Become acquainted: E-conomic

A newcomer on the UK scene, e-conomic has been running since 2001 in Denmark and currently boasts over 13,500 clients and 1,000 accounting firms using its web-hosted accounting services. The UK subsidiary was established in 2007 to provide sales, support and marketing in the UK and is busy rolling out the service to businesses over here.

Working with accountants

Like many software as a service (SaaS) accounting solutions, e-conomic is targeting accountants as potential introducers of business. All accounting practices receive a free login to the Administrator module, enabling them to oversee what their clients are doing and to review their bookkeeping and periodic accounts, offering pro-active advice and assistance.

They can set up new clients in-house before they start to use the service, and can tailor menus and access rights to suit the client's needs. Firms can opt for e-conomic to bill clients direct or they can receive a global bill for their clients which they can then choose to either absorb within their fees or recharge at whatever fee they wish - or a combination of both on a client-by-client basis.

What's on offer?

All e-conomic subscribers have access to the Base version which includes:

General Ledger

• Standard charts of accounts with automatic control accounts, etc.
• Calculation of VAT - invoice or cash accounting, on standard basis or Flat Rate Scheme
• A range of standard reports with e.g. comparison with last year and budget.

Accounts Payable

• Simple "booking" (e-conomic's term for what accountants usually call posting) of supplier payments
• Automatic invoice-to-payment matching
• Full multi-currency accounting with automatic daily updates of 37 exchange rates
• Aged creditor analysis.

Accounts Receivable and Invoicing

• Invoicing using product/service list, using PDF format and automatic delivery of invoices by email
• Optional design of invoice layout with your company logo
• Automatic invoice-to-payment matching
• Aged debtors analysis
• Turnover analysis reports.

The service is available in two versions, Solo (£13.50 + VAT per month) and Multi (£27 + VAT per month) - subscriptions are payable quarterly in advance and include online and telephone support. The basic functions in Solo and Multi are identical, the only difference between them is a limit to the number of transactions. Solo is the ideal solution for small companies with up to 2,000 transactions a year. Multi gives access to an unlimited number of transactions. Additional users cost £9 per month + VAT for both versions - this can be used as a full multi-user real time system. To maximize the benefit of accounting in an online environment, e-conomic offers free access to the service to a subscriber's accountant or external bookkeeper to facilitate collaborative working and real-time sharing of data.

In use

Having signed up for a free trial account, I was immediately struck by the very simple fixed screen layout:

• The upper grey area contains dialogues, forms and the posting area
• The lower white area contains lists - invoices, customers, suppliers, or displays reports
• Tabs to move between sections (settings, bookkeeping, sales, report, dialogue and help) run along the top of the screen
• Menu options relevant to each section are listed down the left hand side.

The layout is easy to follow although a bit plain, which initially seemed rather out of step with the more flashy, image-laden SaaS offerings on the market. But this means that most importantly e-conomic is very undemanding on your browser, so speed is not hampered by lots of pretty but unnecessary graphics. I get the feeling that speed of response has been made a priority in the design to help users over the transition from a desktop to an online application. However, it's not the prettiest of interfaces and there are no dashboards or graphical displays of the accounting data. Some of these are planned for future releases.

The standard chart of accounts follows the standard Sage numbering sequence (4000 for sales, 5000 for cost of sales, etc) and you can choose one of four standard settings (limited company, partnership, sole proprietor and sole proprietor without VAT) to get you started, so you can be up and running within minutes. If you provide e-conomic to your clients as an accountant or bookkeeper you can set up the chart of accounts to suit your own back office systems. Import of data into final accounts packages is very straightforward.

Transactions such as purchase invoices are entered as journals in a day book, and then posted as a batch by clicking Book entries. Data entry screens are identical whichever section of the accounts you are in, making learning the system much easier. I noticed that the expense type or nominal code for purchase invoices is called the "contra account" in e-conomic, not be confused with what we normally refer to as a contra account.

Sales invoices are entered under the separate Sales tab where the double entry is handled seamlessly. I was pleased to find that data entry can be completely keyboard driven, no need to keep reverting to the mouse, and there's even a batch-posting Quick Daybook option for those needing to enter volumes of data.

Where you are administering e-conomic for clients you can configure the service so that you have to "approve" certain entries before they can be "booked", giving you a chance to correct errors and ensure that the client's records are kept in good order throughout the year. In many cases you may not want to have to approve invoice postings, but you could just activate this control for nominal ledger journals.

The bank reconciliation is designed to be carried out against an imported CSV file from your online banking service, which looks like a neat and very straightforward operation, but it can also be done manually just from the opening and closing bank statement balances. There is a detailed help sheet explaining how to do a reconciliation.

In fact, data import is a strong feature of e-conomic. You can import customer databases, supplier and product lists, opening balances. Even invoices and batches of transactions can be imported via Excel using a simple mapping utility. The company is experimenting in Denmark with the import of data direct from scanned OCR'ed documents.

Reporting

Reports can be viewed on screen, printed or opened directly in Excel, where they come through perfectly useable but with no formatting to pretty them up so you are left to sort out the presentation yourself. However, once again this means that processing speed is very quick. The list of available reports covers all the basic requirements including the ability to analyse revenue and margins by customer, product or employee.

More sophisticated users will need to be adept at manipulating their data in Excel to get more complex reports or charts, but the export facility is a button on every report screen and it's quick and simple to use.

VAT cash accounting and Flat Rate have only been added this month and when I reviewed the service there were no VAT reports to show the transactions included in VAT Returns prepared under cash accounting. e-conomic says that this will be added in the next month, but the omission might deter some accountants with small businesses at the moment. Curiously, the selection of VAT scheme is made when generating the VAT Return, not as a system setting. This has the advantage of enabling you to easily compare your VAT liability under the alternative schemes, but I would have preferred to see this option hidden away from curious and inexperienced users. Online filing of VAT returns is also planned for the future.

Sales invoices are generated as a nicely presented, customisable PDF document, complete with your own logo, header and footer. I was disappointed to find that very few reports allow you to drill down on the figures, a useful - if not essential - feature which I am sure the company will be under pressure to remedy before long.

The Dialogue tab contains messages from e-conomic, or from other users in a multi-user setup, a to-do list which you can organise into a follow-up list and an activity log.

Help gives access to 22 PDF user guides covering all the basics, although nothing on VAT accounting or using reports. e-conomic also provides fortnightly free training sessions for new users and unlimited access to the helpline for questions and guidance on using the system.

Optional extras

One of the strengths of e-conomic is the useful range of add-on modules available (at an additional monthly cost, except for the API) to adapt the service to your specific needs:

• For those with IT skills there is a freely available API (Application Programming Interface) which enables you to exchange data in XML format between e-conomic and other in-house applications such as your web shop, cash register, CRM system or any other database system. This means that data can be synchronized and need only be entered once for use in multiple applications.
• Dimension adds departmental analysis and reporting
• Project Accounting
• Scanning enables you to scan documents such as purchase invoices directly into your accounts to store alongside the accounting entries
• Stock Management gives you sales and purchase order processing and full stock control
• Subscription is an unusual but particularly useful feature designed to add automatic production of recurring invoices for subscriptions, regular services, membership fees, etc.
• Fixed assets and Prepayments modules are available for firms to implement with their clients, if they so wish.

Conclusion

e-conomic has a strong track record in Denmark, where KPMG uses it to manage over 1,300 SME clients, and is currently working with the company to enable them to use e-conomic to produce final accounts too. Potential users will be encouraged by the adoption of the service in the UK by Vantis, one of the first firms to use online accounting with its Easycounting. e-conomic is keenly priced and should attract firms with SME clients, although it may first need to demonstrate a full range of functionality and reporting on VAT to satisfy smaller clients' needs.

Like many other SaaS newcomers, e-conomic runs a continual improvement programme and can respond quickly enough to the demands of users and their accountants - there were a number of important improvements even in the few weeks during my review, and I got the impression from the UK office that they are keen to give UK accountants what they need to make the service work for their clients.

The very stripped-down look and feel will suit those who want a speedy, no-frills accounting experience. If you want graphs and dashboards though you'll need to look elsewhere or wait for a future update. The add-on modules, and in particular the API, will attract users who want to do something a little different or who need to integrate their online accounting with other applications.

In contrast to other specifically small and micro business SaaS offerings, its range of advanced options will open up the larger SME market to e-conomic and attract more sophisticated users. Much now depends on its marketing strategy and its ability to persuade UK accountants to promote e-conomic to their clients in the face of growing competition in what is still only very early days for online accounting.