I was just briefed yesterday by Raju Vegesna on the launch of Zoho Books, Zoho’s new on demand accounting solution for small businesses. With Zoho Books, Zoho fills in a critical application that has been missing in its portfolio of more than 25 cloud-based applications for small businesses.
The first version of Zoho Books will be a standalone accounting solution, but later this year, Zoho will add tight integration with some of it’s other apps, such as Zoho CRM and Zoho Support (see my recent post). According to Raju, Zoho wanted to get the accounting functionality right before focusing on integration and other extras. Some of the key takeaways from my briefing include:
- Zoho has covered most of the accounting basics. The solution features a dashboard, with tabs from which you can create and send invoices, see profit/loss statements, look at income and expenses, etc. Once you create an invoice, you can email it to customers, and set up a link so customers can make direct payments to you online via PayPal, Google checkout, and Authorize.net. You can set up automatic notifications, reminders and thank-you emails as well, and create recurring invoices. Snail mail is also an option.
- Zoho Books will help users to manage bank accounts, and view bank and credit card statements. Right now, users need to enter third-party financial information manually via a .csv file, but later this year, Zoho plans to add direct connections to banks to automate the import process.
- Zoho has also taken steps to reduce the fees that Zoho Books customers pay for PayPal transactions by teaming up with PayPal on the Business Payments on the PayPal X platform. This cuts PayPal transaction fees for Zoho Books users to a flat $0.50 per payment—instead of the standard 2% to 3% of each transaction. Since 70% to 80% of Zoho customers use PayPal as their primary payment method, this is a pretty big selling point for the solution.
- Zoho Books was designed with non-accountants in mind. The interface uses terms such as “money in” and “money out” instead of accounting jargon. But small businesses that use an accountant to manage their financials can set their accountant up as a Zoho Books user. Accountants can also use the solution to manage multiple small business clients simultaneously, as separate organizations.
- Zoho is addressing multi-currency needs. At launch, Zoho Books enables users to define multiple currency types. Initially, the user will need to supply the exchange rate manually, but later this year, Zoho intends to automate this through an integration with XE.com currency exchange.
- The look and feel are very customizable. Users can configure logos, signatures, tax settings, email settings, etc. from the settings module.
- Integration is basic today, but Zoho has big plans. As I noted, today, you can import data into Zoho Books from spreadsheets, Zoho CRM, Zoho mail, etc. You can also view every module of Zoho Books in Zoho Sheets as a spreadsheet, or export it to Excel. Zoho also has a data migration tool to migrate Intuit QuickBooks data to Zoho Books. Looking ahead, Zoho plans to tightly integrate Zoho Books and Zoho CRM to create a seamless order-to-cash workflow. Zoho also plans to integrate Zoho mail with Zoho Books.
- Pricing starts at $24/month for 2 users, and $5 per user for additional users. If you sign up for an annual subscription (instead of paying monthly) you get two months free. The solution is launching with a 30-day free trial.
With Zoho Books, Zoho is taking aim at Intuit QuickBooks in the U.S., and similar entry-level accounting solutions in other countries. In its first iteration, Zoho Books maps to QuickBooks Online Essentials, but down the line, as Zoho adds more functionality, it could add a higher-end solution more comparable to QuickBooks Online Plus.
Interestingly, Zoho recently announced Zoho CRM integration with QuickBooks, and according to Raju, Zoho will continue to support this even as it introduces its QuickBooks rival. But coopetition is nothing new for Zoho. And, you don’t need to look any further than its relationship with Google to see that this is an area in which it excels. Although Google and Zoho have several competing applications, Zoho apps are a top seller on Google Apps Marketplace and integrate with Google Apps. Zoho Books, of course, will be in the Google Apps Marketplace from day one.
While many on demand accounting start-ups have set their sights on the QuickBooks market over the past few years, they haven’t really made much headway. Zoho, however, is a different animal and should give Intuit a bit more pause for concern. Not only does Zoho already have millions of free and paid users around the globe for it 25 solutions, Zoho is just one part of Zoho Corporation, which provides enterprise level business, network, and IT infrastructure management applications, and software maintenance and support services to some of the largest companies in the world. This not only gives Zoho a lot of expertise to draw on to add new functionality, but the financial staying power to be a serious contender.