Sage vs Xero vs Pegasus Cloud | Applied

Sage vs Xero vs Pegasus Cloud

“8 of 10 Accountants recommend Sage Software”, said Sage’s extremely successful advertising campaign of 20 years ago. Limited competition at the time made it easy for accountants and bookkeepers to recommend Sage 50 to SMEs, in the knowledge that they were recommending probably the best software in the market. Sage is still recommended as a solid reliable accounting system, because its name is synonymous with small business accounting software.

 

Sage is now running behind other accounting software due to their Cloud solution not meeting SME’s needs. Now, businesses have a greater range of accounting solutions to choose from that are instantly accessible online and providing significant benefits. These cloud based versions are showing improved service levels with the potential for cost savings and in some cases, a simplified and more streamlined solution.

We look at the benefits of three main cloud solutions for SME’s looking to grow their business in 2016, Sage, Xero and the fully integrated Pegasus Cloud.

Sage

Application

Sage is a UK company and has been building and supplying software to businesses for many years. Their best selling software is the Sage 50 product range, which is a comprehensive generic accounting application, built for small and medium sized businesses. There are Sage Additions which builds industry specific add-ons to extend the functionality of Sage 50 to a wide range of industry sectors. However, these have been reported as difficult to integrate and can cause problems when businesses grow larger than Sage 50 can handle.

You can purchase Sage software and therefore own the rights to use it and to install it on your Computer. Sage regularly updates the product with “New” features, so you are recommended to take out annual Sage cover which includes upgrades to the latest versions when available. If you don’t take out Sage cover then you will have to pay for the upgrades. Sage 50 tends to be sold as a 1 Company 1 user initial licence, so you will have to pay more for Multiple Companies and Users.  However, all this has recently changed with Sage announcing a number of improvements to the latest version of Sage 50, which notably includes “Sage Drive”, a feature that allows you to access and share your data via the Cloud.  They have also changed their pricing policy, so you can now pay monthly and receive automatic upgrades to the latest version.

 

Technical

Sage 50 software can be described as a “Client Server” application i.e. software is installed on a PC and a separate database is installed. Sage 50 Professional can be installed on a network, so that multiple users on networked PC’s can access the database, usually installed on a network server. The software is hardware dependent, so issues can arise when running the software on older PC’s with limited processing power and memory. Sage Drive appears to be an extension of this logic, by synchronising a copy of the database to the Cloud, where it is available for other users to access and update.

Although Sage Drive offers this new ability and is looking to be competing with cloud software versions, it has been reported that there are regular problems with connection and crashing.

Sage recommends customers to always upgrade to the latest versions, which can sometimes include more than just additional features. They also provide a download facility from within the software to download important bug fixes and enhancements, so users should regularly check for updates and/or bug fixes and download and install them. For non-technical users, this can be confusing and we find this is an area often overlooked by Sage users.

You are responsible for backing up your data and Sage 50 includes a backup routine which backs up the data files to a chosen location. This can be a backup disk, device or Cloud service.

Security

You are responsible for securing your data, by taking adequate steps to minimise the risk of hardware failure and ensuring passwords are used to access the application. This will include such steps as perhaps taking out an IT support contract and using a Cloud backup service that should be run at least weekly.

Usage

Sage 50 can best be described as a generic accounting application. As well as having to choose which version of Sage is suitable for your business, your users will also need an understanding of accounting terminology and practices to be able to use the software to its full potential. Training is highly recommended to gain a full understanding of how it can be used and configured. It is recommended that you use the services of an expert to set Sage up with a logical chart of accounts appropriate to your business and to generally give advice on the software and usage.

Sage 50 Professional comes complete with Quotations, Projects, Sales and Purchase Order processing, Products for Stock control as well as standard features for the control of Suppliers, Customers, Bank and Financial Reporting. Foreign Trader can also be activated for handling transactions in foreign currencies.

Sage 50 has a level of integration with Microsoft Office (Outlook, Excel and Word) to import/export diary event and contacts or export data to Excel. You can also import specific data using pre-supplied Excel templates for customer and supplier records, product and project records etc.

Within the Help section, there are a number of video tutorials and PDF guides to help familiarise yourself with this comprehensive application.

Although Sage 50 Professional looks like a good accounting application for growing businesses, the version is not bespoke and therefore you may not require all of the features and end up paying for more than you require.

 Xero

Application

Xero is a New Zealand based company who initially build their software for the NZ market. The rapid adoption of the service encouraged the developers to go global and the service was made available in Australia, the UK and the USA. Their growth has been remarkable from 200 customers in 2007 to 157,000 by 2013.

Xero is updated regularly, but unfortunately, due to their worldwide growth, we are seeing a slow-down in promised feature releases and general improvements for the UK market.

As with Sage, there is an Add-on market, which produces industry specific Cloud applications that integrate with Xero using Web services.

Xero is a simple accounting system that allows add-on applications for smaller businesses, however with a fast growing company or more than 50000 transactions per year this system will not be able to cope with high levels of activity or comprehensive requirements.

Technical

Xero is a hosted application (Cloud), which is accessible by subscribing to the service either directly or through a Xero Partner. The service is accessed using a Web Browser, so a reasonably fast internet connection is required to see the greatest benefits. Multiple users can access the service at the same time and data is updated in the background to avoid any conflict. New features are rolled out centrally by Xero and users are notified in advance of this happening. A service delivery infrastructure is in place to achieve 100% uptime (actual 99.99% since 2007) and data security, so subscribers do not need to do anything extra.

Security

Xero take security seriously, as you would expect from a global organisation hosting thousands of customers’ data. Security is continually audited and tested for potential breaches and comprises “Internet Banking” levels of encryption, biometric systems based restricted access and 24/7 onsite security guards at the hosting locations. Multiple copies of customer data is held at multiple locations for real-time protection and as a further safeguard, data is backed up daily. This compares favourably to desktop software, where your data is at risk from hardware failure, theft or data corruption from power surges. Furthermore, Cloud data is available for sharing online with individuals you invite to share your data.

Usage

Xero is a simplified accounting solution for small and growing businesses. Users do not need to have any accountancy training and can learn how to use it quite quickly following a short introduction. There are also short videos on the Xero website covering virtually every area for ongoing learning and support. Nevertheless, it is recommended that you use an expert to set up the system appropriate to your business needs.

Xero opens with a Dashboard summarising key information. This can be configured to a certain extent to display key indicators and bank accounts. Key data is linked to the underlying detail so you can quickly check movements and drill down into detailed data using the hyperlinks littered throughout the system. When you try to drill down to further information it can become slightly confusing and is not set up to deal with complicated invoices therefore project management, business intelligence and other complex business requirements will not be available at the moment.

The Xero bank feed allows you to link your Bank Account data to Xero, so it is pulled in daily for you to reconcile and track your cash flow. It is easy to use but can cause a few errors and will affect the invoicing and other areas of the accounts if it is linked incorrectly.

All reports can be output as PDF files or to Excel and there are Excel templates for importing data from other systems. Xero also has a tracking facility, which can be used for departmental analysis and reporting and the top version of Xero includes foreign currencies.

Xero also has a separate website for comprehensive context sensitive help and numerous short video tutorials to help users reaffirm and extend their knowledge of the application.

Xero offers a sophisticated yet simplified way for small and growing businesses to run their internal accounting. If you need more sophisticated features then it is best to view Xero as a ledger to pull together your financial transactions and look at the wide variety of add-ons that will possibly provide what you are looking for.

 

Pegasus Software

Application

Pegasus have been producing accounting, business and payroll software in the UK for more than 30 years and are now part of Infor, a global supplier of business solutions.

The flagship product for Pegasus Software is Opera 3 which is aimed at Small to Medium Enterprises (SMEs). Opera 3 is available in both network and cloud forms and over the past few years Pegasus have also been focusing on Web based applications to surround the core business applications – payroll self service, timesheets and shortly mobile sales.

As well as the ledgers and supply chain elements of the product, Opera 3 also caters for CRM, Construction, Manufacturing, Business Intelligence and Document Management.

There are a wealth of add on applications written by authorised developers who are also able to tailor the product for a user’s specific requirements, which is often needed at this level of the market. Unlike many other business applications, with Opera 3 customisation and add-on applications can be developed within the original software framework and not as an external bolt-on.

Opera 3 comes with an Annual Maintenance Contract that covers users for legislative changes especially for payroll and general enhancements to the product on an ongoing basis. Pegasus work towards releasing versions on a quarterly basis.

Opera 3 is supported and sold through an authorised Partner network throughout the UK and Ireland who provide customers with installation, support and maintenance as well as general business advice on the best way to run the system, now and in the future depending on the needs of the customer.

Opera 3 can be purchased on an upfront basis, monthly subscription or cloud basis which therefore does not tie up capital on the initial purchase of the product.

 

Technical

Opera 3 can be run on a standard network with multiple PCs accessing the programs and data. There is a MS SQL version for customers with large data sets. With Pegasus Business Cloud® all that is needed in order to access the software is a device that has access to a browser via an internet connection. The data is hosted in UK data centres and conforms to ISO 27001 standards.

 

Security

Using Opera 3 on a network, Pegasus provide backup routines within the software itself but it is the users’ responsibility to manage backups. The software also contains a Task Scheduler to enable a backup to automatically take place out of hours. Pegasus Partners will train customers on the use of backups and many also provide separate routines to back up total systems and provide hardware such as UPS power supplies in case of issues such as power cuts or surges which can corrupt systems.

 

Usage

Pegasus is a powerful accounting and business system typically used where integration across the business is required with some level of tailoring to the customer requirements. Opera 3 comes with 5 companies as standard, more companies can be added, if required, as can features such as multi-currency. As Pegasus is sold only through local Partners, it is the responsibility of the Partner to provide all the necessary installation, training and ongoing support which will be required in order to maximise the benefit a product like Opera 3 can bring to a business.