We had a nice email in from one of our new schools on Xero.
“Xero has totally ‘revitalised’ our school accounting and financial practices! We can now make better decisions based-on accurate, up-to-date information. The biggest surprise is how easily staff have made the transition – they have found it straightforward and intuitive! Now we are spending less time but getting better outcomes. Changing to Xero is one of the best decision we have made.”
Roy Sye Principal – Tamatea Intermediate School, Napier
Our team was just stoked to get that message. Thank you Roy. One of the verticals we plan to target next year is the school market. We’ve been working with our accounting partners to understand specific school requirements. (You can join the conversation at on Linked In: Accounting for Schools)
Update August 16: Here’s another note just in …
“Xero has made a significant difference to our school in a very short time. With the introduction of Xero have reviewed our internal financial systems and we now have efficient and highly effective systems in place. Staff have found it very very easy to use and understand, very easy to navigate around and have said it requires less work on their part while giving us very up to date financial information. In a word we believe it is brilliant!”
Rohan Pearse – Mayfair school
The reason we’re so interested in schools include.
- Our accounting partners have asked us to. If you’re an accountant with school age kids and the board of trustee’s ask you what you do – the standard answer is “fireman!”. Accountants do not want to get dragged into the pain that has been school accounts.
- Cloud based accounting can save tens of millions in Education spend. No servers, no customization, remote working and auditing etc etc. As taxpayers and parents that is important to us.
- Schools are more complex than most small businesses in few key areas. If we can solve reporting for schools we know we have fulfilled our vision of a relational accounting system. What does that mean I hear you ask?
At Xero we love databases. One of the things that has bugged us for years is that accounting systems are inherently hierarchical. That means that the Chart of Accounts is a nested tree structure. The problem with a tree is that you can only report one way and you end up repeating parts of the tree structure in the chart. This leads to very long Charts of Accounts. Some schools have more than 600 or even a 1000+ accounts to capture all of their reporting requirements. New requirement – add some more codes. After a few years it’s a mess.
In addition the ladies in the office need to develop special rules around what goes where. The system becomes so unwieldy that all the effort is in putting things in the right place and reporting becomes expensive and hard. Even worse, reporting gets delivered months later and is hard to understand. School stakeholders don’t have the information they need and are running blind.
Relational databases solve this problem, they allow multiple dimensions to be modeled. In Xero we’ve implemented these as Tracking categories. You can read more about Tracking here. http://help.xero.com/#Settings_Tracking.
So far we’ve kept Tracking pretty simple in Xero for our small business customers. But schools need another few levels for detailed school reporting. We have this work on the plan for later this year. Right now our critical path in this area is end of year reporting, which allows flexible reporting based on Tracking codes. Once this is complete then we can extend tracking to where we want to take it for schools. Already we’ve added other features like Fixed Asset importing that are also important for school administrators.
It’s important to note that we are not building a School Management System (SMS). Rather, we are putting school specific requirements into our accounting engine and working with API partners like Assembly who are building a web based SMS that will link seamlessly with Xero. What we are doing for schools will allow larger businesses to get the benefits of Xero as well as discussed previously.
We’re seeing some great new School specific partners like Eclypse, Ben and Bruce at Accounting for Schools and Clyde at William Buck. They’ve been very vocal in making sure we meet schools requirements next year.
But we’re delighted that Schools are already seeing the benefits of online accounting with what we have available today. We’ve still go a lot to do but off to a flying start. Don’t forget to join us on LinkedIn to get your requirements in.