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Why We Need a Cloud Accounting Communications System

Apr 7th 2016
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I believe that if accounting software really wants to be at the center of a business, it also needs to act as a communication hub, which it currently isn’t doing a stellar job at. This article explains how cloud accounting could communicate better.

There are many solutions currently in play among the various cloud accounting software providers, but none offers a complete solution. They only offer bits and pieces of the communications puzzle, resulting in a fractured landscape.

As a guy in his mid-30s, I feel I’m still a relative youngster in the accounting world. However, I do remember the first time I got hooked up to the Internet and learned about email and IRC (Internet relay chat – an early form of instant messaging). This was back in the mid-1990s, and I thought that emailing someone was kind of ridiculous, because in order to send the message, you had to tie up your phone line with your dial-up modem.

The vast majority of the time, the person I was emailing wasn’t online at the same time, which meant I’d have to keep on dialing up just to check and see if I got a message. And this was no quick task because connecting via dial-up could take a minute or so. This is all to say, that my first impression of email and IRC was to conclude, I’m much better off picking up the phone if I wanted to reach someone.

Things progressed and when the mid-2000s hit, the phone stopped being my primary mode of communication as I found email better. Around that time, I ran an Internet business and I was adamant that we still needed a phone number for our support service, even though it could mostly be done – and done better – via email.

At both times, in the mid-1990s and the mid-2000s, I was hesitant about moving to the new form of communication. Moving to the new form didn’t mean completely abandoning the old one, but instead replacing it as the primary method.

Now we’re in the mid-2010s, and I feel that email is becoming what the phone call used to be. It’s still a great tool, but it seems outdated. There’s now a plethora of communication methods: texting, instant messaging, video chat, social media, and probably some other ways I don’t even know about (not being a youth myself anymore).

Business Communication Needs

A business needs to send and receive documentation. In the mid-1990s, this was mostly done by snail mail and fax. Even now in the mid-2010s, in the age of email and digital receipts, some people still prefer or require that something be sent via those methods. However, email is the dominant method by which business documentation is sent and received.

While email is great for documentation, it’s not necessarily the best tool for documentation needs. A lot of business is done via apps, where data lives in the cloud. But even though our email often lives in the cloud as well, it seems there’s a disconnect between those two data sets.

On top of sending business documentation, there’s also a need to formalize transactions. This has traditionally been done offline, whether it be signing an agreement or sending a check. Now, there are services that enable digital signatures and online payments. Some online accounting software can allow a customer to accept a quote online and most allow a customer to pay (mostly by credit card, however).

Lastly, a business has to communicate with customers during the sales process. And then, after the sale is made, they need to offer after-sales support. To say the least, a business has many communication needs.

I think it’s fairly impractical to ask online accounting software, without the use of add-ons, to fulfill all these needs. But I do think that when the communication surrounds financial transactions, accounting software can do better than it currently is.

Currently, cloud accounting software makes me feel like I’m sending word docs back and forth via email, adding notes to it as I collaborate with others. There are different versions floating around and I don’t know who has the master version. This frustrates me, as I’ve experienced working with Google Docs, and know that real-time collaboration and communication are possible. I want my cloud accounting software to be the same.

Current State of Cloud Accounting Communication

Cloud accounting software offers various methods of communication, which differ depending on whether the provider is QuickBooks Online, Xero, Zoho Books, FreshBooks, and so on. Here’s a sampling of the communications systems I use for communicating with customers, clients, and team members.


FreshBooks was one of the first cloud accounting software products that I can recall that allowed customers to dispute their online invoice from the web app. The way it works is that if a customer creates a dispute, the business owner receives an email with the message.

To reply, the owner logs in to his or her FreshBooks account and types a message, which sends an email back to the customer. I think it’s a bit clunky, because you have to login to reply, but I like that the entire dispute process is documented and attached to the financial transaction. QuickBooks Online has a similar function, where you can comment on invoices and even add attachments. And like FreshBooks, you need to login to reply back.

Zoho Books and Xero work somewhat similarly, but while they allow customers to comment on invoices, a business owner can’t reply back through the system. This means that if a customer sends a message via the invoice, the only way to respond is to do so through an out-of-system communication. This makes it more cumbersome to communicate and doesn’t document the whole conversation in one place.

In-app Discussions

Xero gives you the ability to discuss transactions found in the Banking page. The way it works is that if you have a question about a transaction in the bank feed, you can create a discuss item. Unfortunately, discuss items are not part of the notification system, meaning an email won’t be sent to other users notifying them of the new discuss item, nor will a notice appear in the in-app mailbox. The only way to know there’s a discussion item is to come across the transaction within the Banking page.

Accountant Requests

QuickBooks Online Accountant has a messaging system for requesting documents from other users. You need to sign up for a free account to use it. It allows you to request specific documents and have a discussion around it. You have to be logged into QuickBooks Online to upload documents and reply to messages, but it is a two-way communication system.

Once the document is in QuickBooks Online/Box, you can view it and download it, but it can’t be associated with any transaction directly (you’d need to download and reattach it). Xero has similar functionality with its practice manager app WorkflowMax.

Email Integration

Xero can link up with Gmail to display all email communication with a contact. To link the email to the contact, the system searches the “to” and “from” fields for the email address or the subject and body for the exact name. If that is found, the email shows up in the contact’s email feed. This is a brand-new 2016 feature.

Permanent URLs

With Xero, as far as I know, every transaction and item in a list has a permanent and unique URL. This means that if you want to talk about a transaction with a team member or client, you can send them the URL and say, “Check out this link please.” I think this is a definite time-saver because there’s no ambiguity surrounding what particular transaction you’re referring to. This isn’t specifically a communication tool, but it is an aspect of the software that makes communication easier.

The single-biggest feature I would like to see is the ability to enable communication around any transaction. Just like how software, such as QuickBooks Online and Xero, allows you to attach a file to most transactions and list items, it would be great if you could attach notes, as well.

Notes would need the ability to be shared both internally and externally. For the notes that you only want users with the correct access rights to see, you’d share internally. For customer/vendor notes, like on an invoice/quote or bill/purchase order, you’d want to share externally. The way I think it could work is if by default notes were internal, but came with a “click here to share with customer/vendor” option.

Now that I’ve established that I would like notes, how would all parties involved get notified when new ones are created? Even though I’ve railed against email in this article, I think it would be the best tool to notify the right people that there’s a new note. However, I do think it would be good to have an option to disable the notifications. An in-app notification system could alert users of new notes, as well.

The next thing to figure out is how exactly the messaging system works. I think most software vendors would find it easiest to have the user login to the system and do communication in-app. For ease of use though, I’d ideally like to see a system that allows the user to simply reply to the email, in the same way that support ticketing systems work.

The main goal of my ideal system would be to make it so that customers aren’t forced to sign up for yet another account. So, even though a customer may need to click a link to get access to an invoice and respond to a note on it, the links wouldn’t require the user to login. Currently, FreshBooks, QuickBooks Online, and Xero don’t require a user to login to view invoices.

But what about security? If anybody gets a hold of the invoice URL, this means they have access to the invoice and the communications history. I was wondering about this, but I don’t have any good answer. It seems that the top online accounting software companies rely on the unique URL to prevent access.

So, to summarize, this is what I would like to see in a cloud accounting software communication system:

  • Notes that can be attached to both transactions and lists.
  • The ability to mark notes as either internal or external.
  • Notification alert options (both within and outside of the app).
  • The ability to easily reply to notes, without the need to login or create an account.

What are your thoughts? Is this asking cloud accounting software to do too much? Do you have similar communications needs? Do you have better ideas surrounding how a cloud accounting communication system could function?

The original post appeared on the Sleeter Group blog. Greg Lam will be speaking at the Accountex USA 2016 event in November. AccountingWEB and Accountex have partnered to bring you this content as we share a belief in the furtherment of the profession through greater insights

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