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2016 changes to standard and premium pricing plans in Australia

Posted 2 years ago in Xero news by Trent Innes
Posted by Trent Innes

First up, thanks to the small businesses, bookkeepers and accountants who’ve joined the Xero revolution. We couldn’t have got this far without your support. You chose Xero because you wanted a better way of doing business, and we’re working hard to deliver innovative new features, partnerships and products to you.

Creating and implementing game-changing ideas is what drives and inspires us. And it’s not just talk – Forbes ranked Xero as the World’s Most Innovative Growth Company in 2014 and 2015, and we were BRW’s Most Innovative Company in 2014.

We’ve channeled over $100 million into the Xero platform in the last two years, made hundreds of product updates, and added powerful new features and integrations. Because Xero lives online, updates and new features are delivered automatically – unlike the clunky and expensive upgrades required for desktop software.

Innovative payroll for small business

Processing payroll can be time-consuming and complex – basically, a major headache for business owners.

Payroll in Xero makes it easy to manage your payroll from anywhere. It saves hours of administrative work and lets you lodge reports with the ATO – all from within Xero. Your payroll data automatically appears on your general ledger after a pay run to help keep your accounts up-to-date.

Payroll has rapidly evolved with significant updates in the last two years. Here are some of the recent highlights:

  • Seamless and compliant superannuation

Auto-super on premium plans automatically makes contributions to different super funds for your employees. Xero’s auto-super is gold-level certified for SuperStream, the ATO’s new superannuation payments standard. All businesses need to use a SuperStream compliant service by 30 June 2016.

  • Mobile app that cuts the paperwork from leave requests and payslips

With Xero Me, our app for payroll users, employees can request leave and managers can approve or decline it – all from their mobile. Xero Me saves on administration because employees can view their pay history and submit timesheets from anywhere.

  • Pay out unused leave when employment ends

Save time and hassle by processing final earnings, unused leave balances and any redundancy payments in a single pay run. Increase accuracy because tax on unused leave is calculated automatically.

  • Easily view and manage leave

It’s now simpler to view accrued leave and opening balances, and leave requests are automatically included in applicable payruns.

And we’re not stopping there

We’re committed to constantly improving what we offer our payroll users. Here are some of the features we’ll launch in the coming months:

  • PAYG and withholding tax will automatically appear in the current activity statement
  • Bonuses and commissions will be supported
  • Employment termination payment summaries can be produced and lodged with the ATO from Xero

Plus there’s much more in the pipeline.

Adjusting prices to reflect greater value

We’ve reached a point where our prices no longer reflect the strength of payroll and what’s to come. For these reasons, we’ve adjusted the prices of our plans in Australia.

From 2 June 2016, our pricing plans for all existing and new subscribers will be:

52233_AUPricingRefresh_Table(1)

The biggest change is to the standard plan, where the limit of payroll employees reduces from five to one. For businesses with two to five employees, we’ve introduced a Premium 5 plan. Premium 5 has up to five payroll employees and the advanced features of auto-super and multi-currency, for $60 per month.

If you’re on a standard plan and do a pay run for more than one employee in May, you’ll be switched to the Premium 5 plan on 2 June. Otherwise, you’ll remain on the standard plan.

Existing and new premium plans will increase by $10 per month. If you’re on Premium 10 for multi-currency and haven’t ever done a pay run in Xero, you’ll be moved to the Premium 5 plan on 2 June and won’t have a price increase.

There are no changes to starter or partner edition plans.

No matter how this pricing change affects you, it’s a great time to review your needs and make sure you’re on the Xero plan that best fits your business.

Like to know more?

For more information about the price changes, see our answers to FAQs, and feel free to ask questions in the comments section of the blog below. If you have further questions or need help, please contact the Xero team support@xero.com.

Thanks,

Trent Innes

Managing Director – Xero Australia

193 comments

Matt @ Acrogym
March 3, 2016 at 11.07 am

It is a great initiative implementing these changes however I really feel that Xero is slightly missing the point of small business. Many small businesses these days only employ casual workers, that sometimes only work after school for a couple of hours. This includes (in my case) Gymnastics Clubs, but also bakeries, newsagents, pharmacists, cafes, restaurants, florists, etc, etc… the list is endless. I really feel that pricing should be based on Payroll turnover instead on number of employees. Working of the latter system, means that a small business who employs many casual workers for a total of 1 employee full time somewhere else, may pay a huge difference. The argument would undoubtedly be that there would be more work involved in hiring many casuals instead of a few full-time, however in many cases, super contributions and leave calculations become non existent… I believe this fee structure is used by Xero in the US… Just food for thought if you are serious about helping small business! Thanks for the update and forum.

Megan Firkin in reply to Matt @ Acrogym Xero
March 3, 2016 at 12.02 pm

@Matt, thanks for the suggestion, our development roadmap is heavily influenced by our customers and we really appreciate people taking the time to tell us what would work better for them. As you have pointed out, we offer payroll in different ways in some of our other countries, this is due to the feedback from the customers in those regions. To date, our customers have preferred to have payroll as part of their core subscription, however if this changed and there were enough people wanting something different, we would definitely listen. With this in mind, it would be great if you could add your suggestion to Community https://community.xero.com/business/topic/23/

Hugh
March 20, 2016 at 8.36 pm

I totally agree Matt,
We have a cafe and casual employees including students. We are a small business, a payroll $$ based charge would be much fairer.

Megan Firkin in reply to Hugh Xero
March 24, 2016 at 4.24 pm

@Hugh, thanks for the feedback. I know it probably sounds canned, but we really are listening.

Colin Johnstone
March 3, 2016 at 11.07 am

Hi , I am on what I thought was the cheapest plan. $50 per month. I am a sole trader and don’t use payroll. Will my plan now be $25 per month?

Megan Firkin in reply to Colin Johnstone Xero
March 3, 2016 at 11.11 am

@Colin, our cheapest plan is Starter at $25 per month. If this is more suited to your needs you can easily downgrade from MyXero

Julian Williams
March 3, 2016 at 3.29 pm

You could, but remember there is a 5 invoice monthly maximum, as well as 5 bills and I think 20 bank transactions for reconciliation

yvonne
March 3, 2016 at 8.32 pm

exactly the same question I had. sole trader, no payroll. I wonder if we’ll be moved down to $25/mth.

Megan Firkin in reply to yvonne Xero
March 4, 2016 at 1.06 pm

@Yvonne, if Starter meets your needs you are more than welcome to downgrade through MyXero. You can find out more about Starter here https://www.xero.com/au/pricing/

Alla Arkhipova
March 3, 2016 at 11.08 am

While the price increase isn’t huge in $ terms – it’s actually 10%, quite a bit.
The system has so many glitches for payroll, we are still calculating redundancies and terminations outside of Xero. PLUS, your payment summaries are not capturing redundancies! Employees that were made redundant have to be processed manually.
Leave changes that you introduced made life more complex, not easier. Leave isn’t processed in payruns unless you go through EVERY single employee and approve their leaves. That leave isn’t flagged properly in the Payroll Dashboard. So you need to open each and every file and check if employee submitted a leave request. What a joke. And now you make us pay for this?
Your super payments are quick and nice – we give you credit for that.

Trent Innes in reply to Alla Arkhipova Xero
March 3, 2016 at 1.03 pm

@Alla, thanks for your feedback. Are you aware that our recent “Final Pay” feature release lets you automatically calculate taxes on unused leave for redundancies and normal terminations? The tax free component of the redundancies can be entered on the payment summaries as lump sum D in Xero. Also, Leave tab under payroll menu lists all the leave requests for all employees. You can also create leave for any employee from this tab. This means you no longer have to go to the leave tab of every employee. Lastly, ETP Calculations and Payment summaries is a feature that we have on our road map.
PS: Really glad you like and enjoy the automatic Superannuation feature, we are getting lots of good feedback on this.

Michael
March 3, 2016 at 11.09 am

Not happy about a price rise of $10 per month because we have 2 employees.

Megan Firkin in reply to Michael Xero
March 3, 2016 at 11.21 am

@Michael, we totally appreciate your frustration, it took us a long time to identify the right limit for this very reason. Unfortunately, whilst we looked long and hard, there wasn’t a solution that would suit everyone perfectly. Hopefully the addition of auto super is a benefit to your business.

Purdi in reply to Megan Firkin
March 3, 2016 at 11.27 am

I think after looking long and hard Xero worked out how they could make the most money and decided their smaller customers don’t matter.

Megan Firkin in reply to Purdi Xero
March 3, 2016 at 2.26 pm

Small Business – whether big, medium, small or sole traders are at the core of our business and what we do.

Chris in reply to Megan Firkin
March 3, 2016 at 12.15 pm

I am in the same position, ending up paying an extra $10 a month for no benefit (the one beneficial item improving payroll system is “coming soon” while the price increase is “coming NOW” – seems a bit eager)

Generally, I’ve found the payroll system to be pretty poor, probably the biggest issue I’ve had with Xero.

I only have 2 employees and you can’t (yet) do automatic payg or easily reconcile payments against who got paid (especially in a small company with irregular cash flow)

To us 90% of the system is worthless on a small scale yet we have to pay extra to get it for the +1 employee

Trent Innes in reply to Chris Xero
March 3, 2016 at 1.13 pm

@Chris, not sure if you have read the blog but we have added a number of significant updates in the last two years as well as having an attactive pipeline of new developments. I would be interested in knowing more about the challenges you experiencing with payroll so please don’t hesitate to contact me on trent.innes@xero.com

Sandy in reply to Trent Innes
March 21, 2016 at 8.41 am

Never pay for upgrades? These increases are just too much for small business and for a product that is still lacking in so many ways.

Megan Firkin in reply to Sandy Xero
March 24, 2016 at 4.04 pm

@Sandy, in all honesty, we hate increasing prices but we are confident that the pricing we set fairly represents the value of our service.

Lainie
March 3, 2016 at 11.04 pm

2 employees, cop a $10 price hike and be happy ……. yep that’s it Xero completely unbalanced decision …..not happy…….why should I stay??????? And I don’t need spiel about we looked at this and looked at that and not everyone will be happy blah blah blah! What a joke!!!!!! And I think your replies are a bit too defensive in regards to justifying an unjustifiable decision! I think you limited the $50 plan to one employee because you have so many small business with 2 employees… Right? Very very dissappointing.

Marina Holmes in reply to Lainie Xero
March 4, 2016 at 11.05 am

@Lainie, We’re sorry that you feel that way. Happy to discuss in more detail, feel free to contact myself marina.holmes@xero.com or Trent Innes trent.innes@xero.com

Philip Brookes
March 7, 2016 at 6.05 pm

Whilst I’m a big fan of Xero overall, I’d have to agree with the comments about small businesses with just 2 employees. I understand your carefully crafted replies, but don’t believe you’re being open and transparent. I don’t believe any business with 2 employees would have said “Yes, force us onto the $60 plan”. I don’t believe it’s customer feedback that’s shaping this. I hate to say it, but it does appear a cynical money-grab which will harm Xero’s reputation with small businesses. Businesses with 1 or 2 employees are in a different league to those with 4, 5 or more. It’s like you’ve thrown the little kid into the adult’s boxing class and said “Knock yourself out!”
Of course, if you swallowed your pride, admitted you’d made a mistake, and made the Standard Plan cover 1-2 employees, we’ll forgive you.

Marina Holmes in reply to Philip Brookes Xero
March 8, 2016 at 2.20 pm

@Philip We’re listening to all feedback and happy to discuss. Feel free to email myself (marina.holmes@xero.com) or our MD Trent trent.innes@xero.com on this. Thanks

Purdi
March 3, 2016 at 11.25 am

I’m a little taken aback by these changes. We are also on what we thought was the cheapest plan $50 per month and use payroll for 2 employees (the business owners) – how can you justify a 20% price rise for only 2 employees? I am disappointed with Xero and will look into subscribing with another provider such as MYOB.

Megan Firkin in reply to Purdi Xero
March 3, 2016 at 11.34 am

@Purdi, Our cheapest plan is Starter (which includes payroll for 1 user) at $25 per month. As I have detailed in my reply to Michael, we have spent a lot of time reviewing this and whilst whilst we appreciate that this won’t work for everyone, we are confident that the pricing we set fairly represents the value of our service; particularly with the inclusion of auto super.

Ashley Knight in reply to Megan Firkin
March 3, 2016 at 11.37 am

I disagree.

Megan Firkin in reply to Ashley Knight Xero
March 3, 2016 at 11.47 am

@Ashley, happy to discuss this further if you want to contact me directly megan.firkin@xero.com

Ashley Knight
March 3, 2016 at 11.30 am

Another price increase is disappointing. Perhaps now is a good time to research options provided by MYOB and Quickbooks.

Megan Firkin in reply to Ashley Knight Xero
March 3, 2016 at 11.43 am

@Ashley, the last time we increased our price was 2013, yet we have transformed our services – delivering over 500 updates in the last year alone and significant enhancements to our payroll service. Everyone at Xero fully appreciates that price increases are tough on small businesses, however like all businesses, we want to deliver value to our customers and that means continuous investment into our products and services – including free training so you get the most out of your investment in Xero. As outlined in my reply to Purdi, we are confident that our pricing fairly represents the value of our service, however we accept that some people will have a preference for a lower cost solution and the trade-off that brings.

David Lake
March 3, 2016 at 12.26 pm

MYOB just put up there prices as well on some products @Ashley.

Colin Johnstone
March 3, 2016 at 11.35 am

Please disregard this and my previous question I see now why I pay $50. Regards Colin

Mathieu
March 3, 2016 at 11.35 am

Not happy at all about the price increase. A smart way to do that would have been to offer a $60 plan with added features as an incentive for people to move to it.

When do you intend fix the PAYG not showing up in BAS reports?
This bug has been reported since mid-2012 [1] and still hasn’t been addressed! How do you want to be taken seriously and attract big companies if you can’t even cover the basics?!
[1] https://community.xero.com/business/discussion/109801

You talk about SuperStream, does that mean it is now available in the Premium 5 plan? This is a feature that would be very useful when you manage more than 1 payroll. That would also make the use of word “Premium” in the plan name meaningful…

Trent Innes in reply to Mathieu Xero
March 3, 2016 at 1.05 pm

@ Mathieu, the new Premium 5 package includes multi currency and automatic superannuation – If you have the right superannuation fund set up and are using this feature your Superstream compliance is automatically taken care of. Also, PAYG on BAS will be released VERY soon – watch this space.

Nathan in reply to Trent Innes
March 7, 2016 at 11.51 am

I’m very happy to hear about PAYG, but it is well overdue. I think you should’ve waited to fix this before increasing prices, since the pricing is basically payroll driven. That would’ve been a great show of faith for your customers.

Marina Holmes in reply to Nathan Xero
March 7, 2016 at 3.50 pm

@Nathan Thanks for the feedback. We’re listening and taking it all on board.

Alex
March 3, 2016 at 11.40 am

This is such cheeky behaviour. You are a SAAS provider – your plans should never go up! Go speak to AWS about how to run a business. Disgraceful, looking at your competitors.

Trent Innes in reply to Alex Xero
March 3, 2016 at 12.15 pm

@Alex We have delivered hundreds of new updates into the Xero platform and established a number of global partnerships in the last year alone that provide significant value to our customers and partners. We have analysed the software market very carefully and are confident that our pricing fairly reflects the superior value and experience Xero customers look for.

Alex in reply to Trent Innes
March 3, 2016 at 12.54 pm

So you feel that this justifies squeezing more out of your customer base than they signed up for? Every one of your customers pays you hundreds of dollars a year for a service that (on a per customer basis) costs very little to run. We expect updates for our money. What we don’t expect is cost increases. This is just a money grab – nothing more.

Katherine
March 3, 2016 at 5.15 pm

Seriously Alex, the first price rise in 3 years. Are you trying to say that no business should ever put up it’s prices, regardless of it’s circumstances or inflation. Get a grip. I’d hate to see how much you whinge about Australia Post. Don’t get mad, get smart, go buy yourself some Xero shares.

Alex
March 3, 2016 at 6.44 pm

Thanks for your advice Katherine. Xero shares are at a 3yr low, are one third of their peak and don’t pay a dividend, so forgive me if I don’t follow your suggestion.

AWS (that is Amazon’s cloud service) consistently drop their prices because due to Moore’s Law, their costs keep getting lower. I don’t expect you to understand all this, but the bottom line is the Xero’s ongoing costs are also reducing (of course they will tell you they keep hiring staff and their costs are increasing but that is missing the point).

Nathan
March 7, 2016 at 11.54 am

AWS is not really a fair comparison here. AWS provide core infrastructure, their software investment is pretty limited.

Xero provide an application, their software investment is continual. Not all updates provide value to us as customers, but continual changes to tax law mean that accounting software can never be left ‘as is’. A better comparison would be Salesforce.

In addition, Xero support is outstanding, and requires no additional investment.

(Note per my earlier comment about PAYG, I’m not a one-eyed Xero fan, but I am largely a happy user)

Very disappointed
March 3, 2016 at 11.46 am

A 20% increase? My business could never get away with that! Pretty pathetic stuff guys.

Megan Firkin in reply to Very disappointed Xero
March 3, 2016 at 2.23 pm

Without knowing your business and the ongoing investment you make into adding more value to your products and services that will benefit your customers, I can’t comment on what you charge. What I can say is that we have thought long and hard on this and believe our revised pricing fairly represents the value of our service.

JD in reply to Megan Firkin
March 17, 2016 at 9.11 pm

You’ve thought long and hard about how to count the extra revenue…

Leon
March 3, 2016 at 11.54 am

So, when Xero considers that it has added value to it’s product for its users, Xero is going to up the price of said product?

Is that what I’m reading here?

Megan Firkin in reply to Leon Xero
March 3, 2016 at 2.22 pm

@Leon, we have simply reached the point where the prices no longer reflect the value of the product and the significant number of updates and enhancements delivered in the last two years.

Leon in reply to Megan Firkin
March 4, 2016 at 1.18 pm

Megan.

What do you mean when you say ‘value of the product’?

Megan Firkin in reply to Leon Xero
March 4, 2016 at 2.59 pm

@Leon, the value is based on things like the features, functions and the benefits they deliver to our customers. As outlined on the blog, payroll has had a number of significant updates in the last two years and there is more on the horizon. Hope that helps. Warm regards, Megan

Linda
March 3, 2016 at 11.55 am

As it is a ‘subscription’ and not a one off purchase, I can not see how you can justify a price increase at the lowest end of your customer base. I have 3-4 employees in my books but generally only one gets paid each run as they are casual. There is a lot of options in the Standard plan that are of absolutely no use to me but I’m paying for it.
This is just greed. We’re hostage to ‘the cloud’ and it’s time to look at ‘non-cloud’ accounting software. We are able to lodge on line with ATO anyway without Xero.

Megan Firkin in reply to Linda Xero
March 3, 2016 at 12.28 pm

@Linda, as detailed in the blog, because Xero lives in the cloud, updates and new features are delivered automatically as part of your subscription e.g. there are no annual software (and potentially hardware) upgrade costs. This is mentioned in some of my other replies, but I really encourage you to take a look at our free training options to see if you are getting the most out of your subscription. We have added a huge number of enhancements that will save you time and money.

Mitchell Reece
March 3, 2016 at 12.01 pm

As someone who has seen the transformation of the industry over the last few years and the way that Xero continues to investment in new features and community requests, I would recommend anyone thinking of moving to another solution to make sure you thoroughly do your research.

Xero has left it’s competitors behind in a lot of areas and by saving $10 or $20 a month in subscription fees, you may find you are adding hours to your work week. Hours that can be better used in growing your business (Or maybe even time with the family??).

I’m not saying you should or shouldn’t change, just please do your homework.

Megan Firkin in reply to Mitchell Reece Xero
March 3, 2016 at 12.20 pm

@Mitchell, thanks for your post. A huge number of the developments delivered in recent times have been focused on delivering measurable time and cost savings to small businesses and Partners and we really encourage everyone to take advantage of our free training options to ensure they are getting the most our of their subscriptions.

Ryan Carter
March 3, 2016 at 12.02 pm

So basically you’re forcing standard plan customers with more than one employee onto a $10/month higher rate plan? Not cool. Don’t get me wrong I think Xero is good value for money but signing people up to a service with a specific set of features and then upping the payment to retain those features is pretty poor business. If as you’ve said you’ve reached a point where your pricing no longer reflects the amount of features you offer, perhaps it would be better to offer a new plan with more features and the option for people to upgrade to it.

Megan Firkin in reply to Ryan Carter Xero
March 3, 2016 at 12.11 pm

@Ryan, This has been a really tough one. We totally recognise the challenge for those only paying 2 employee’s and for that reason we modelled lots of different options. In the end, whilst we recognise this doesn’t work for everyone, it works for the majority. Really hope the added benefit of auto super included with Premium 5 is useful to your business.

Linda
March 3, 2016 at 12.12 pm

Is it useful to Xero to know that the email fell flat with me?

The blog is great and offers both a thanks to the users and a sniff of innovations to come … which is the “what’s in it for me” part. Perhaps in trying to cut the email down all the nice stuff was taken out that might have softened the message a bit.

There’s a lot to be said for simple across the board increases and even though it is not a lot of money, a 20% increase is really hard to deliver to a small enterprise in any costs – I think it would have been better to tinker with pricing a bit more at the lower end. We always have to remember that “from little things, big things grow”.

Marina Holmes in reply to Linda Xero
March 3, 2016 at 12.19 pm

@Linda Thanks for your feedback, we have taken it on board.

Mark Calderwood
March 3, 2016 at 12.21 pm

20% increase in cost, a bit rich since I have found a couple of glitches in the program, where to next on pricing. Just because we have 2 or 3 casual employees does not us more profitable.

We might start looking at other software options.

Trent Innes in reply to Mark Calderwood Xero
March 3, 2016 at 12.31 pm

@Mark, everyone at Xero fully appreciates that price changes are tough on small businesses, however we are comfortable that our pricing fairly reflects the value and experience Xero customers look for and we provide through our continuous investment into our products and services.

Robert Tal
March 3, 2016 at 12.25 pm

Just wanted to say the starter plan ($300 per year) is an absolute insult to small businesses in Australia. Which small business does 5 or less Invoices per month?
If a business is doing such low volume, how can you justify charging that much?
Am I missing something?

Trent Innes in reply to Robert Tal Xero
March 3, 2016 at 12.42 pm

@Robert, The starter plan is designed to help businesses get started on their journey and there are no changes to the cost of that plan.

Patrick
March 3, 2016 at 12.38 pm

You seem to justify the increase by saying that you delivered hundreds of updates in the past years. Guess what, that’s what SAAS businesses do! You made millions and you are expected to invest some of this back into the product.

With your logic we should expect a continuously increasing monthly fee simply because you add features or do expected service updates.

Either sell a standalone product and then charge for updates or do SAAS. You can’t do both.

Absolutely not happy about this. Xero is expensive for small businesses as it is and this pricing strategy shows clearly that your main goal is to increase profits, not to serve more people better.

Trent Innes in reply to Patrick Xero
March 3, 2016 at 1.14 pm

@Patrick, Our last price increase was in 2013 and since then we have delivered a huge range of new features that make it easier to do business. We are comfortable that our pricing fairly reflects the value and experience Xero customers look for. We accept that some people will have always prefer a lower-cost solution and the trade-offs that brings.

Patrick in reply to Trent Innes
March 3, 2016 at 5.01 pm

Posting another canned reply does nothing to show me that you value your customers. As I pointed out, SAAS is supposed to have continuous and frequent updates with useful new features. That’s why we pay you monthly instead of just once. – By your logic we will continuously see price-hikes in the future.

Megan Firkin in reply to Patrick Xero
March 3, 2016 at 5.17 pm

@Patrick, hey really sorry you feel our responses are canned, we pride ourselves on being open and honest. Happy to discuss your points in more detail if you want to contact me direct megan.firkin@xero.com

Nikki
March 3, 2016 at 12.59 pm

Thanks Xero for highlighting the changes, it’s very timely given that we are investigating a trial version of Xero at the moment.

Our current accounting system has no cash flow impact on our business so we are being very careful with our assessment of conversion costs (not free because we are Mac interface) and a $50 (now $60) subscription per month. It concerns me that with just a couple of months notice, you’ll increase subscription based fees by 20% and I have no idea if the extra payroll functionality will be of any benefit.

The small businesses that I’ve spoken to about Xero (60% of businesses in our networking group currently use Xero) and all are perfectly happy with your offering thus far (and huge advocates for your software)… Why pay extra for something that’s not broken?

I see it as a daunting task to transition to a new accounting system already, and now the ongoing financial impact will become more burdensome with your new fee structure. For our small 2 person business, it makes us second guess or intent to change to Xero.

Megan Firkin in reply to Nikki Xero
March 3, 2016 at 1.22 pm

@Nikki, the pricing on Starter and Standard are saying the same at $25 and $50 respectively and our last price change was in 2013. The changes communicated only relate customers using payroll for more than 1 employee and are based on the significant enhancement of the service in the last two years, including the addition of automatic superannuation. I hope this helps to clarify the changes but please don’t hesitate to contact me if you have more questions megan.firkin@xero.com

Alex
March 3, 2016 at 1.00 pm

FYI – your pricing page still has the old plan (https://www.xero.com/au/pricing/). Signing anyone else up to the standard plan after this announcement and promising payroll for 5 users is borderline fraud.

Trent Innes in reply to Alex Xero
March 3, 2016 at 1.11 pm

@Alex, the pricing changes do not come into effect until the 2nd June, 2016, with a lead time of 90 days. There is a notification to the left of the table on our pricing page highlighting the upcoming change.

I’m happy to discuss your feedback so feel free to contact me trent.innes@xero.com

Glenn
March 3, 2016 at 1.38 pm

Well done guys!!! As a silver partner you have cost me at least 40% of my Xero clients at first viewing, because they will easily move to MYOB Essentials online with unlimited payroll for less than they are paying now. Not that I mind because I will earn some coin in the data transfer.
As with others most of my clients have casual staff that are only put on during necessary periods and not each week or month. Why should they be punished for this? I agree with Matt that packages should be based on payroll turnover not number of employees. They are nearly all registered with the ATO’s SBCH so do not need the much hyped Superstream function.
You obviously don’t understand that money in small business is at a premium nowadays and the slightest change in pricing is enough for people to rethink their futures.
My question to you is how will my silver partner status suffer when my clients jump ship? As this will be entirely your fault I am hoping that I will not be ‘demoted’ because of this.

Trent Innes in reply to Glenn Xero
March 3, 2016 at 2.15 pm

@Glenn, thanks for your comment. Regarding your partner program status, it’s best to speak to your Account Manager who is best placed to advise on this.

A key foundation of our product is to automate and streamline tasks for small business and their advisor. Auto-super is a prime example of this and the feedback we have is that it provides a lot of value. Happy to discuss this in more detail, my email address is trent.innes@xero.com

Taylor
March 3, 2016 at 3.08 pm

From what you’ve said, I would guess you’re not very good at understanding the value of xero or communicating that to your clients – if you think $10 extra a month will sway them.

Go charge your clients $80 an hour to move their data to a terrible system – boy you’re a great financial advisor aren’t you. I ran from MYOB online months ago and would never look back!

Charles Klvana - Eye on Books
March 3, 2016 at 1.42 pm

While it’s always hard dealing with a price rise on any service you use a lot, this move today is completely understandable. From what I see it’s not about rising costs, so much as a MUCH MORE valuable service than what was offered just 2 years ago.

Just the addition of automatic email reminders in Xero, saves us $15/month from using an addon that we needed to use before. Even with an increase of $10/month it’s still cheaper than having to had to use the addon + Xero previously for that ONE feature! If you’re not using email reminders, you’re not using Xero to it’s fullest extent!

One thing though, I’d suggest getting rid of the word “premium” for the additional plans. Everytime I fill up with petrol and I need to use “premium” instead of normal, I fell like I’m being ripped off and paying a “premium”. How about calling it “Xero + Payroll 5”, and “Xero + Payroll 10” or something?

That’s my contribution to making Xero successful! 🙂

Marina Holmes in reply to Charles Klvana - Eye on Books Xero
March 3, 2016 at 1.47 pm

@Charles Thanks Charles, appreciate the comment. Will take the naming of our plans on board!

Anthony Wardley
March 3, 2016 at 1.49 pm

I’m feeling a bit disappointed by the reduction in employees on the $50 plan. After reading through the amount of comments in 2013, the overriding theme people had an issue with was the $50 plan at 1 employee doesn’t allow your mum and dad business to use the plan. I think this still holds true today. Most of these businesses only have two employees, who don’t use leave requests, don’t use the Xero Me mobile app (and actually can’t because they are payroll administrators) and don’t need super stream compliance. Realistically these types of business will be pushed up a plan for very little difference in the product they are actually using.

Xero is still a great product, and will continue to be used and recommended, but may be a harder value proposition in those middle plans in some circumstances.

On a separate note, the plans seem to be getting larger in number and more complicated for people to understand. By my count we are up to 10 plans now. I would love to see consideration be given to paying by features needed. So for example pay a monthly fee for bankfeeds, GST, Invoicing & accruals, payroll (with some tiers by number of employees). I think this would be much easier to understand for customers and allow more transparency and flexibility in what is being paid for.

Anthony Wardley
March 3, 2016 at 1.53 pm

I should add multi currency and potentially super stream to the list of options you could switch on above too 🙂

Trent Innes in reply to Anthony Wardley Xero
March 3, 2016 at 2.08 pm

@Anthony, I’m happy to discuss your feedback please contact me at trent.innes@xero.com and we can organise a time.

Darren
March 3, 2016 at 1.51 pm

I agree totally with most of these comments. I employ 2 people part time. Although I’ve been told automatic PAYG has been “in the pipeline” for over 2 years we still haven’t seen it. My payroll isn’t complex so those updates aren’t that important to me but some of the basics like automated BAS entries are. So now I’m asked to pay 20% extra ($60) for no real gain. I feel like we are funding Xero development for the higher end business. It would only cost me $40 more if I had 100 employees!!

Megan Firkin in reply to Darren Xero
March 3, 2016 at 2.03 pm

@Darren, watch this space re: PAYG on BAS… I can’t say when but it is close. Premium 5 also includes automatic superannuation so providing you have the right superannuation fund set up and are use this feature, Superstream compliance is automatically take care of.

Paula Granelli
March 3, 2016 at 1.56 pm

Xero I think you are a great company and have revolutionised the way small business can do business. I also think that this move might not be such a good one. I would not like to see you price yourself out of the market before you’ve really gotten a foothold.

I’m finding it difficult enough to sell the product to small operators that don’t have any employees (sole traders) but have over 5 invoices and 20 bank transactions a month. $50 pm is a lot of money for them and the $25 plan just doesn’t give them what they need. Perhaps a $35 plan for them?

I’ve recently managed to persuade a plumber to upgrade to the $60 plan so that I can easily do his super for 3 employees. Is he now going to have to pay $70 for the privilege? Seriously?

When I started my business in 2010 I decided to affiliate myself with Xero and become a champion. I’m finding it difficult enough to reach Bronze level without you making it impossible.

I wonder why you are raising the price so much? I know it costs a lot of money to develop new software and implement great solutions. Perhaps you are growing too fast and trying to do too much? I think you need to let your market catch up. Small businesses, which you say are your target market, cannot afford these prices. Please think again before releasing them to the public.

Trent Innes in reply to Paula Granelli Xero
March 3, 2016 at 2.23 pm

Thanks for your comments @Paula, we are grateful for the support of our customers and Partners.
If your Plumber customer has less than 3 employee’s then there should be no change to the price as you will now be on the new Premium 5 package (which includes automatic superannuation) when it becomes available on the 2nd of June.
Also, there is a discussion on the topic of greater transaction numbers for Starter in Xero Community, you can add your vote at the following link https://community.xero.com/business/discussion/131381

Cali
March 3, 2016 at 3.12 pm

Amen and well said!

Duncan Caruana
March 3, 2016 at 1.58 pm

Firstly Xero should not try to spin the price increase as a benefit to their customers. However having said this we like Xero it’s “in our opinion” “way better” then other products on the market and sure a price increase is never a good thing for anyone but if the alternative is not using Xero for our accounts we are happy to pay the extra. A word to Xero : The Xero company deserves to make money like everyone else, Just keep in mind who got you to where you are now. Slowly creeping up the price may only work for so long .

Marina Holmes in reply to Duncan Caruana Xero
March 3, 2016 at 2.39 pm

@Duncan We are grateful for the support and comments from customers and partners like yourself who have enabled us to build our global platform.
Decisions like this are never easy to make as we appreciate there is an impact on our partners when we change our prices. We’re listening to all the feedback coming in and taking it on board.

Anita
March 3, 2016 at 2.27 pm

Love the Xero program and will continue to use. Price rises are never fun but an essential part of business growth.
Just wondering, if we have 7 employees set up in Xero, yet most of them are people we call in for jobs maybe twice a year, so our regular pay runs only consist of less than 4 employees per week, can we stay on the Premium 5 package or does your billing go on the amount of employees we have set up in the system?

Megan Firkin in reply to Anita Xero
March 3, 2016 at 2.32 pm

@Anita, if you know you are going to exceed the limit of 5 employee’s you can upgrade to Premium 10 over that period and downgrade back to Premium 5 when your employee number drops back to normal. However please be aware that you can only downgrade your pricing plan once every 30 days.

Gareth
March 3, 2016 at 4.36 pm

You dirty robbing *

That’s just down right theft.

You have lifted your pricing purely for money making purposes, do not * us about providing updates. You still haven’t implemented Bpay as a paying option!

Absolutely disgusting what you have done. You have forced this onto your customers knowing damn well it would be very difficult for them to migrate.

*Edited for language

Gareth
March 3, 2016 at 4.37 pm

A like-it or lump-it tax. Disgusting behaviour.

Nik
March 3, 2016 at 6.23 pm

“First up, thanks to the small businesses, bookkeepers and accountants who’ve joined the Xero revolution.”

Now for all those small businesses and bookkeepers, we have decided to take more money and offer very little in return. Love Xero

Megan Firkin in reply to Nik Xero
March 3, 2016 at 6.54 pm

@Nik, $100 million investment in development and 500 updates over 2 years is hardly “very little in return”. As consumers ourselves, we get that nobody wants prices to change, however we have reached the point where what we are offering is not reflected in the price. I guess we could have just changed the price, however we analysed the data and identified a number of our customers only used payroll for 1 customer and a number used payroll for more than one and would benefit from our automated superannuation capability. Unfortunately, as much as we tried, we recognise this isn’t a perfect solution for everyone. Happy to chat more to you about this if you want to drop me an email megan.firkin@xero.com

sid 2.0
March 3, 2016 at 6.39 pm

Well, that’s decidedly average 🙁

I’ve been on your standard plan since 2013 as a sole trader, and the very same month I happen to add my first employee is the exact same time you reduce the number of payroll employees available on the the standard plan!

Given that you aren’t adding any new functionality around this price point (but only taking it away), I imagine it should come as no surprise the number of negative comments you have received in response to this particular price increase.

Have you considered meeting us loyal Xero customers halfway? How about three employees on the standard plan, rather than just one?

Megan Firkin in reply to sid 2.0 Xero
March 3, 2016 at 7.02 pm

@Sid, I will make sure your suggestion gets to the right people, in the meantime if you are only using payroll for 1 employee your price won’t change and will stay at $50. Also, as detailed in our blog post we have added a number of significant updates in the last two years and have a number in the pipeline for the coming months, plus the new Premium 5 plan will include automated superannuation and multi-currency.

sid 2.0 in reply to Megan Firkin
March 3, 2016 at 9.58 pm

I have two employees – myself and my new employee. I probably should have written “my second employee”, hence the disappointment, as I have been paying for up to five employees since 2013 (because I also need unlimited invoicing), and now having to pay an additional $10/month, having only just started taking advantage of a feature that was previously included in the $50/month plan 🙁

Regarding the two features you mention:

Automated superannuation – this isn’t hard to do when you only have a handful of employees, and what with the Superannuation Clearing House. What advantages does your offering provide that this solution doesn’t?

Multi-currency – while this could be handy, my financial advisor has advised that the currency feeds you use aren’t updated frequently enough to ensure transaction amounts match with bank/transaction feeds. Can you confirm/refute if this is the case?

So, still not entirely happy about paying $10/month extra just so I can have a feature which I was already paying for… 😐

Megan Firkin in reply to sid 2.0 Xero
March 4, 2016 at 3.11 pm

@Sid, sorry it has taken me a little while to reply to your message, I wanted to check in with the appropriate teams within Xero. The huge benefit of automatic superannuation is that it is fully integrated into Xero (e.g. no logging into different systems or completing separate payments etc), so providing the right superannuation fund is set up, Superstream compliance is automatically taken care of. In response to your question about multi-currency, XE feeds are updated hourly not four hourly, but the frequency doesn’t matter because they are mid market rates. Our feeds are not designed to automate the rate on a payment, the actual buy rate you get from your bank is reflective of the relationship you have agreed with them. The XE data is used to revalue outstanding unpaid invoices so that when you run a balance sheet or P&L we can give you the current value, vs. what the rate was when you first issued the invoice. I hope this helps Sid, please don’t hesitate to contact me directly if you want more information megan.firkin@xero.com

Shannon
March 3, 2016 at 7.41 pm

This is a very poorly explained and executed hit to your customers. Reducing the service of a plan is a very poor approach. The full service plan signed up for should be honored at least for the 12 month period. The distinction between 1 and 5 employees is massive for small businesses. This makes me think Xero does not understand small business. Three employees would have been a more fair and appropriate cut off. It makes very little sense. Will be exploring data migration options. An explanation of ‘we did the numbers and this is best for us’ doesn’t really cut it.

Megan Firkin in reply to Shannon Xero
March 3, 2016 at 8.12 pm

@Shannon, at the risk of sounding “canned” small businesses are at the heart of everything we do at Xero and we have spent a long time working through this and involved a cross-section of our customers in an attempt to find the best outcome. Unfortunately, as much as it pains us, the best outcome for most doesn’t always work for every single person. As a Xero customer you will know that we are constantly improving our services and actively deliver on feature and function requests from our customers. Whilst in this instance this may not be the best outcome for you, we hope that the overall value of being a Xero user and customer will outweigh the nominal impact. I am happy to chat on this in person if you want to email me your details megan.firkin@xero.com

Sick of Uninformed People
March 3, 2016 at 11.52 pm

Wow, some of the ignorant comments above are amazing. I’ve seriously lost count of the number of uninformed whingers above that state something along the lines of “nothing added new” with the increase in price.

Do you guys even use Xero, or are you employees of a competitor product?

Let’s see just off the top of my head, in the past 2 years, at the $50 price point you have gotten;
– Auto email followups. Get your cashflow moving. Hugely useful
– Purchase orders
– Quotes
– Online files (yes this was not there 2 years today)
– Tracked inventory! Again, not there 2 years ago
– Payroll auto-journals (ok this just makes your bookkeepers life easier perhaps, but still)
– Final pay option calculation on payroll
– Attach files to the email you send your invoices to customers. How awesome is that?

Those are just major feature updates without me thinking harder. All for the same price as 2 years ago.

Nuff said, get a life.

Matthew
March 4, 2016 at 9.51 am

While all these features sound great, you’ve just alienated the entire hospitality industry.

As an industry where 90% of the employees are employed on a casual basis, the overwhelming majority of these features you’re now charging a substantial premium for are completely useless. Those that are of some benefit like the automatic super have proved to be nothing but buggy in my 6 months of using the software.

As the owner of a small cafe you’ve just increased my monthly cost by $20 for zero benefit. In an industry where margins are right, that makes it a pretty easy cost benefit analysis for me. I do hope you will realise how I’ll informed this decision is and reverse it before it’s too late. In the mean time I will be looking elsewhere for a new software provider.

Marina Holmes in reply to Matthew Xero
March 4, 2016 at 11.11 am

@Matthew, Really sorry you feel this way. We haven’t had a price change since 2013 and in that time have invested over $100 million into the platform and made hundreds of updates to the software (over 500 last year alone). While it is an increase for some users, we hope that most will see the value added by the extra features of the new ‘Premium 5 brand’, as well as the ongoing experience and service we continue to invest in (including free training, bank feeds and unlimited support – which some competitors charge for). While we certainly don’t want to lose customers over this, we can of course appreciate that some prefer a lower cost option and the trade-offs that brings.

Matt in reply to Marina Holmes
March 15, 2016 at 2.10 pm

@Marina Holmes Thank you for the response. While I understand and appreciate that you are investing heavily in your business, the new pricing model slugs the wrong end of the market. Your system is widely used by my colleagues in the hospitality sector where the overwhelming majority of these additional features added are not used (especially when it comes to invoicing and payroll). I’d prefer to see you charge additional for premium add ons on a user pays basis rather than slugging everyone a higher price for a system we are barely using 50% of.

Megan Firkin in reply to Matt Xero
March 24, 2016 at 2.35 pm

@Matt, Marina is away at the moment so I thought I would reply on her behalf. I will make sure I pass on your feedback but I really encourage you to take a look at all of our offerings and the free training we offer to ensure you are getting the most out of your subscription. We work with a huge variety of business types (including hospitality) to ensure that our plans deliver measureable benefits and value. Maybe there is a better plan or some features you are not aware of? Warm regards, Megan

Sick of Uninformed People
March 4, 2016 at 1.59 pm

@matthew I don’t know what you’re doing wrong champ. Automatic super nothing but buggy? I think you’re joking yeah? We help over 300 clients with their accounts. We’ve been using auto super for all of them for over 18 months. That’s literally over 1200 submissions a year, to over 20,000 employees a year. Wanna know how many “bugs” there have been in all of that? Less than 10.

While I understand any increase to expenses is a bad thing, if an extra $240/year ($20/month) is going to break your business, dude, you’ve got bigger problems. Hopefully if you’re using Xero correctly you might be able to identify why your business is so close to a knife’s edge. Changing software providors will not bring your business back from the brink.

Matt
March 15, 2016 at 2.05 pm

@Sick of uniformed people – What a stupid comment! If I allowed every one of my suppliers to increase their bills by 10% for zero added benefit to me and didn’t question it i’d be a fool and wouldn’t still be in business.

And thank you for sharing you wonderful experience with auto super. Knowing that you have 300 clients has totally solved all my issues.

Dominic McGlinn
March 4, 2016 at 11.11 am

Haters gunna hate. I’m a very small single owner business who pays $50 a month and Xero is a massive cost to me….but it’s a fantastic product that saves me time and effort and is more than worth it. Thanks for a great product

Marina Holmes in reply to Dominic McGlinn Xero
March 4, 2016 at 11.16 am

@Dominic We appreciate your support. Decisions like this are never easy to make as we appreciate there is an impact on our partners and customers when we change our prices, but we’re listening to all feedback and taking it on board.

Sara Rumble
March 4, 2016 at 12.49 pm

XERO standard subscription being limited to one employee is unreasonable. Please reconsider to allow at least allow two employees so it does not affect the small Mum and Dad business’s. Allowing two employees would certainly assist advisors who now have to contact the Mum and Business’s and try to convince them to stay with Xero or organise another software system 🙁

Megan Firkin in reply to Sara Rumble Xero
March 4, 2016 at 2.08 pm

@Sara, thanks for your feedback and suggestion, I will make sure it is passed to the right people.

Confused Escape
March 4, 2016 at 1.22 pm

I am confused as to why the Standard plan would have payroll for 1 employee, yet not be set up for Superstream? I may be wrong, but I thought Superstream was compulsory from 1/7/16.
Why have a payroll option that does not meet national requirements? Please help me if I am missing something.

We are a company with a turnover in excess of the limit that allows us to use a Super Clearing House, but we only have 1 employee on payroll. We now have to upgrade just for the sake of using Superstream for 1 person!!!
Thanks

Megan Firkin in reply to Confused Escape Xero
March 4, 2016 at 3.27 pm

@Confused, Superstream is mandatory for Small business. To be compliant with Superstream you have the choice of using our payroll service with the ATO Clearinghouse or, using our payroll service with our integrated automatic superannuation service – which as you have highlighted, is currently only available on our Premium 5 (available from 2nd June), Premium 10, 20 50 and 100 plans.

Confused Escape in reply to Megan Firkin
March 7, 2016 at 11.24 am

So a small business is defined by the number of employees on it’s payroll? We are not a ‘small business’, so cannot use the clearing house, yet with only 1 employee we have to pay a premium rate for your Superstream service. Talk about cashing in on new regulations.

Megan Firkin in reply to Confused Escape Xero
March 9, 2016 at 1.24 pm

@Confused Escape, no, small business is not defined by the number of employee’s on its payroll. Simply, there are costs associated with providing auto super and including it in the Standard plan would result in an increased price, whereas our analysis and customer discussions have indicated that the large majority of customers with 1 payroll employee would rather use the clearing house than pay more to access auto super. I hope this has clarified things, however you are welcome to contact me direct should you have more questions megan.firkin@xero.com

Heather Smith
March 4, 2016 at 6.31 pm

I have no idea how much it costs Xero to run each package – but I wonder could Xero consider increasing the invoice/bill and transaction limits of the STARTER package. If you were able to quadruple them it may make the $25 package more attractive to people. The cashbooks solution is considerably cheaper and has unlimited transactions (but no invoicing / billing capability). For readers here is an overview of the cashbooks version: https://www.youtube.com/watch?v=y7pZI7jBTxA may be a work around for you.
If I have a Mum&Dad business paying the same amount each month, might be tempted to do it in a spreadsheet , and just add it in July, upgrade process payroll, and then downgrade a month later…if the price was stressing that could be done – but personally I would prefer to just pay the extra – but it is a work around.

Megan Firkin in reply to Heather Smith Xero
March 5, 2016 at 9.52 am

@Heather, there has been some discussion about increasing the limits for Starter in Xero Community, you can add your vote at the following link https://community.xero.com/business/discussion/131381. Also, as you have noted in your video clip, Cashbooks are only available through Accountants and Bookkeepers as they are designed to help clients to manage their cash while their Business Advisors manages their books – using the same data anytime, anywhere.

Corinne
March 5, 2016 at 1.58 pm

Extremely disappointing to see that Xero has not learned from the first time they tried to introduce this kind of pricing back in 2013. You’re receiving the exact same comments that you did then, so why would you try and re-introduce it again now and show that you just aren’t listening to your customers? Yes, you have introduced a lot of new features since 2013 but you are still behind in a lot of features compared to other accounting software. The addition of the auto super at the $60 price point doesn’t justify the price hike to pay one or two extra employees at all as the time savings compared to lodging through Quick Super really aren’t there. And the suggestion above that those small businesses with casual employees just change their subscription on a regular basis to suit the number of employees they may need to pay within that month is just ludicrous. Small businesses like the security of set expenses and while a $10 a month increase may seem tiny to Xero, it could break a small business, especially one who’s trying to grow. Alienating a vast majority of your customers and then dismissing their concerns by rolling out a list of the features that you think justify the price increase is not the way to do business. The fact is, if your customers felt that all these extra features justified the price increase and were of a benefit to their business, you wouldn’t be receiving the number of complaints that you are.

Trent Innes in reply to Corinne Xero
March 8, 2016 at 4.31 pm

@Corinne, we understand that price increases can be difficult for small businesses and as such we deliberated long and hard before introducing them. We had not made any changes since 2013. Since that time we have added a great deal of capability into the product including auto super which has a substantial development and cost to serve. Xero is about automating and making tasks quicker for small business and we believe auto super and many other features we have introduced show this.

Eberhard Rabich
March 5, 2016 at 6.34 pm

I’m currently right at the “Premium 5” threshold of 5 employees, but 4 of those are casuals with only 2 of those working on a regular basis. So I have 2 that may only have less than a handful of pays over an entire financial year.

What does that limit of 5 mean in practical terms? Am I only allowed up to 5 employees “per pay run” or is the limit based on 5 x active/ current employees? I’m not likely to have more than 5 employees per pay run, but if it’s the latter then taking on just 1 additional employee before the end of the financial year will take me over the threshold onto “Premium 10”.

If I don’t have any new employees before end June, then once group certificates are issued I could do an unofficial purge and “terminate” the inactive employees until I needed them again for a pay run later that financial year. The advantage in that is that I start the next financial year with a clean slate again.

Megan Firkin in reply to Eberhard Rabich Xero
March 6, 2016 at 6.44 pm

@Eberhard, Premium 5 should be fine, you can have unlimited individual employees set up and active as long as you don’t try and pay more than 5 individual employees in a month. I hope that helps 🙂

Eberhard Rabich in reply to Megan Firkin
March 7, 2016 at 8.47 pm

Thanks for clarifying.

Richard McLean
March 6, 2016 at 10.13 am

Have to say cloud apps are generally under priced in the market and the amount of value the Xero team have added to their app since the last price rise clearly justifies the rise in monthly subscription costs.

Megan Firkin in reply to Richard McLean Xero
March 6, 2016 at 6.45 pm

Thanks for your feedback Richard 🙂

Jeanette Price
March 7, 2016 at 1.12 pm

I’m a bit disappointed that the rate has gone up. At present I have a restaurant client that employs people purely on a casual basis so they have rotations that sometimes meant 12-15 people might work in a week. The only thing they are gaining from the extra charge is a payroll that allows for 20. I don’t think you can put a SME in the same category as a larger business based purely on the size of their payroll as some very small businesses are service orientated and labour intensive but don’t make huge turnovers based on the size of the labour force. I feel that XERO really need to look at business requirements on all levels. Payroll is a large part of it but it would make sense to break it up from an inventory/payroll/purchases and sales ledger perspective. We went with Xero as we felt it offered a simplistic and easy to use option but it seems to be turning into a far more expensive one in the long term.

Marina Holmes in reply to Jeanette Price Xero
March 8, 2016 at 2.30 pm

@Jeanette We appreciate that price increases are tough on small business, however like all businesses, we want to deliver value to our customers and this means continuous investment into our products and services. We have analysed the software market very carefully and are confident that our pricing fairly reflects the superior value and experience Xero customers look for. That being said, we’re listening to all feedback and happy to discuss. Feel free to email myself (marina.holmes@xero.com) or our MD Trent trent.innes@xero.com on this. Thanks for taking the time to comment.

Ken Bailey
March 8, 2016 at 1.54 pm

Love Xero and recommend it to as many of my clients who will listen to me. I fully appreciate the ongoing development that has occurred, but one of the major issues that I have the significantly higher fees compared with MYOB Essentials, and I know that Xero is a far superior product.
I really can’t see that processing payroll for 2 employees is any more costly than doing it for 20 employees. This also applies to the invoicing and bank transaction limitations on the Starter version.
I also have problems with getting news of the price changes from the Fin Review. Surely this could have been sent out by e-mail, to save us the time consuming method of checking blogs, etc.

Marina Holmes in reply to Ken Bailey Xero
March 8, 2016 at 2.13 pm

@Ken We sent out email communications to all our customers and partners on the 3rd March. Have you unsubscribed to our emails? If not, please email me at marina.holmes@xero.com and I’ll look into it for you. Thanks

Jason
March 8, 2016 at 9.22 pm

Will the discount for multiple organisation accounts still apply?

Trent Innes in reply to Jason Xero
March 8, 2016 at 10.52 pm

@jason yes this still exists.

In Limbo
March 11, 2016 at 1.23 pm

Hi everyone,
I have to say price increases certainly aren’t limited to Xero, I’m looking to transition from MYOB to Xero as I’ve been quite unsatisfied for years but have been a bit scared to take the leap. The sealer has been they have now increased my subscription from $56 to $77 per month. When I queried the rate rise I was told I was on a special price until now so I should be happy or otherwise look at their basic range.

Thomas
March 11, 2016 at 4.51 pm

Hi there, we have 5 employees (mostly part-timers) and i’m on the standard plan which will move to $60 from $50. That seems fair to me given the value i’ll be getting with the auto-super.

However, i’m curious – i want to move to the premium 5 plan now as i want to include auto super from March – it looks my only option is to move to the premium 10, which will go up to $70 (rather than the $60 i should be paying) and then i’ll have to manually reduce my plan back down to the premium 5? Seems the only way i can avoid that is by not doing a pay run in May according to the blog? But that seems absurd – how can i just suddenly stop doing pay runs for a whole month? Perhaps i’m misunderstanding though – so please any clarity you can provide would be much appreciated.

As an aside, I have to say that i totally agree with folk here that Xero is shooting itself in the foot with businesses of 2-3 employees – i’ve sung your praises and advocated Xero to many people that have subsequently converted. Now i will stop doing that – you’ve made a MASSIVE change – why oh why would you cut the number supported from 5 down to 1 instead of say 2 or 3?? Not a slight reduction – a total axing of the service to basically only cover sole traders. I’ve lost all confidence in the motivation behind Xero so will absolutely not be recommending you to small business buddies (but i would certainly continue recommending you to bigger businesses)- ultimately what’s to stop you making another massive change in functionality available at the new $50 level and forcing more tiny businesses on to a bigger plan? Shame on you – you know that for most of those businesses, many of those second or third employees will be part-timers only – and for those folk, Xero’s payroll adds very little marginal value per extra part-timer added. So the price change is absolutely NOT a reflection of the value your product offers to those businesses.

It seems shortsighted – if you help small businesses grow, in due course you’ll make more money out of them and they’ll be happy to pay you proportionately much more (as our business is about to).

Hope you’ll reconsider, know you won’t!

Megan Firkin in reply to Thomas Xero
March 24, 2016 at 2.29 pm

@Thomas, Premium 10 won’t go up to $70 until we launch Premium 5, so you could subscribe to Premium 10 now for $60 and when Premium 5 goes live, simply downgrade. Alternatively, if you are happy to move to Premium 5, you can still do pay runs for more than 1 employee in May and you will be automatically migrated to Premium 5 when it goes live. We are only recommending that Standard customers don’t do pay runs for more than 1 employee in May if they don’t want to be migrated to Premium 5. If this still isn’t clear you can email me on megan.firkin@xero.com. As you have read the other comments I won’t repeat the explanations but rest assured that I will absolutely pass on your feedback. Warm regards, Megan

C Hamilton
March 15, 2016 at 3.04 pm

Hello,
I have recently joined Xero from a MYOB program. We are also a small business with 2 entities with 2 staff. because of the changes and the restrictions of transactions, I have to subscribe to two Xero’s that will cost me $120.00 per month with no additional benefits. (Super for 2 employees does not make me jump for joy over your changes.) I am thinking that buying a program(like the old way) and updating it every 5 years or so is far more cost effective. perhaps I need to consider returning to my old myob program? Between the tutorials for Xero, My accountant and now increased Xero fees, I’ve never been paying so much! Ridiculous!

Megan Firkin in reply to C Hamilton Xero
March 24, 2016 at 4.29 pm

@Bella, whilst I can appreciate your position re: auto super for two employee’s, I would encourage you to look at all the enhancements delivered – 500 in the last year alone and over $100m of investment over the last two years. Delivering real time savings to our services is a key development requirement, so I encourage you to take advantage of the free education we offer to ensure you are getting the most out of your subscription, as time savings equal cost savings.

Heather Smith
March 16, 2016 at 5.50 pm

How will this play out on the 2nd of June. As a Xero Advisor who on sells subscriptions am I going to need to stay next to the Xero dashboard to approve packages moving from Standard to Premium 5 (which I predict will be the biggest change) – or will it automatically happen?

Megan Firkin in reply to Heather Smith Xero
March 24, 2016 at 3.28 pm

@Heather, hopefully you saw the link to the template letter for you to edit and send to your clients explaining the changes. In response to your question, if any of your clients ran pay runs in May for more than 1 employee, then they will be automatically migrated to Premium 5 when it goes live and those clients who only pay one employee or who are not currently using payroll will remain on Standard. I hope this helps, any other questions please don’t hesitate to make contact megan.firkin@xero.com

warren
March 21, 2016 at 11.57 am

I was intending to move to Xero, but after reading all the negative comments, I will look at other options that maybe more suitable.

Megan Firkin in reply to warren Xero
March 24, 2016 at 4.08 pm

@Warren, sorry to hear this, we have over 250,000 customers and whilst we take the feedback of every customer seriously (that’s not marketing fluff, it’s true and is one of the reasons why I joined Xero), we reluctantly accept that we can’t find the perfect solution for everyone. Maybe try us out and see where things go?

Donald
March 23, 2016 at 4.41 pm

Thanks for the update.

You’ll find that you could have 100 times the amount of people in the starter plans vs the standard plan. And while it might take 2 to 1 to have the same amount of income for Xero I really believe that you would have 6 to 8 times more Subs in the Starter pack vs 1 in the standard pack alone. Making it upto $200 Subs in starter vs $50 for 1 standard sub.

Because people cannot reason with $25 more for unlimited reconciliations and invoices. It does not cost you anything for those to be done. At least 10 to 20 more reconciliations and 5 to 10 more invoices and you would have people coming in droves back to you.

But its gonna cost you subscriptions. Like mine. I hate that I have to move from Xero.

So I’ll be moving off to a different online accounting package and I’m sure as more people read this they too will be moving away from Xero. Which is sad as I like Xero far better than MYOB. But for $4 more MYOB lets me have unlimited reconciliations.

Foolish.

Megan Firkin in reply to Donald Xero
March 24, 2016 at 4.19 pm

@Donald, really hate reading this, the last thing we want to do is lose good customers. Not sure if you have seen this but there is a discussion on the topic of greater transaction numbers for Starter in Xero Community, you can add your vote at the following link https://community.xero.com/business/discussion/131381 I really hope you change your mind, but I wish you well with whatever you choose. Warm regards, Megan

Donald
March 23, 2016 at 5.24 pm

I just talked to MYBO. For their base online package. 400 reconciliations. Lots of invoices as well.

Put your price up by $5 give more reconciliations and more invoices and people would choose you. People understand the cost of living goes up, that’s why they put their prices up.

Megan Firkin in reply to Donald Xero
March 24, 2016 at 4.22 pm

@Donald, whilst we hate increasing prices, we are confident that the pricing we set fairly represents the value of our service, however we accept that some prefer a cheaper solution and the trade-offs.

Donald in reply to Megan Firkin
March 26, 2016 at 9.33 pm

Hey Megan. I’m not looking for a cheaper Solution, MYOB is currently $4 more expensive for a similar package to the starter pack of Xero. They said on the phone to me that they will be putting it up this year by $6 so that means its $10 more than Xero. But their Invoice allotment and their reconciliations leave the xero starter pack for dead. 400 reconciliations a month, unlimited invoices and bills a month.

I don’t want to leave. I really really don’t. Charge us $5 more a month, give us 40 Reconciliations and 10 invoices and 10 bills a month and I can guarantee people will stay and return and join in even more numbers.

As to that link the votes sadly don’t matter cause the reply post by the team clearly says its not going to be changed.

So sadly this post to you doesn’t matter either. I am not trying to make you mad or annoyed or anything, just sad that the higher ups don’t really care and aren’t willing to listen.

Megan Firkin in reply to Donald Xero
March 28, 2016 at 8.17 am

@Donald, your post absolutely matters (I’m really sorry if my responses didn’t convey that), I caught up with the team regarding the response at the link I sent to you and they have confirmed that there are no plans to change the current limits as there are not enough votes for it … I would love to know whether you voted or were put off by post on the page. In meantime, I can assure you that I am compiling a summary of all the feedback for the leadership team so it will definitely get to the right people. Warm regards, Megan

Donald in reply to Megan Firkin
March 28, 2016 at 5.08 pm

I did Vote.

But I almost didn’t cause I saw the post by tokes saying it wouldn’t be changed. And even after they modified the post I may not have voted.

And I think lots of people don’t even know that page is there.

I believe (and in an email reply to Trent I suggested the following) Send an email out to all your current Starter and Standard plan people. Have a link to a survey page (do the same on your website) that asks a simple question. Would you pay $5 more for 40 Reconciliations and 10 Invoices/Bills per month. Yes or No.

My answer by the way is yes.

Then take that to the higher ups. I truly believe people would say yes and I believe you would get more people signing up.

As I said to Trent in the email. MYOB charge $10 more for 400 Reconciliations and unlimited Invoices/Bills. You should at least make it so your basic pack is competitive and at least 1.5 reconciliations a day, not 0.75 per day (roughly), I don’t want to go back to them. I don’t, but by the end of April the heads of your company can’t see reason I will be off.

Megan Firkin in reply to Donald Xero
March 28, 2016 at 8.32 pm

@Donald, thanks for your reply to my question and great to hear you are in direct contact with Trent. Warm regards, Megan

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