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AcctTwo Blog

What is True SaaS Software Accounting and Why Does it Matter?

Head Scratcher

When Choosing an ERP, HRM, CRM Solution, Know Your Technology

AcctTwo is a consulting firm that provides cloud-based technology and back-office software accountant and business  process outsourcing. We whole-heartedly embrace "the cloud" in both the solutions we provide and the tools we use to run 

our own business. One of the services we offer is to implement Intacct's best-in-class financial software for our clients, mostly small to mid-sized businesses across many different industries. Intacct is a cloud-based software-as-a-service (SaaS) vendor. With the term SaaS being bandied about lately, we felt compelled to explain what it really means and why we feel it matters.

New call-to-actionCharacteristics of a SaaS Vendor

The first characteristic involves how the software is bought and paid for. SaaS software is subscription-based, often determined by the number of users, and often with some up front implementation costs.

Secondly, the software is entirely hosted by the vendor. The third important feature is that the software architecture is multi-tenant and dependent on metadata structures. This means that there is one code base for all customers, and we'll explain in a bit why that's important.

The fourth trait of SaaS is that upgrades are often automatic and released frequently; they are often functionally very rich; and they require the vendor to maintain open communication with its customers, both to gather requirements for new functional changes and to keep them informed and educated on new functions and opportunities.

7 Reasons to Move to Cloud Financials Now White PaperThe last characteristic we'll mention here, although there are surely many more, is that SaaS software is configurable rather than customizable, meaning that the software can be shaped to each business without additional code being written, without the complexity historically seen with customizing an on-premise ERP solution, and without the knowledge and skills for this customization being locked away in the heads of a small group of programmers.

Who cares?

Well anyone looking at implementing or replacing their enterprise software should care at least to some degree. Subscription-based, cloud-based, SaaS solutions generally don't have the up-front cost associated with buying an implementation of on-premise software. SaaS vendors are responsible for hosting the software, maintaining their own hardware, guaranteeing performance and availability through SLAs that, if they're a reputable SaaS vendor, would likely blow any in-house IT department SLA for a small to midsized company out of the water.

Multi-tenancy allows for incredible cost savings for the vendor that are translated into cost savings for the customer. Upgrades can be instituted across all customers, if not at once, then far more quickly and cheaply than with any on-premise or pseudo-SaaS solution. 3rd party add-ons and integrations can be made available to everyone as well. Multi-tenancy allows the vendor to crowdsource statistical information across all its customers that provides valuable insight for upgrades and enhancements.

Data types that can be shared reduce cost and errors, and customers that develop or discover best practices can share that with the vendor who can then recommend those processes to all their customers, because they are all using the same code. Configurability rather than customization, again, takes the power and knowledge out of the hands of developers and puts it into the hands of the customer and their business analysts. This same configurability also translates into adaptability and flexibility, so that organizations can take advantage of new opportunities and adapt to a business climate that has never in history been so fluid.

Conclusion

This is not to say that any true SaaS solution is a good one, or that any solution that isn't truly SaaS is a bad one - all businesses have different needs and any solution, SaaS or not, can be a poorly constructed one. This is, however, quite clearly the future of enterprise software, and you have to ask yourself whether you will take advantage of these benefits or let your competition take advantage, leaving you with a costly, unsupported, inefficient enterprise software system that will, in the not too distant future, be considered a relic of times past.

 

About AcctTwo

AcctTwo is a leading consulting firm and reseller of cloud-based accounting and financial management software. AcctTwo’s sophisticated systems solve the issues growing middle market companies face today. AcctTwo also outsources back office processes, allowing clients to focus on the core competencies of their business. AcctTwo provides the people, processes, technology and office facilities to perform these functions, while allowing clients to collaborate interactively through an on-line portal.

AcctTwo is headquartered in Houston, Texas. For more information, please visit http://www.accttwo.com or call 713-744-8400. Connect with AcctTwo on LinkedIn, Twitter, Facebook, Google+, or Youtube.

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AcctTwo and the AcctTwo logo are trademarks of AcctTwo Shared Services, LLC. All other company and product names mentioned herein may be trademarks of their respective owners

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