John Hewitt, Liberty TaxThe fact that Kashoo will now be privately labeled by franchisor Liberty Tax by itself is not important. The fact that this is the second such deal for the low-cost cloud software vendor–its first was Paychex in October—is very important. The most recent agreement was announced this week by Liberty CEO John Hewitt during the earnings webcast for his company's first quarter ended July 31. “We are testing an accounting package  that our franchisees can used to provide small business bookkeeping services,” Hewitt said.

The product will be known as Liberty Accounting while the other offering is Paychex Online Accounting. There is a race going on in the cloud for capital and more distribution channels. Kashoo is an example of both since Paychex took an ownership position of undisclosed size.  This coincides nicely with the announcement this week that Australian software vendor MYOB has made an investment in Acumatica. New Zealand-based Xero got $150 million, primarily from American investors, also in October, and is planning an IPO before its year ends on March 31.  FreshBooks raised $30 million in venture funding in July and a Forbes article said the company was forced to seek capital because of well-funded competitors. Do investors have more cents than sense? I’m inclined to believe that’s the case.

Last modified on Friday, 29 August 2014
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Bob Scott

Bob Scott has been informing and entertaining the mid-market financial software community with his email newsletters for 10 years. And he has been covering this market through print publications for 18 years, first as technology editor of Accounting Today and then as the Editor of Accounting Technology from 1997 through 2009. He has covered the traditional tax and accounting profession during the same time and continues to address that as executive editor of the Progressive Accountant.

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