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Australia, we’re listening

On Wednesday we announced new and refreshed subscription plans. We made these changes to align value globally for new features such as Payroll in the US, varying storage limits for our Files storage feature and in preparation for new services we have planned.

We don’t change pricing often, and around 90 per cent of our customers will have a price decrease or only a $1 or £1 increase. For some of our Australian customers there is a more substantial rise, where we’ve changed our approach of charging by number of payroll employees to be more granular. We’ve therefore raised prices where there are higher volumes of Payroll employees, inclusive of automated super payments, along with higher storage limits.

Where we can help, and are taking immediate action, is with a question that many Australian partners and customers have had about the incoming “Standard” plan only having 1 payroll employee. We know we’ve slipped up and I won’t bore you with the convoluted history of discussion that led to us putting that out there.

So we’re confirming that for the new Standard plan, we’ll make the number of payroll employees on that plan 5 not 1.

We are very grateful for the comments that have led us to reconsider this, and appreciate that for many small businesses with a very low number of employees that have been using Xero with Payroll in Australia it makes sense to keep the transition simple and provide this option.

Another concern that was raised was around how we’ve listed the new plans as having 1000 invoices and 1000 bank reconciliation lines. This was simply a rewording of what we currently have written as “hundreds” and remains a soft limit that we would only enforce if someone’s use was excessive and causing performance issues for others. However, some took it to mean it was now a hard limit so we’ve made that clearer on the pricing pages. We are always working to increase the limits and have a bunch of projects on to raise this in the future. But we believe we cover most small businesses now.

We’ve also heard loud and clear the concerns about the amount of advance notice we’ve given. Unfortunately with the work done and ongoing behind the scenes we are not in a position to change that at this point. Please be assured we do take everything we are hearing to heart.

We are grateful for the many comments in support of what we are trying to do and appreciate the community conversation between those with many points of view. It pains us when we hear suggestions of typical corporate behaviour and it lifts our hearts when we are reminded of how we aren’t like that. We’ll strive to keep Xero a unique software company striking its own path and look forward to rebuilding any love lost along the way for the tougher decisions we make.

At Xero our focus is not on price, it’s on the value we’re providing. We aim to be very competitive but we also really love to deliver great features that make small business more productive and accountants and bookkeepers work more fulfilling. Just a reminder of the path we’re on feature-wise and that you are on with us. Online accounting is a true revolution for small business and we’re just beginning.

If you have any questions about the plan changes in Australia join me on one of our final two webinars this week where I will take you through all the pricing announcements as well as the decision to lift Standard from 1 to 5 payroll employees in Australia.

 

 

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70 comments

Tim Callcott
18 November 2013 #

Well done team – to demonstrate that you are listening by taking action rather than telling everyone you heard them is the mark of a leading business.

I love the fact that Xero don’t just say ‘we’re listening’, you are actually actively listening. I love the fact that @Rod Drury, @Chris Ridd and other @Xero team members actively responded to the discussion on the last blog post about this issue.

Further to the online discussions I received direct emails from @Xero team members, following up the specific questions I asked on ‘that’ blog post discussion.

I’m happy you’ve made a change. I love the fact that you are actively listening.

John Rattray
18 November 2013 #

Thank you team, gosh if only we could get whole of government listening like you guys do! My small business had made the decision to move to Xero upon the arrival of the Purchases Module. When that arrived processes were instantly put in place to transition as from the 1st January – then came the announcement of new plans which for us with 3 employees would have meant an extra $10 per month – considering we pay now $58 a month the cost impost was not much but we felt the plans lacked value as outlined. Now we are fully committed to January, and really looking forward to the benefits we will receive! Even our account has said this decision is one of the best we’ve made in 23 years of being in business.

Sara Rumble
18 November 2013 #

Excellent and thanks for listening to our concerns..This is the Xero we have all come to know and love!

Julie Aquilina
18 November 2013 #

Fully agree Heather. Thrilled to be partnering with a company who really does listen and take action on feedback received!! Well done Xero team – really appreciate, as will a lot of my clients!

Cassandra Scott
18 November 2013 #

Huge kudos to the team at Xero for listening to the people that are at the coalface of using the product. Making the decision to change the standard plan to 5 employees is brilliant – it makes sense, and will continue to allow us all to Do Beautiful Business

Kim Wykes
18 November 2013 #

Great work as always Xero – one of the many things I love about you guys is that you do actually listen, and this is a perfect example.

Julian Crawford
18 November 2013 #

For a large listed company to respond so quickly, directly and actively to feedback from the user base is unusual and impressive. “Do beautiful business with Xero” sets a high standard for all us. Well done to the Xero team for their responsiveness.

Mary-Clare Switz
18 November 2013 #

Woo-Hoo! Thank you Team Xero for listening and responding. Being able to engage with Xero directly and know that concerns are listened to and considered makes Xero a cut above the rest.

Cameron Jubb
18 November 2013 #

I am so happy and confident that you listen to our concerns. What a fantastic company and product. Great job @Rod Drury, @ Chris Ridd.

Dianne Jewell
18 November 2013 #

Thanks guys @xero! Brilliant rework! Shows you are not too proud to admit there’s a glitch and fix it. Where else have I seen this sort of partnership-with-user thinking umm nowhere!

Julie Low
18 November 2013 #

Very, very pleased to hear that! I was concerned about informing my small clients that fit this new change (with employees up to five). Much better – thank you for listening and taking appropriate action. This is why I love Xero!! :) :)

Alexander Kohl
18 November 2013 #

You are really an inspiration in how you walk your talk. It is a pleasure to be working with you.

Jeff Charge
18 November 2013 #

Like all other comments on here, well done Xero for listening to the complaints & making the change to 5 employees. Next time you try a stunt like that, keep it to Aprils fools day. Back to now promoting Xero for small end of town

James
18 November 2013 #

I said it last blog, and I’ll say it again, I’m sorry for the terrible things i said, I <3 you guys – faith in you and goodwill restored.

Christopher Grindal
18 November 2013 #

It is always good to see the organisation responding to constructive comments. Even though the change in employees for the standard plan is welcome, it may distract the need for those employing people to use the premium version, due solely to the automatic superannuation function. Could we have some more information on this, as it may mean an implementation towards this plan is preferable, given the cost of less than $10 per month (after GST is taken into account) for those businesses to handle this function. We have been considering moving clients from the old “medium” to “large” plans purely for this function, in anticipation of the new changes to superannuation reporting from July 2014 and July 2015.

Alan
18 November 2013 #

Great news – Making this change shows a quality of leadership and character that fits much better with the Xero brand. Well done & thanks.

Elizabeth Salter
18 November 2013 #

Adding my thanks to you guys for not just listening, but taking concerns on board & acting on them. I think changing the Standard plan to 5 employees will have a big positive impact.
Also, thanks to @Rod Drury & @Chris Ridd in responding so actively. I’d be hard pressed to think of another company where the whole team from top to bottom is involved in that level of communication with their customers. :)

Wayne Schmidt
18 November 2013 #

You guys rock. After a week of running clients events for accounting firms and dodging the pricing questions. This is a great outcome, winners all round.

David Dean
18 November 2013 #

I am dismayed that you are unilaterally raising prices by 40% with less than a month’s notice.

I currently have two companies using your system, and think it works reasonably well. The key factor in selecting Xero was your pricing. Now I see that you are going to pursue a “bait and switch” process, and am very dismayed by your tactics.

You still are advertising your current pricing for new customers at $49/month in mid-november, when you are going to switch them to $70/month in two weeks.

It would be much smarter for you to “grandfather” your existing, loyal customer base with the current pricing, and announce the higher prices for new customers.

I will now have to find a lower-cost alternative to your system, since there is nothing to prevent you from raising the prices again to $100 or $200 / month at your whim…

Please reconsider the need to slug your “early adopter” customers with this massive increase!

I have 13 employees and do not need your multi-currency or superannuation service. You are charging more for services that I don’t need or want…

Anton Gerner
18 November 2013 #

Well done Xero!
Thanks for listening!

James
18 November 2013 #

Wow. Feels really good to have a supplier that listens and responds so quickly. I’m starting to understand social media and the benefit it can have for an organisation that uses it well. You are slaves to our emotional demands. muahahaha.

Tony Chadwick
18 November 2013 #

Congratulations Xero – great move and I totally agree with @elizabeth slater – you just don’t see CEO’s (well done Chris & Rod) responding to feedback personally – moreover it magnificently demonstrates the real values and corporate culture this disruptive global leader stands for!

Graham Dawson
18 November 2013 #

Listening is great and I hate to put a fly in the ointment with so many enthusiastic comments here, but it seems to me that they are all coming from businesses with multiple employees who will benefit from the change you propose. Great. But what about small business with one employee – there must be a lot of us. What are you doing for us? I use very little of the capacity you provide on the standard plan. The only reason I am on it is because of the ridiculously low limit on reconciliations on the “Starter” level. The only reason I don’t qualify for that is because my credit card provider creates two entries for mosts transactions. So although I typically have fewer than 20 transactions, there are 30+ reconciliations to make. So I am forced onto the next level at twice the cost. And so the recent price rise is insult on top of injury. Please don’t tell me I’m alone in this situation! There must be many others who’s equally simple needs are not fairly catered to with this range of plans.

Tasso Keves
18 November 2013 #

Great news guys…..Well done!
Very fast and prompt pro-active action taken, of which must be congratulated and one of the key reasons why we’ve loved being part of this journey!!!

Very Happy partner……….Thanks

Carl
18 November 2013 #

To Chris Ridd and Rod Drury, you guys are champions. I really don’t know too many billion dollar company executives who jump on their own company blogs to not just defend their product but more importantly listen to their clients. At the initial announcement I thought 5 employees limit for the standard plan was something I thought was reasonable, and I rocked up this morning to find out that you not only listened but you took action, bravo Chris and Rod for listening. This isn’t the first time either because you guys are always open for suggestions (e.g. payroll, files, purchases, etc.) this is why Xero is the best online accounting solution.

Jeffrey Budd
18 November 2013 #

@Chris, thank you for your quick attention to my problems noted in my comments posted last week, appreciate the effort. I do however, think it’s unfortunate that Xero decided to offer a lock in period for silver and gold under the guise of a partner loyalty program and exclude Bronze.

I fully understand the program and don’t have a problem with silver and gold getting benefits, such as free software. The rub comes when Xero (obviously) changes policy on the run (due to unexpected feedback) and then introduces a lock in period to appease silver and gold and then links it to its loyalty program to give the impression it was all part of the master plan.

If you look at my original comments, I didn’t have a problem with Xero wanting to increase its prices in general and I am extremely confident that my clients will be completely fine with it and am not concerned in the slightest about receiving negative feedback.

My issue isn’t the cost and the lock in period, while a small benefit to clients, brings no major benefit to my practice. The real point is that Xero has sent a message that bronze partners are not valued and with this decision respected.

Graham Hyman
18 November 2013 #

I am a very small end of town customer (2 partners, no employees) who will be leaving Xero because of this decision. I am facing a 28% increased price and receiving no benefit at all. Not only that, the key issues I need addressed are common to man Xero customers and despite many requests have seen no action. They are:
1. There is no auto-sum when adding details while creating a transaction on the reconciliation screen. All we need is a little subtotal that says how much remains to be allocated. Even the cheapest of accounting packages manages this but in spite of numerous requests Xero can’t/won’t do it.
2. Placement of the reference field: There is no place (while there is space) for the reference field in the quick entry on the Reconcile screen, the only way to enter a reference is to open Add Detail. On some screens (notably Transactions) Description does not show at all, the reference field is critical in identifying the purpose of a transaction. I have asked about this on numerous occasions only to be totally ignored.
3. No way to globally search through transactions. If you have multiple bank accounts the only way to find a transaction s by searching in each account. This is time consuming, dumb and inefficient. Again, almost all cloud packages offer this but Xero can’t/won’t. This is another issue that has been raised many times and continue to frustrate many users.

Perhaps if those issues were addressed the story would be different, maybe we can have a response as fast as that with number of people on the payroll.

Jan Clogg
18 November 2013 #

I applaud your quick response and for really listening to everyone who contributed to this feedback. I was a little surprised with the response, as Xero always has and, I expect, always will provide value. Anyone who has paid outrageous prices for payroll packages in the past will know what I mean. My only complaint is that the starter pack is still hard to sell to the micro businesses. Who has 20 bank transactions a month? I am yet to find a business who does…..please Xero put this on the radar to review, there is a big chunk of the market we are all missing out on.

Chris Ridd
18 November 2013 #

@ Christopher, Good point.

The new Standard plan to 5 paid employees does not include Auto Super. That is a feature that will continue to kick in at Premium 10 and above based on the higher volumes of employees paid and to provide much needed efficiency gains in streamlining super payments. As you rightly point out, there are new reforms from ATO known as SuperStream and they start coming into effect from June 2014. In the words of the ATO, these reforms are aimed at driving “the adoption of data standards (and) will result in more automated and timely processing of transactions, improved efficiency, an easier system for employers to use, fewer lost accounts and more timely flow of money to members’ accounts.”

Other small business accounting software providers price auto-super as a separate offering starting at $1 per employee per month, so on that basis alone, we believe our new Premium plans are very competitive. Xero has decided to get ahead of the curve and make auto-super a standard part of the Premium offering. Feedback from partners that have been using this feature in the Large subscription has been enormously positive and it is our belief that the auto-super feature will become a mandatory component of accounting software for SMEs over the next 12 months in order for business owners to be compliant with these new SuperStream reforms.

Join the webinar at 12.30pm to find out more http://events.xero.com/au/events/694-new-pricing-plans.

Jo Williamson
18 November 2013 #

Love that you listened and changed this so quickly !

pp
18 November 2013 #

Not happy with price changes :(

Kaylee
18 November 2013 #

I’m not happy with the pricing change either. Just recently convinced a couple of my clients to change to you guys and now I have to resell. This may not work now because your price was one of the big selling points! SME’s are very much in trouble.

Also just clicked at the top of this page at the “Pricing”. It still has the old prices. I don’t think that’s a good idea for any potential clients. Do you?

Steve
18 November 2013 #

I like others above am not at all happy with the price changes. Incremental change is fair; but fast rapid change, in our case a 40% increase is opportunistic and not in any way customer service based. I like Kaylee and others in this forum was sold on the idea of price – I can live with small incremental adjustments but no matter the nepotistic sounding comments in this forum – when you slap a 40% increase on anything overnight it smacks of pure unadulterated greed.

Dan Rossides
18 November 2013 #

Yep, you guys rock. Your customer service is outstanding. The fact that you listen and make adjustments to suit is why I think Xero is one of the best online companies out there. Keep up the good work.

Emmet
18 November 2013 #

I just signed up and spent a couple of weeks coming across and now my plan goes from $49 to $60 a month. Didn’t even cross my mind that there would be a price increase in such a small space of time. I only have one employee so the $49 cost was pushing it regarding value. I agree that this looks very much like a “bait and switch” tactic. Very annoying really.

Ed Henry
18 November 2013 #

Thanks @xero @Rod Drury, @Chris Ridd and the rest of the team. Listening to feedback and being responsive is a great feature with our software and our future together. Gives a whole new meaning to being a team member.

Jessica
18 November 2013 #

Really not happy with the fee increase. We a small business where all but 2 of our staff are casual. We are now having to change to pay $90 per month just because we hire so many staff. This is really tough on a new small business. Not happy at all!

Emma
18 November 2013 #

Thank you for being so proactive and listening to your customers. I am very excited about getting to access the automated payroll for just $1 more than what I am currently paying. Top work Xero.

Adele Wardley
18 November 2013 #

Thanks for listening and responding Xero team. This will help a lot.

Margaret Bishop
18 November 2013 #

Great work Xero, you listened and took action in a very short space of time. Well done.

Tim Ellert
18 November 2013 #

@Rod, @Chris. (This is a repost from the older / initial thread)

Well done for listening to feedback and fixing the package you offer in Australia..

Now please can you do the same for the UK and comment on the following points:

1) Why charge the small business extra to pay for the big business / partners new features, while they get a price freeze and pay the same as previously?

2) Why not make files a bolt on for only those that want it (as it just not that important to most people)

3) Why not offer a true small business plan which supports 15 invoices and 15 purchases per month? Starter is pointless and Standard is overkill

4) Why not fix the existing big / value features in the UK like bank feeds which are notoriously unreliable and seem to break virtually every month

5) Why not include direct RTI submission to HMRC in payroll so we dont need to use / pay for a third party add on.

6) Why not support your loyal customers of 4 years+ by freezing thier prices too (not just partners) and only applying the new prices to new sign ups (like other cloud companies do)

I have to say when i read the blog comment above about “what this space, we will sort it next week”, i thought great, Xero get it! Sadly by only addressing your home market (Aus), i guess you dont get it. Still feeling very let down and disappointed with Xero in the UK as its NOT great value for money over here.

Look forward to your comments Chris and would love to to get Rod’s comment as well to this post (he seems to have gone awefully quiet since the bad press started)

Come on guys turn this into a positive and move forwards…

Gary Turner
18 November 2013 #

@Tim – since UK is my responsibility it’s probably more appropriate for me to chime in.

We’ve always favoured having a small number of price points over flexible granular pricing because it’s just much easier for people to work out what they’re getting (or not getting). Bolt-on pricing is a slippery slope to the kind of old world of software price complexity we’ll always seek to avoid, and this is also the first time we’ve ever put prices up in the UK and it is only by £1 per month.

We choose what goes into the product on the basis of what moves the game on for our customers. We think Files is a game changer – if you haven’t tried it, please do.

One way to look at the Small plan would be is it a case of glass half empty or half full?

Before we introduced the Small plan the only option micro businesses had was the original single £19 per month UK price plan (currently Medium). Contractors and self employed users asked us if we could build an ultra low volume price plan for them because they loved Xero but £19 was too much to pay for such low transaction volumes, so that’s what we did. Small (soon to be Starter) is a lower cost alternative to Medium for specifically that audience, but by far most people go for Medium because it represents the best value and is really the core Xero product experience for the majority of the businesses that run Xero.

We realise that there will always be a small constituency of users who sit just above the low transaction thresholds we set for Small (Starter), but those are the precise breaks we deliberately defined for the core audience Small is aimed at – so if you need more than the limits in Small (Starter), then Medium (Standard) is your product.

We’re working hard to push UK banks to improve their bank feed data services – unfortunately this is not in our gift to fix but we’re happy to keep pushing the banks for more reliable alternatives. If you’re really unhappy with your UK bank feed, you should consider switching to HSBC as they are still the only bank in the UK with a reliable direct feed service. Xero customers in the UK who bank with HSBC have no reliability issues, that said HSBC charge £3 per month per account.

UK Payroll – good news – we’re starting work on localising Payroll for the UK.

PS. Xero’s original home market was New Zealand. :)

Tim Ellert
19 November 2013 #

Gary – Many thanks for the response..

So if i understand correctly, basically banking feeds are broken in the UK unless we move to HSBC and pay for them, and work has only just begun on RTI submissions.

The standard plan is increasing to pay for the expanded “Files” support – not something we use as Dropbox is free for 5GB! However no increase for partners..

And you avoided answering the following:

1) Why charge the small business extra to pay for the big business / partners new features, while they get a price freeze and pay the same as previously?

6) Why not support your loyal customers of 4 years+ by freezing thier prices too (not just partners) and only applying the new prices to new sign ups (like other cloud companies do)

Your competitors (which i wont name) are now much cheaper and offer the same solution (without files) and i struggle to see the value / justification for the price rise in the UK market when feeds don’t work and payroll is in its infancy?

Bearing this in mind, please can you answer my remaining two questions above…

Gary Turner
19 November 2013 #

@Tim – I think what I mean banking is broken in the UK when it comes to reliable data services. Xero was the first accounting software package in the UK to introduce a direct bank feed in 2009 (HSBC) and then the first again to roll out Yodlee feeds in 2010. The deficiencies lie with the banking community, not with Xero.

The current Payrun feature in Xero isn’t a full payroll – so we’re working to localise our core Payroll features for the UK which will include RTI – but RTI is actually the least of the work required to be done.

I didn’t understand your point 1). We’re reducing the price of Small in the UK by 25% and increasing Medium & Large by £1.

We track our competitors very closely and we’re comfortable with how we compare.

Tim, with respect we’re putting up the price of Medium and Large in the UK by £1 a month – while it’s obviously upset you and I’m sorry about that, I’m not sure what relief I can bring you by means of further explanation.

Joseph Heenan
19 November 2013 #

@Gary

Very interesting to read your comments about UK bank feeds.

I think you should really consider revising http://www.xero.com/uk/updated-pricing/ in light of your comments – it strongly suggests that UK bank feeds are there, working and included in that prices. It’s very misleading to then discover that the only one that works reliably (HSBC) actually isn’t included (ie. costs extra).

I’ve currently got a number of different businesses with accounts at HSBC, but we don’t use the feeds (it’s cheaper for the accountant to just download the data each month when they login to sort out payroll etc) – HSBC have already started charging us £5.50/month just for the business bank account, to then charge £3 extra again for the feeds seems ridiculous. They also start recently charging for foreign transactions facilities which had previously been free – they just seem to be piling more and more charges onto what was essentially a ‘free for life’ bank account when we joined.

If you (Xero UK) came forward with another bank partner that had reliable feeds, I think that would be the final trigger for us to move bank. I’d be fairly certain I’m not the only person who feels like that (I wonder if a survey of your UK user base as to how many are in this kind of situation would give you sufficient data/clout to persuade whichever bank is most desperate for customers to implement feeds?).

Gary Turner
19 November 2013 #

@Jospeh – I’m not saying the only one that works is HSBC, it’s the most reliable because it’s a dedicated data service, and relatively speaking most Yodlee feeds for other banks (which are all free of charge) are also reliable but just not as reliable as HSBC’s and it’s HSBC’s prerogative to insist on charging for its service.

I certainly expect that we’ll see more UK banks launching their own direct feeds next year, but sadly I also expect they too will levy charges. Only when all UK banks have direct feeds and banks perceive competitive pressures will it be likely that prices for direct feeds in the UK will dwindle or disappear.

Sorry it’s not better news, but it’s a symptom of the state of UK banking and the lack of innovation around data services. It’s changing, but slowly.

Good point about adding a footnote about HSBC charges.

Jon
19 November 2013 #

@gary – got to agree with that.

In terms of bank feeds we have had very little trouble with RBS/NatWest feeds through Yodlee and, as they’re free think that this is an excellent service. Very occasionally we have had to refresh the feed details to give the service a “kick”.

The fact that HSBC see £3 pm per account is a reasonable charge is beyond me really.

Lloyds requires a PIN each time it’s refreshed. That’s a pain in comparison…

Tim Ellert
19 November 2013 #

@Gary

What annoys me most are the following three things:

1) Xero are increasing pricing for some (the small business / standard users), but not for others (Silver & Gold Xero Partners have been told that they will not have their pricing increased)

2) While it may only be £12 a year increase, this makes it the most expensive cloud accounting system out there (£240 pa) for the sake a single new feature (Files) which is better served via other platforms such as Dropbox anyway.

3) There has been very little value added to the UK version (other than files!!) and still many open issues – thus a price increase is unwarranted and very short notice.

At the end of the day, I and others here voice our opinions to help you guys to be the best product / service possible.

Its over to your guys now to restore the faith – I feel my opinion has been clearly put forwards.

Sandra Hunter
19 November 2013 #

I think it is a good idea to look at the big picture. Every successful business needs up to the minute financial information to enable it to make good decisions. The accounting system should be the very heart beat of a successful business. Too many small businesses resent paying anything for their accounting system (and their accountant) because they fail to see how vital that information is. When you compare what you pay for Xero each year to your total business turnover you should be able to see that the benefits vastly outweigh the cost. Many businesses spend more on coffee than Xero!

Gary Turner
19 November 2013 #

@Tim – it’s great that we’ve been able to have this exchange. Being open and debating some of the tougher decisions we make in public is so important, even if outcomes don’t satisfy everyone.

We’ll stick to our guns when we think it’s the right thing to do (for example we think Dropbox is simply one of the worst places for accounting records and documents to be stored from a practical perspective) and at the same time we’ll absolutely respond to feedback when the force of customer argument tells us we missed the mark.

Happy to work to restore your faith. Thanks for giving us the chance.

Mike Block CPA
19 November 2013 #

@ Tim
Where did you hear, “Silver & Gold Xero Partners have been told that they will not have their pricing increased”? That is news to me.

Mike Block CPA
19 November 2013 #

@ Tim
If you are right about Silver & Gold Xero Partners have been told that they will not have their pricing increased, then this will be of big interest to anyone not getting Xero at 25% off. I give a 25% discount to anyone who bills Xero through me, even if I do not do your accounting. If I also can get you the old Xero prices, so much the better.

For clients, Xero costs too little to bill it separately.

Chris Ridd
19 November 2013 #

@ Tim, @ Mike
Not quite correct guys. Silver and Gold partners in Australia will have a period of price protection for any existing Xero customers (as at midnight on 5th December) through to 1st July 2014. This is in recognition of the many who have been on the journey with Xero early and have moved to fixed fee arrangements with their clients. They also have the most amount of exposure due to higher volumes of Xero clients. We felt this was the right thing to do to allow them time to make any appropriate service fee adjustments that they see as appropriate for their customers. So from 1st July 2014 there will be one price plan for all partners. Hope that helps clarify the situation.

Mike Block CPA
19 November 2013 #

@ Chris Ridd:
Thanks for the clarification. I appreciate why Xero feels this is fair, so I do not mind different U.S. treatment.

The recent Xero Roadshows showed us a far better next generation payroll than any I ever saw, but my BIG major Xero price problem relates to not billing payroll separately, when competitors do so. Many clients (and the new users Xero wants) have no payroll, but now pay as if they did.

Standard 1 – 5 employee plans also omit direct deposit and e-file pay. This will mean many clients have endless time wasting Internal Revenue, state and city notices, plus expensive tax penalties and interest. This often cost me $1,000 per client per year, until I made clients e-file and pay, so Xero should not consider a plan without letting us add this. My many one employee companies can now have e-service for $39 a month (Premium 10), but this will be an UNACCEPTABLE $70 a month in a year. That will mean no Xero at all for many of my new clients.

Bundled payroll also means an UNACCEPTABLE $51 more for the 11th employee and $90 more for the 21st employee. Xero is now cheaper than QuickBooks Online and QuickBooks Payroll for 10, 20 and 100 employee, especially with my 25% Xero discount. However, unless Xero charges separately for payroll, it will be far more expensive for many employee – user combinations.

Mike Block CPA
19 November 2013 #

By the way, it would be especially ridiculous if I had to pay for a Xero 1 – 5 employee plan, but also had to use a separate payroll service. I will have to do this if Xero’s affordable one-employee plan does not include direct deposit, e-file and e-pay. No one with my experience would ever consider not having these. I also cannot use Xero payroll, or Xero at all, if I know that in a year a one employee company will be $70 a month.

darren hawkins
19 November 2013 #

How is doubling the price of the software for say 11 employees listening or helping…
This appears to have nothing to do with use of technology. How can 5 or 10 payroll employees be such a burden. Whilst XERO has good features, my price is likely to double, but not my features… Not happy at all with this. Time to re-evaluate the software market. XERO has just lost credibility in my world.

Joel Montgomery
19 November 2013 #

I have 7 employees so it seems my prices have now increased by $11 / month with no notice. Looks like I am one of the unlucky ones. Xero think it’s OK to jack up prices with no forewarning – not happy.

Gwen Gouveia
19 November 2013 #

We have a practice in a remote area with remote clients, where staff are mostly casual and some working as little as 5 or six hours in a week and constantly changing and rotating. In our experience we would hardly ever pay more than the 20 for some or 10 employees in a single pay (smaller clients 5), but in a month it would be more than these limits yet total payroll cost remains unchanged.

It is not only an unattractive selling point, but impractical to attempt discussing reasoning for pricing increase in this instance to our remote business clients reulting only from a payroll perspective having just convinced them to migrate from MYOB (that was not costing them anything due to them not having a local product but using our corporate MYOB solution). Don’t get me wrong, we LOVE xero and the functionality, but for an up to 40% Pricing increase, how do I present this to my clients whom have the same level of “Payroll Expense” as another organisation that can remain on a low cost plan.

Notice period of increases would have been helpful and If Xero payroll is an attractive and identified valued option, can pricing be considered in relation to our example above or perhaps based on ” Total Payroll” expense that is an indication of true organisation size and “Average Full time employees” per month rather than direct “Number of employees paid per month.

carmen portelli
19 November 2013 #

Our fees have gone up with xero by 43%!!! We are a small business with 12 casual staff some who work only a couple of hours per fortnight. What is XERO doing about small business like ours with your fees jumping from $49 to $70 with no warning? I expected that fees would stay at that rate for at least a year. I have only been with XERO for 3 months and now I feel trapped after spending many hours setting everything up. I doubt whether they are listening to our concerns. XERO needs to be aware that they are hurting the small operator with lots of casual or part time staff.

DannyM
20 November 2013 #

In a Australia, for Tax records, supporting documentation needs to be kept for 7 years. I suspect many business keep them longer (especially electronic versions).
If dropbox is “one of the worst” places to store financial documents, then a SaaS repository is not much better! I don’t know if I will be using Xero in 7 months time let alone 7 years…

I don’t think Xero “Files” is a “game changer” but only time will tell…

StaceyS
20 November 2013 #

Rather UnImpressed! going form $29 per Month to $50!! & the starter plan is a Joke at only 5 invoices & 5 Bills a month. We will definately be software shopping before december.

Brian Duckworth
21 November 2013 #

Is it my imagination or have the negative comments been deleted?

Gary Turner
22 November 2013 #

Brian – it’s your imagination. Deleting comments just because they’re negative is not our thing. You’re probably thinking back to different comments on the original pricing post last week?

carolyn
22 November 2013 #

Our price has jumped from $49 to $70 with no warning – we only signed up last month!!!!!.
The only difference will be auto super which I did not sign up for or need and deliberately chose to go without to keep cost down. now i have to have it anyway.

It still does not handle WET TAX – surely it can’t be that hard to allow me to add an extra tax like i was able to in QB and have it added to the BAS activity statement in the right places.

We bought an add on to handle stock – which QB would handle – we are only small fry so far – So now to go into the “cloud” it is costing $2000 a year.

If it had small stock control and WET TAX I wouldn’t mind but just to pay your employees – that stinks. And from I see its hard to use payroll anyway.

ALSO if you sign up for XERO now – guess what, they are still advertising the $49 medium 20 employees deal. That can’t be legal. The new prices come into effect in 2 weeks.

Don’t get me wrong I love the way XERO works but really for the money I could save QB is still looking alright especially QB online

Tom
27 November 2013 #

I understand the need for pricing to be reviewed periodically, however I’m concerned that there is now an absolute limit even on the most expensive plan. What happens when you breach the 1,000 limit on transactions, and when you have more than 100 employees? We’re in neither category yet but it won’t be too long. Xero has a focus on small business and owner/operator businesses, but please don’t forget your medium sized customers!

Brian Duckworth
4 December 2013 #

Hi There Xero Team,

Yes I agree you are all listening…for my money Xero is the better of the cloud based systems; even though some aspects are a bit agricultural and clunky, IMHO customer service seems to me with the interactions I have had to be amongst the ‘best in show’ well done!

However (yes Chris you knew there had to be a but!) I have just had a look at the ‘new’ packages on the website for Australia. I would suggest that Standard be replaced by the premium 10 and 10 by Premium 20 but keeping the prices at $50 & $60; whilst there is still a price increase it is slight;y more palatable, price would thern jump to the Premium 50 at $80 with up to 50 employees, SME’s at that level would be more accepting at that price range. I would put the starter package with up to 5 employees.

Don’t know whether this make sense – but it does eliminate 1 pricing tier. As many have said selling big percentage price increases to any small business is damn hard.

I would have to express my discontent with the ‘prefered holding of prices for the big end of town – yes they may have more volume but us little guys are perhaps more important as we are closer to the coal face than they are.

Very hard to sell the package and then a month later tell the client – price up by 42% – as someone said above bait & switch leaves a nasty taste in mouth

Cheers All

Brian

Alexia Taylor
17 January 2014 #

Well said, Chris Ridd. It was a really good to know that you listening to us and apply on them. That’s was great effort by you. Excellent and keep going ahead like this.

Andrew
28 January 2014 #

MYOB Live Accounts is only $29/m how can you justify limiting the Xero $25/m to so few transactions and charging $50/m (and higher) for what MYOB Live Accounts gives you for only $29/m.

The pricing seems crazy.

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