With more people attending the Sydney 2016 Xero Roadshow than attended national Xerocon last year, there was a definite buzz in the audience when incoming MD Trent Innes recapped what Xero had delivered in 2015 and more importantly what it would deliver in 2016.
Whilst the 2015 deliverables had concentrated on completing missing functionality such as the long awaited Inventory module, enhanced business automation tools and cash collection for small business owners, 2016 is set to be the Year of the Partner. Slated for completion is Xero Tax to cover all tax lodgements including the BAS, and the roll out of Xero HQ, a redesign of the existing Practice Manager. For full details on these , check out the indepth review from Digital First.
Accountants reacted positively to both the announcements on Xero Tax and Xero HQ (especially since for the majority of partners they will be free); but this announcement was very significant for a number of reasons:
- Firstly it signalled a fresh, well rounded initiative to capturing the hearts of those accountants and bookkeepers not yet part of the 19,000 worldwide community of Xero partners with the provision of work flow tools with world class efficiency.
- The almost organic result of this is likely to be another nail in the coffin of desktop software as accountants look to reap the efficiencies of this compliance workflow by moving more of their client on to Xero.
- This could also be a catalyst for the demise of other cloud accounting software that does not link directly to the accountant’s tax and practice management software. Despite warning bells sounding over the reduction in compliance hours due to increased automation that is available with cloud accounting software, research has shown that more than 66% of practice income is still generated from compliance work. So efficiencies in compliance are significant.
From these announcements at the Roadshow, it seems as though this is a marriage made in heaven between Xero and its partners, a win-win solution for both and provision of a one-stop shop for compliance and business software. The horizons of the word ‘collaboration’ just got a whole lot broader .
So where does this leave the small business? How much will they be included in the win-win solution when their accountant suggests a migration to Xero?
Xero accounting software in 2016 is light years apart from the Xero we experienced just five years ago. It has morphed into having all the major functionality required of mainstream accounting software although there are still a few gaps that need fleshing out – just to mention a few:
- Purchase Order and Sales Quote status reports.
- Increased depth of functionality in purchase orders including partial deliveries, tracking of On Order quantities, supplier part codes etc.
- More powerful reporting engine with greater customisation flexibility.
The ever increasing size of the ecosystem – now more than 450 ecosystem partners worldwide – means that if Xero cannot meet a specific requirements there is an app that will. The most popular apps continue to meet additional requirements in the more specialist areas of:
- Advanced Inventory
- Data entry automation
so if a business has specific business requirements not met by Xero, there is sure to be an add-on that will.
Xero’s impressive innovation delivery record means that 2016 should continue to delight users witha focus in four main areas:
- Automation – eliminating repetitive data entry.
- Real time data analysis to empower decision making with revised Dashboard.
- On Demand functionality.
- Security – to date the take up of Two Factor authentication remains disappointing despite security scares last year.
Xero constantly monitors the takeup of new features to ensure they are of value to its customers. So for example, Invoice Reminders delivered last year has resulted in more than 1 million reminders having been sent thus validating the investment in this functionality. Xero is thus in a position to maintain continuous improvement in its software
Xero also monitors the pain point of small businesses and once identified provide tools to minimise or even take away that pain. Late payments (or non-payment) by customers continues to be a major cause of pain and this year Xero is linking with Veda an Australian credit reporting agency to provide new customer credit rating – hopefully to stave off some of the non-payment.
Xero is still the most expensive of all comparable products in the market place; the $60 a month premium plan is effectively the entry level for a business with even just one employee – making it three or four times more expensive than similar options from Sage and QuickBooks Online. However this has not acted as a deterrent to growth – Xero is still way ahead (almost to a factor of 10) of these two products in terms of subscribers.
Xero has been criticised and compared unfavourably with other products because it does not provide telephone support – all support is via email. However in practice this does seem a workable solution and users have access to virtually unparalleled online documentation both in the form a User Guides and Video tutorials.
In summary I consider that Xero will be delivering a win-win solution into 2016. Accountants and bookkeepers will enjoy the experience of Xero HQ and the completion of Xero Tax. This will enable them to provide a more proactive service to their clients who will benefit not only from this interaction but also from using world class cloud accounting software that is ultra user friendly, responsive to business needs and continually evolving to take advantage of new technologies. Roll on the 2017 Roadshow for even more!