Speaking to Accountants Daily, Value Adders founder Matt Paff said he has seen a convergence of accounting and HR tech across the globe, with Australian accounting software players ready to pounce.
“There is a company across the Scandinavian region called Visma, and they are the leading accounting technology provider in that region. Over the last three years, they have acquired a large number of HR and payroll tech companies,” Mr Paff said.
“If you look at the HR tech industry in Australia, there is a lot of money coming into it at the moment and a lot of acquisitions and mergers happening.”
Just last week, Employment Hero raised $22 million, with the start-up valued at more than $100 million.
Mr Paff also highlighted the $22 million raised by workforce management company Humanforce earlier this year, as well as the $111 million secured by workforce management company Deputy.
“There’s a lot happening in that space and I can’t help but think that the likes of MYOB, Xero, Intuit aren’t looking at that and going, ‘maybe there’s something there for us’,” Mr Paff said.
“We’ve seen Single Touch Payroll be credited as a major driver of new businesses by accounting software companies in Australia, including Intuit QuickBooks, MYOB and Xero who have talked about the spike that STP has had.
“What that does flag is that payroll and HR becomes an important component for accounting technology.”
‘Hop, skip and jump’
“There’s always been a tight knitting of accounting software and payroll software and that’s going to extend into HR software,” Mr Paff said.
“People are going to expect things like onboarding, and the moment you get into onboarding, you get into these things like contracts and work rights validation.”
Mr Paff said a move towards HR tech is already evident from some of the key players in the Australian landscape, including Intuit’s $340 million acquisition of TSheets in 2017.
“That is really stepping beyond payroll and it’s a hop, skip and a jump into other areas of HR tech,” he said.
“It also fits in particularly with Xero’s stated aim of having touchpoints with all the staff of the business, not just the accounting team, and they are doing that with their expense capture, they are doing that with their job management, and the logical extension is payslips and leave applications and these sort of things that they are already doing but also into HR components.
“I do see this as an area that the key players in accounting tech and payroll tech will start to expand into further HR technologies in the coming years.”
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Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.