Retailers hit the GST panic button

Retailers hit the GST panic button

Accounting solutions sales have hit the roof as businesses race headlong into GST compliance, with distributors hard-pressed to keep up with retail sales demand for software and hardware.

A last-minute rush on the market has seen software packages walk off the shelves as the June 30 deadline looms. Quicken and MYOB lead the way amidst a myriad of accounting software products aimed at the small-to-medium retail market.

"Our distributors are hard-pressed keeping up with demand; they cannot believe the volumes involved," said Greg Wilkinson, CEO of Quicken, which recently launched version 3 of its GST retailing software QuickPOS. "We have moved almost four times more software product in the last month than we have the whole year."Wilkinson likened the current rush towards GST compliance with Australia's move towards decimal currency in terms of the impact it would have on the retail industry. Quicken has also partnered with Telstra and Keycorp to launch its Shop-In-A-Box solution for retailers.

"The cash register market has been living off the service revenue from decimalisation in 1966 until now. We are saying to those traditional cash register dealers that you can do that all over again with GST software."Quicken is running a program whereby those vendors can become accredited to sell software and hardware solutions to their existing customer base.

"Retailers have traditionally never computerised - it is a cash business," Wilkinson said. "So the product must look and feel like a cash register. They want good security in their product and a short learning curve in how to use it."Wilkinson said Quicken's sales success was due more to its ease of use than extensive marketing.

"When a company spends a couple of hundred million dollars on software development, it is very difficult to say the product's success is just in the marketing," he said.

"In the business space, Quicken tends to win on ease of use. Where the marketing kicks in is where a company wins the game.

"At the bottom end, Quicken will be the winner, whereas for medium enterprise up, MYOB will probably take market share, because there is the perception, although it is incorrect, that MYOB products are for slightly bigger businesses."But, as businesses are dragged kicking and screaming into the world of the GST, there have been problems.

"Feedback from the industry varies at the moment. We have to build confidence in the market, because at this stage a retailer doesn't have time for the teething problems of a new system."Many retailers have found themselves in the position where they would rather sell their business than face GST implementation, he added.

"Traditionally people go to their accountants for advice but at the moment they are looking for the easy solution. That's where we benefit hugely over our competitors, because the software is as easy as it gets and our marketing is leveraging off that."Hardware sales have also soared as businesses are forced to upgrade to meet the system requirements of the software. We are selling heaps of products, thanks to the Government putting GST requirements on businesses," said Harvey Norman's national financial director, John Skippen. "Point-of-sale software and business systems are all going through the roof and hardware sales have also skyrocketed. Our sales figures are more than we anticipated - it is all flying out the door - because businesses have had no choice but to upgrade their systems.

"From our point of view it is fantastic, but it has been hard for small business to make sure the engine room is ready by July 1. Prices may reduce then, but they cannot afford to wait until then to upgrade their systems."Skippen said many distributors had been caught short by the demand, which is emulating Y2K compliance figures of last year.

"We have a good supply chain, and our franchisees all had their products in place many months ago in anticipation of the GST rush, but a lot of suppliers underestimated demand."The rise in sales figures looks set to continue for at least another 12 months, according to Genevieve Campbell, director of GMC Corporate Business Services, which provides services and support for Quicken software users.

"It is all going crazy. Businesses have hit the panic button because the GST has forced people who have never computerised before, and have dealt with all their business out of a shoebox, to get it together. Many still haven't realised how organised they need to be."She said many large retailers had begun enlisting the services of companies such as GMC to keep up with customer service demand.

"The GST has had a big impact on the retail industry. Large outlets have so many software sales coming through they need to service their clients, so they are contacting us."Skippen agreed that business would continue to boom in the foreseeable future.

"We anticipate the first wave of sales will run until September. Then, when the first GST statement returns are due in October, businesses that are not prepared will be forced to put in new systems so we are expecting sales to power on regardless. There shouldn't be any drop off in business at all."

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