How do the new breed of online sign-up Accountancy Software applications, such as Xero compare with the established solutions such as Pegasus Opera 3?
For many reasons, the answer is that they don’t compare - which is something that is presently not clearly identified by any of the software vendors. The products are designed to be different as each is primarily aimed at businesses which are at different stages of evolution.
A car analogy, one which would be commonly used in the IT industry to explain such issues, would be “that of a two seated sports car compared to a people carrier”.
Essentially they perform the same function, in that each will get you from A to B however they are aimed at individuals which may be at a different time of life, with completely different requirements.
The benefit of highlighting the difference is that it can save immeasurable time as it diminishes the possibility of businesses selecting the wrong solution.
Both products could be said that they complement each other as they both are web enabled with the obvious benefit that they can then be accessed anywhere.
Xero is very much a WYSWYG type application, designed for simplicity and aimed at start-up or small businesses, which may not have internal accounting resource but require immediacy, ease of use and be of minimal expense. As the accounting requirements of such organisations for which Xero satisfies, is straightforward, configuring the software online is also simple.
This allows businesses to implement Xero themselves without third party assistance which means the whole process is both quick and therefore inexpensive.
With a 30 day trial period and no minimal term, it also means that start-ups and small businesses can afford to subscribe to Xero, use it and then subsequently decide whether it satisfies requirements without a long evaluation process or worrying about losing any investment made in both time and money.
PEGASUS OPERA 3
Pegasus Opera 3 also has an online option via its Pegasus Business Cloud subscription service – this and the fact that it is also an Accounting Software Solution for Business is where most of the similarity ends.
Pegasus, based in Kettering and part of the considerable Infor group, have been developing Accountancy Software for over 30 years. This means that the software has evolved to cater for the needs of established, small, medium and growing businesses which unlike Xero may have finance teams. These businesses would generally require a greater degree of functionality when compared to a business start-up.
Pegasus Opera 3 is easy to use once configured, however like similar mid-range accounting software solutions with more functionality; it does require assistance in implementation and subsequent user training to ensure that the most is made of its potential.
Both Xero and Opera are parameterised, which means that the software can be adapted to suit however because Opera 3 is designed for businesses which may require more complexity within their processes, Opera has a much greater degree of flexibility allowable within its parameters.
This is why the comparison between software such as Xero and Opera 3 is not warranted; they are both excellent solutions but aimed at businesses at different stages of their evolution.
An example of such is the management of the general ledger's chart of accounts – Xero already comes with a pre-defined chart of accounts suitable for most start-ups however because Pegasus Opera 3 is catering for the larger entity where there is no consistency in requirements, Opera 3 requires the creation of a structure from scratch, which has the benefit that the chart of accounts can be configured to suit.
As necessary for the requirements of the targeted businesses, Opera 3 has a greater degree of flexibility in transactional analysis and the associated reporting, however Xero has simplicity built in to a pre-defined structure which is perfectly adequate for its users.
Without going into the specific functions of either product, online Pegasus Opera 3 is described as a modular solution , which can again be attributed to the fact that larger entities may allow a division of labour. Xero in comparison does not differentiate as clearly between different functions - again both solutions suit their particular target market.
Xero and Pegasus Opera 3 allow for enhancements – again there is subtlety in how this is managed and in both cases the idea is not to radically enhance the software but to provide proportionate changes to allow for differences in operation demanded by the business concerned.
Specific reference is made by Xero relating to its direct links to bank accounts with facilities such as automated bank reconciliation.
This again has to be tempered as matching transactions automatically is dependent on exact matches to value and references between the bank and local accounting transactions. This makes it a practical solution for companies with a small number of transactions, most of which are generated via Xero which then ensures the matching process is seamless – this however makes it less pertinent to companies which have higher volumes of transactions, which would potentially be using a solution such as Pegasus Opera 3.
Again the purpose of this article is not to make specific comparisons as features pertinent to the ideal Xero user would not necessarily be appropriate to a business that would use Pegasus Opera 3.
Traditionally online accounting applications like online Opera 3 have been sold by specialist accounting software vendors, which may involve a long procurement process to ensure the product meets requirements. This would then be followed by an implementation process.
With the advent of the web and the emergence of online accounting software like Xero, the mentality is that the CFO’s in businesses now want the opportunity to evaluate products themselves and also have greater clarity of potential costs prior to engaging with any software vendor.
To satisfy this evolution, Pegasus Partners such as Cloudsis provide easy access to on-line evaluation systems, on-line demonstrations by its product specialists who can offer advice on specific requirements and clear pricing information.
Both Xero and the online application Opera 3 Pegasus Business Cloud are available by monthly subscription however as would be expected of any product which necessitates far more features, Opera 3 comes with a higher price tag.
Xero offers no contract term however Opera 3 because of the greater complexity has a minimum term of 12 months.
To conclude both Pegasus Opera 3 and Xero are excellent online accounting solutions with all the benefits that the Cloud brings however they are complementary products which satisfy the business at different stages of development.
Xero can be suitable for small businesses, conversely if your organisation is growing and requires more functionality not available within Xero, Opera 3 is the perfect solution.