Ireland has thousands of accountants, and very few leave practice to become entrepreneurs. Chartered accountant Tony Connolly took the plunge and it has been a long and winding road for his creation, AccountsIQ, to make its mark. Finally though, the company is gaining decent traction.

“My wife remarks to me now and again, just remind me Tony why you left being a partner,” says Connolly. “On the other hand, I think entrepreneurs don’t necessarily do things just to make money. They have a vision and like to build things.”

When he practiced as an accountant, Connolly was the consultant variety, working with tech firms to implement large-scale financial reporting infrastructure in Ireland and the UK.

“Sometimes the advantage in consultancy is that after you go and tell people what they should be doing, you leave the scene and they still have a lot of work to do. When you are doing it yourself, you realise this isn’t as easy as you might think. Despite going through downturns which weren’t fun, I very much enjoy it. I like to be able to visualise something and put it on a whiteboard. Steering that idea to fruition and seeing what the end result is very motivating.”

Finance Partner

Based in Blackrock, with a sea view overlooking the Dart station, the AccountsIQ office has seen a lot of coding. The product is a type of ERP system designed for businesses and organisations with multi-locations. Using the internet, the IQ system pulls financial information from all over the place so the chief number cruncher has a complete overview of what’s going on.

In Association with

The system also works well for large accountancy firms. An important client for AccountsIQ is PwC in the UK. They use AccountsIQ, branded as ‘My Finance Partner’, to interact, monitor and assist clients.

“PwC’s concept of My Finance Partner is that they can approach growing businesses and say they’ll be there as an outsource provider. They can do all the back office work on the platform and look after the accounting and provide follow-up advice through this medium. We have trained over 40 of their people on AccountsIQ so they treat it almost like their system,” Connolly explains.

One of the reasons PwC selected the IQ platform is that that could tailor it to include their own intellectual property. The due diligence process was lengthy and extensive, as PwC can’t afford any security hiccups with an offering like this. With one of the Big 4 accounting firms as a reference client, that’s made the sales job to potential new clients that much easier. BDO is now a customer and so is Grant Thornton.

Patient Investors

As with any software project, investors in AccountsIQ have had to be patient. Accounts for the operating company Visor Ltd disclose equity invested of €7.3m at the end of 2014 and accumulated losses of €6.7m.

Connolly got going with his project in 2004 and spent the next three years developing the code, “We developed it from scratch and it took 50 man years, because with an accounts package you can’t start selling with a debtors ledger, you have to have all the components. The architecture for the system is very robust, though that’s not to say we didn’t get some things wrong during development. Some things didn’t work out in a live environment and we had to re-engineer them, but we never had to go back to the drawing board.”

It was Connolly’s bad luck that just as AccountsIQ was ready for market in 2008, the Irish economy cratered and there was distress in the UK too. “Nobody has any interest in our system,” he recalls. “They were just trying to survive.”

Eight years ago, Connolly was also ahead of the curve with the cloud computing proposition, especially when a key target market was accountants. “It wasn’t called cloud back then and people had a misconception about it, even when though they were booking airline seats and doing banking on cloud solutions.

Reference Sites

“Accounting firms are conservative by nature and would not be early adaptors of technology. After we gradually built up a user base, we were able to show with good reference sites that our system does work. And while we were doing that, the cloud was taking off anyway.”

Clouds are above, and so is Heaven, many people believe. No surprise then that the Dublin Diocese of the Catholic Church has seen the light about IQ’s merits. According to Connolly, the diocese has hooked up 170 parish offices to HQ using IQ. In market terms, AccountsIQ is positioned above Sage and below SAP, says Connolly. “Our system has to be easy enough to be used by a small parish or an Insomnia shop, yet sophisticated enough to consolidate all the data.”

Visor Ltd booked a loss of €680,000 in 2014 but sales have been growing at a 50% clip in the past three years. Turnover from recurring revenue is now in the region of €1m per annum, a level that Connolly describes as an initial benchmark. “Based on our current growth rates we are probably going to break even during 2016,” he says.

Some savvy investors expect AccountsIQ to go much further. Software sector veterans Gerry McKeown and David Mee are directors and shareholders, along with Edmond Murphy, who cashed out recently from an online student flights venture.

Economic Buzz

“You can feel there is much more buzz about the economy in terms of things moving forward and companies wanting to do things,” Connolly remarks. “Every company in the world needs an accounting system so there are always going to be lots of players in that space. In our multi-site, multi-company niche, we believe our system is stronger than almost anything else in the market.”

Though €7m equity is sizeable for an Irish software, it’s pocket change in an American context. In Connolly’s view, too many Irish software companies are under-funded to tackle markets outside the country and end up selling out too early.

“I’ve noticed that more software startups from Ireland are locating in the UK because of the better capital gains tax regime. This is something the next government should keep in mind.”

Photo: Tony Connolly (centre) with AccountsIQ colleagues Darren Cran (left) and Gavin McGahey. (Pic: Karl Martini)