Dynamic and visionary were the two adjectives that were constantly at the front of my mind as Xerocon –the annual Xero conference – unfolded last week. It wasn’t a ra-ra affair, just down-to-earth presentations on what the company – staff and product – has delivered over the past year and where it is heading.
Some of the numbers were pretty spectacular: a world-wide doubling in the number of customers since March this year from 100,000 to 200,000, a doubling of annualised revenue since last year to NZD $64m and, because focus is on investment for revenue growth – a doubling of losses per year to NZD$15 million for this year. Budgeting for a huge loss year on year is certainly not the traditional formula recommended by accountants but Xero is a company with vision, focus and strategy as was revealed at Xerocon (which had also doubled its number of attendees from last year.)
An jam-packed product information session unveiled what we can expect to see in the coming twelve months. (See the complete and comprehensive review from Boxfreeit ) Long awaited and eagerly anticipated; Purchase Orders, Sales Quotes and Inventory are finally slated for delivery – the exact date is still unknown but the screen shots and discussions on inventory costing methodology indicated that the functionality had reached the design stage at least. Jobs are also on the horizon but probably a bit further off.
In addition to these we can expect a more comprehensive reporting engine as user definable parameters and variables will be available, resulting in the ability to tailor standard reports to suit individual requirements and putting reporting more on a par with QuickBooks which currently has the most comprehensive and flexible reporting engine of small business accounting software.
The handy feature of being able to attach documents to transactions is being greatly expanded so not only will you be able to link documents in more places but they will be stored in navigable folders and basic image editing tools such as zoom, resize and rotate will be available. This feature grabbed my attention because as well as being pretty neat it also shows how Xero is exceeding its motto of being ‘beautiful accounting software’ to including practical tools for businesses.
However the feature that really excited me was the unveiling of Banking 2.0, as this really proves how Xero is thinking outside the square. Xero blitzed its rivals with its bank feeds and complementary bank rules making this industry standard and forcing other software vendors to scramble to emulate. Banking 2.0 will further revolutionise this key area and certainly give Xero a competitive and strategic advantage. Banking 2.0 will enable the business owner to liaise directly with the bank – no more uploading of ABA files and will streamline payment management. Anything that can streamline the banking process – both ins and outs has to be a winner for small businesses as this is where so much non-value add time is spent and where so many errors are made. Xero backed this claim up with some substantial numbers – 6.2million invoices totalling $12 billion have been received and 6.4 million totalling $14 billion sent so there is scope for process improvement. So far only a couple of banks are on board with this revolutionary process – but the message from Xero is loud and clear – if your bank isn’t one of these – talk to them and get them to change, otherwise change your bank to take advantage of those that are dancing with Xero.
Again reducing small business admin, Xero is looking to public/private partnerships with government whereby it pushes directly not via government websites. The first example of this – the lodging of Tax File Number declarations has seen an astonishing 8640 lodged in the first months of the rollout.
There were more exciting announcements: Xero is continuing to roll out functions on the mobile app. We were promised that soon we will be able to stand in the bus queue on the way to work and complete bank reconciliations! The Leave module is also due for an overhaul – a bar calendar will provide an easy visual of who will be on leave amongst other features.
Once these key elements are delivered, Xero considers it will have completed the accounting engine of the software and then the sky’s the limit. Or in Rod Drury’s words, this will be ‘the end of the beginning’. This is where and when the excitement will begin because Xero has the vision to take its customers beyond expectations and blur the boundaries of what constitutes accounting software.
I have been invited to attend the Intuit VIP Accounting Professionals Summit in Mountain View, California this week where I am hoping to understand more about the vision for QuickBooks Online and its positioning in Australia, and then 20th & 21st September it is the annual Reckon Conference (short straw here as it is in Melbourne) where the long awaited Reckon One cloud accounting software potentially may be a little more live. But I am really left wondering how these vendors can possibly even catch up with Xero let alone leap frog ahead. Right now it appears that Xero has an incredible competitive advantage – it is an incumbent player with a sizeable market share, it has solid credentials behind it and it has the vision to boldly go where no accounting software has gone before.