Is there a future for the financial reseller channel?

Financial software resellers cannot give away accountancy software at the moment. While the UK may be emerging from recession, very few organisations are going to be replacing a core finance solution in the next 12 to 24 months. The picture for the channel is looking bleak, with growing numbers of companies now for sale.

But there are opportunities to leverage both existing skills and the installed base. As financial directors look to impose cost control over the business, automated purchase to pay solutions are gaining real market traction. Resellers that get into this market today will not only have a resonant message but will also attain significant vendor support, from training and marketing to implementation.

Insolvency Spike

As the economy finally edges its way out of recession businesses need to be on high alert: company collapses will hit record levels this year and stay high in 2011, R3, the insolvency body, has warned. And one of the main reasons for the post-recession spike is the increasing aggression of creditors as growth resumes. Top amongst that list will be HMRC, an organisation that has been extremely lenient over the past 18 months, allowing organisations to defer payment of VAT and National Insurance contributions.

That leniency is now coming to an end; and businesses now face the need to increase payments to address the backlog. Unfortunately for the financial software marketplace, this shift in attitude is coinciding with a time when the recession is actually biting hardest. Accountancy software resellers continue to face tough times as companies are typically not looking to replace this core solution. Simply finding new opportunities is demanding a massive amount of sales and marketing activity, whilst the increasing desperation of many competitors is resulting in software being given away at cost.

There is a growing realisation that this model is unsustainable. As a result, many financial software resellers are looking to sell their assets, ranging from the installed base associated with a specific product to the entire company. Others are looking to diversify, replacing one accounting solution with another. But it is not poor product functionality that is reducing sales: there is simply no demand for a new accounting solution in this market.
Market demand

There is, however, a massive need for financial directors to improve cost control. As the recession has taken hold, FDs have changed their focus from managing business expansion to imposing control over expenditure. The concern now is the lack of visibility over committed spend and the money wasted through poor, disconnected procurement processes.

And while organisations have put in place some point solutions to address endemic manual processes, 99 percent of companies do not have a holistic solution to automate the purchase to pay process.

Any reseller who can offer these organisations a quick way of imposing control over spend, deliver immediate, real time commitment visibility and offer rapid return on investment based on a reduction in procurement cost has a message that will have real resonance.

Furthermore this is a message that can be taken straight to the installed base; and leverages the existing skill sets and experience of staff.