juggle multiple accounts, generate reports on spending patterns and itemize even obscure expense categories, such as her PayPal fees and the iTunes songs she buys for party entertainment. “It’s a kindergarten-in-the-rug-kind of experience,” she says.
Drawn by the promise of simplicity and low cost, entrepreneurs are increasingly tapping into
Cheap and easy cloud-based applications can be used for a range of tasks and services, from bookkeeping to conference calls to managing complex projects with far-flung colleagues.
A survey of information technology professionals by Spiceworks this year found that 62% are using some type of cloud application, up from 48% at the beginning of the year and 28% a year ago. “If you’re starting a business,
Cloud options also free entrepreneurs from having to staff a large IT department, by passing the maintenance burden to application developers. “Sometimes we release multiple (versions of our application) a day,” says Mike McDerment, co-founder and CEO of FreshBooks, an accounting application online for small-business owners.
SIMPLICITY
Traditional desktop software often sought to be all things to all users, pleasing few.
But many cloud-computing developers, in marketing their products, tap into the anxiety of small-business owners by selling simplicity and focusing on underserved niche areas.
John Bracken founded Speek.com, a Washington, D.C.-area start-up that enables cloud-based teleconference calls, to ease the cumbersome task of rounding up attendees and dialing on speakerphones. An average call takes five minutes to coordinate, he says. “No one knows who’s coming. You beep and you say ‘Who’s that?’ ” he says.
With Speek.com, users tap on a personal, dedicated Speek.com link that works as a call invitation. And Speek’s hub in the cloud links attendees to the call. About 90% of usage is small business, Bracken says.
With a niche focus, developers can also breed innovations that weren’t possible with software that came in boxes, such as integrating the functions of other software by using open developer tools, says Rene Lacerte, CEO of Bill.com, which specializes in billing.
On Bill.com, users can tap into banks’ online banking tools and other broader accounting suites, such as Intacct and Quicken. “In the last 10 years, the cloud changed the paradigm about how software is built,” Lacerte says.
COLLABORATION AND MOBILITY
The cloud also makes it easier for users to collaborate on projects and enables multiple users to get access to the same application at the same time without losing their data or mixing it up. Callers on Speek.com, for example, can upload files to its servers, and opt to have them synced with Dropbox accounts.
Michael Hsu, founder of Deep Sky Accounting in Irvine, Calif., says his operation has been mostly turned over to cloud-based applications to eliminate the confusion and inefficiency of “too many hands in the jar.”
One of Hsu’s clients, an interactive marketing agency, previously used a spreadsheet to track invoices and checks, occasionally leading to outdated information and checks that were issued without authorization. Using cloud-based applications — Intacct, Bill.com, and GetHarvest.com for time tracking — everyone works from updates that can be seen online by all instantly, he says.
“It’s about the whole concept of having one ledger. You have one thing in common, and you’re just editing it,” he says. “Back in the old days, you send it back and forth with clients. Now all of us can work together.”
Freed from the fear of mismatched information and outdated data, users of cloud-based applications collaborate twice as much as those using similar software on desktops, says Dan Wernikoff, general manager of Intuit’s financial management solutions division, which has released cloud versions of its products, including QuickBooks.
A cloud version of QuickBooks has been around since 2000, but users were not comfortable storing data online. It struggled to get new customers. In the first eight years, it landed only 100,000 customers. But with the advent of smartphones and online data-storage products easing such fears, Intuit has seen about 300,000 more customers in the past four years, Wernikoff says. About 40% of first-time customers are trying online products. “Next year, it’ll be the bulk of our new users,” he says.
The emergence of mobile technology also partially explains the rush to cloud computing by entrepreneurs. Not tied to the office and typically dealing with a workforce that’s widely spread out throughout the country, business owners are opting for the any-screen-anywhere strategy.
“Consumers want immediate access to information wherever they want,” says Kevin Garton, chief marketing officer of The Neat Company, which recently released cloud and mobile versions of its document-filing system — NeatCloud and NeatMobile. “Cloud acts as the central database and as the synchronization device for desktop and mobile devices.”
With so much data stored, cloud companies can also dive deeply into customers’ usage patterns for information that may prove useful. For example, FreshBooks offers a feature that compares your business’ performance with competitors in several benchmarked areas, including how long it takes you to get paid and the average invoice size.
QuickBooks has a feature that can comb through your transaction data from the customer list and filter information on those who haven’t visited in 12 months. Business owners can use the information to, say, offer a special discount.
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