Demand for accounting systems is on the rise in South Africa as companies realise the importance and value of running their businesses in a more efficient manner.
Gary Epstein, MD of QuickBooks, says businesses are waking up to the necessity of running their operations in a professional manner.
In addition, computers have become even cheaper, opening the door to small businesses running sophisticated financial systems.
“More and more new businesses are starting up and they want proper accounting software to monitor and control their affairs more effectively,” Epstein says.
Andy Kudla, MD of Omni Accounts, says demand is high for the more established accounting and payroll software brands, and new entrants tend to battle as the market is conservative.
“The government initiative to encourage small business development is bearing fruit and thousands of new close corporations are being registered each year,” says Kudla.
“In addition, while people may want to hold off on upgrading hardware such as computers, they do need to put in the measures and controls provided by a good accounting software package.”
David Greenleaf, commercial director at Ability Solutions, says there is a high level of activity in the accounting software market at the moment: “The buoyant economy means existing companies are expanding and new businesses are opening their doors.
“The boom also increases pressure to ensure the smooth running of these businesses. Companies are placing more emphasis on their systems and solutions,” says Greenleaf.
Companies are also investing in new solutions to take advantage of the software advances of the past few years.
“It has been seven years since the Y2K bug, and companies are now again prepared to revisit their software in an effort to gain a competitive edge,” Greenleaf says.
Turning to pricing, there are a number of options available in the market, says Greenleaf.
At the lower end of the market, business owners can walk into a store and buy an off-the-shelf accounting solution.
“Another option is software solutions where the client pays a once-off licencing fee. With that, an annual maintenance/enhancement fee entitles users to updates that address changing statutory and accounting requirements, as well as new features and upgrades to the software,” Greenleaf says.
Accounting and payroll software can also be accessed via a rental arrangement, but the uptake is slow.
Now, after many years in the doldrums, there are signs that the South African hosting environment is beginning to mature. Service providers host clients’ applications on their systems and they charge their customers a monthly fee.
Ivan Epstein, CEO at Softline, says internationally the accounting and payroll software market is growing, but in South Africa the dynamics are slightly different.
“South Africa’s huge emerging middle class is set to have a significant effect on the industry.
“Coupled with the general consumer spending boom, this is driving growth in the economy and creating a very favourable climate for business expansion,” Epstein says.
He says, as a result, the industry is seeing double-digit growth and this is likely to continue for the next few years.