As the low cost alternative to accounting operation, more businesses are switching their bookkeeping software over to cloud-based Reckon (ASX: RKN) following its transition to cloud-based software, boosting its clientele by 22%.
The investment in their tech stack continues to grow the business to now boast more than 106,000 small business customers with a variety of further upgrades flagged in response to rising customer interest, driving further revenue growth.
“Our transition from a desktop software business to a cloud software business continues at pace. It is pleasing to see cloud adoption across all business divisions, with growth achieved through both APS clients and our small business clients,” said Reckon CEO, Sam Allert.
“We have returned the overall business to revenue growth and with our expansive client bases, our talented team, and new cloud product launches across all groups, we are very well positioned to continue this trend.”
For the Half Year ended 30 June 2021, Reckon increased its revenue by 5% to $37.5 million where the biggest benefit from the tech upgrades has been achieved at its bottom line with 88% of all revenue being recurring under a subscription basis. This resulted in an 18.6% increase in NPAT to $5.4m. Shareholders were rewarded with a fully franked dividend of $0.03 per share.
Further strengthening its balance sheet alongside its investment in tech, Reckon reduced its debt from $17m to $13m over the Half Year
With its emergence as the low-cost accounting software of choice amongst small businesses, the Company has flagged plans to introduce new invoicing and timesheet mobile apps which are expected to launch before the end of 2021. These come at a time where remote working has become so widely adopted that the automation between apps and cloud-based platforms will save users a substantial amount of time without the need for manual data entry.
While small businesses in Australia account for the majority of Reckon customers, the software company has its sights firmly fixed on the United States which presents as a much larger addressable market. Seeking to grow their international footprint, the Company has increased its sales force capabilities in the US while also recently launching its first cloud-based practice management module for use in professional service and medical practices.
As a low-cost alternative specifically designed for small business owners, an Accounting & Payroll package is advertised for $28 per month where a similar offering from the larger providers is advertised from $52 per month.
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