Today we’re announcing a new initiative for the accounting industry.
Right now Xero offers client side accounting, as well as accountant side features such as annual reports. We believe the ‘single ledger’ is a fundamental disruption to the accounting software industry because it provides huge efficiencies to the accounting practice and reduces cost dramatically.
Examples of what we’ve already delivered for accountants include Xero Partner Edition, Cashbook and recently Ledger – all these were developed based on partner feedback. We’ve also delivered the first part of Final Accounts (Reporting Codes), and those who’ve seen previews of Xero Final Accounts can’t wait for its release.
As we provide more day-to-day requirements for accountants on the Xero platform, we’ve taken a good look at the other software they use to run their practices. We obviously need to coexist with these products, and used together, there’s a huge impact on productivity. This has lead to the initiative we’re launching today.
Frankly, we were shocked at the software used by many accountants to run their practice and the acceptance of it. We’ve seen low quality and very dated solutions which cost tens of thousands of dollars for the software and servers. Further, we don’t believe the roadmaps of the incumbent vendors will take accountants down a desirable path. Under these vendor models, server environments will get more complex and expensive. This is the opposite to what’s happening with the Cloud. Cloud vendors like Xero manage complex applications for you and share the cost among a broader base. The Cloud approach delivers commodity pricing.
Accountants are not technology experts and it’s expensive and at times and mind boggling for them to work out what is the best set of solutions for their practice. We are technology experts. Not just in the small business space, but we have a very good understanding of mid market and enterprise solutions. Obviously we’ve been keeping track of what the big vendors are doing in the Cloud too.
Having taken the time to understand the requirements of our accounting partners, what they need includes: client accounting, final accounts production, tax filing, practice management, document management, customer relationship management, electronic marketing, office productivity, file storage and printing and a website. It’s a big list of applications that need to work together.
Subsequently we’ve formed a view of why the market is – as it is. In reality no one vendor provides all of those things. The accountant’s challenge has been to work out which products are best and pay someone to integrate all of those systems together. Accountants have told us this can be a real headache. What’s more you may have had to suffer bad service, not to mention great expense.
Accounting practices are small businesses themselves, so selling to you and supporting you is tough. Implementation projects tend to be a nightmare and the types of vendors that sell into the market are just not the ‘A’ team.
There is a better way. And it’s much cheaper.
Together with a number of our partners we’ve come up with a selection of best of breed products that work well together. And we’ve really thought about how we bring commodity pricing to you – to save you money, not just headaches.
There is no perfect system – yet. But we’ve brought together a suite of technologies and supporting vendors who will commit to work hard for you so you have an integrated set of tools that will make your accounting practice hum.
One of our primary partners in launching this initiative, which we call the Modern Practice, is Microsoft. Microsoft is the largest software company in the world and you’re no doubt already using their products. They have commoditized a number of key services by moving them to the Cloud. This means you won’t have to buy and manage your own servers anymore.
The other missing piece has been web based tax. We’ve thought hard about developing this ourselves, but we also feel tax it is tied closely to practice management, plus it’s country specific. So we’ve decided to work with one of our great partners WorkflowMax, and provide them with some additional capital to develop a tax module. We announced that earlier today.
When can I have this?
Most of this is available today and we’re hard at work doing the bits that are missing. But we’re ready for you to start planning and moving straight away. If you are considering changing your server technology to anything else, we suggest you make contact immediately and we will explain why this approach is better. We’re initially starting in New Zealand, but will quickly add the appropriate partners in other countries.
Let us know what you think of this initiative or any questions by commenting here on the blog. You can also help us shape the Modern Practice by joining the conversation on our LinkedIn Group.