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Australia adjusts pricing on premium plans, expands payroll for standard

Posted 4 years ago in Advisors by Trent Innes
Posted by Trent Innes

Update to blog, 24 July 2018 – Classic expense claims is staying

On 10 July 2018, we advised that the classic expense claims function would be retired on 31 January 2019.

We’ve listened closely and taken on your feedback, and we’re pleased to announce that we’re now going to keep classic expense claims running as well as roll out the new Xero Expenses function.

If you were using classic expense claims within the six months prior to 10 July 2018, you can continue using it for the foreseeable future. You’ll also be able to try out Xero Expenses for free until 28 September 2018.

We’ve made some small edits to the blog below to reflect this change.

The Xero community has spoken, and we’d like to thank everyone for telling us what you think. We’re sorry to have misread the impact that retiring expense claims would have on some customers.

At Xero, our teams work hard to deliver tools for your success. We’ve made continual improvements to features such as reporting, payroll and the mobile app. And for three years running, small businesses have named Xero the most-loved accounting platform and the best value for money in Canstar Blue’s annual survey.

Since early 2016, we’ve devoted almost $250 million to research and development including new regulatory compliance such as Single Touch Payroll. We don’t adjust prices often, but we do revisit them from time to time to ensure they’re aligned with the value we’re delivering.

Starting 28 September 2018, we’ll be changing prices to reflect the improvements in Xero and the cost of serving larger subscribers on a per-employee basis.

Most subscribers will see no change in price. Many will find their plan has extra features at no added expense. And we’ve held the line on prices for standard, starter and partner plans.

For the smaller employers, there’s some good news. The standard plan now covers payroll for two employees instead of one, at no extra expense. As small businesses add their first employees, they can be even more confident of keeping costs down.  

Our premium plans will see the biggest change in price. This reflects a rising cost to serve larger employers on a per-employee basis. We believe our pricing remains reasonable in this market.

Payroll continues to be one of the strongest draws for employers on Xero. We’ve enhanced it by adding employment termination payments, the ability to deactivate unused pay items and to support working-holiday employees. We’ve also enhanced the opt-in process for auto-super and now offer super reports with proof of payments.

Expenses reimagined

We also have some exciting news about one of our earliest features, expense claims, which we’ve rebuilt from the ground up. Today we’re announcing the launch of the all new Xero Expenses.

You can auto-capture receipts and submit expense claims on mobile devices, link billable expenses to Xero projects, and update reports. New permission settings allow control over who views, approves and pays claims. Best of all, Xero Expenses provides real-time insight into who’s spending, how much, and on what.

Xero Expenses will be available to existing organisations for free from 10 July through 28 September 2018. After that, it will be available for $5 a month for one user and $5 for every active user after that. Be sure to have a look at it over the next three months.

At Xero, we love small businesses and our accounting and bookkeeping partners. When they succeed, so do we. Here is a timeline showing some of the features and improvements we’ve delivered over the past two years.

Thanks for choosing Xero.

FAQS

When will I see the changes on my invoice from Xero?

The price changes take effect for existing and new plans from 28 September 2018 and will show on invoices from this date onwards. Invoices will likely have two lines: the period up to the price change, and the period after the change.

When do the changes come into effect?

The new pricing comes into effect 28 September 2018.

I have a discount or promo code from Xero. Will it be honoured?

If Xero has provided a current discount or promo code, it will continue to be applied to the new pricing from 28 September 2018 until the code expires.

Q: How do I get started with the new Xero Expenses?

From 10 July 2018, under the Accounts tab in your Xero account, you’ll see a new option labelled Expenses. The first time you click on this, you’ll receive an introduction message and be guided through a quick three-step set-up process, including:

  1. Selecting your Xero Expenses users.
  2. Selecting the account codes you want to be able to match expenses claims to.
  3. Accepting authorisation of receipt scanning on your behalf.

186 comments

Dan Fairbairn
July 10, 2018 at 10.50 am

I’m a little confused. You mentioned “Most subscribers will see no change in price.” however I wouldn’t expect most subscribers to only have a single payroll employee.

But then further down…

“Many will find their plan has extra features at no added expense. And we’ve held the line on prices for standard, starter and partner plans.” – what is the ‘partner’ plan this refers to? Does this mean that if subscribed through a partner, your price won’t change – or something else? I can’t see any explanation of this term elsewhere.

Demian Mclean in reply to Dan Fairbairn
July 10, 2018 at 11.14 am

Hi, Dan. When we say most subscribers will see no change in price, we’re referring to subscribers across all Xero plans. That includes partner plans, which are offered to subscribers through our accounting and bookkeeping partners and are unchanged in price.

Carl B in reply to Demian Mclean
July 10, 2018 at 2.20 pm

Wow, pricing going up 50%. We will be looking elsewhere moving forward.

Demian Mclean in reply to Carl B
July 10, 2018 at 5.46 pm

Hi, Carl. Thanks for writing in. Like all businesses, Xero reviews its pricing from time to time. We believe the new prices reflect the improved value we’re offering, but we know you have a choice. We hope you’ll remain a Xero customer.

Dan Fairbairn in reply to Demian Mclean
July 11, 2018 at 3.16 pm

Gotcha ok thanks, spoke to our AM today as well which all makes sense now, thanks for the quick clarification! 🙂

Andrew C
July 10, 2018 at 11.44 am

Is this an annual event now? Getting too expensive ….Upset with the way Xero have consistantly increased prices & reduced the client discounts from 15% to 5% in the past 12 months. Forced to look at alternative software now.
Disappointing to say the least.

Demian Mclean in reply to Andrew C
July 10, 2018 at 12.09 pm

Thanks for the feedback, Andrew. Like all businesses, Xero reviews its pricing from time to time. Our last adjustment was over two years ago. We’re updating our prices to reflect the improved value we’re delivering. We hope you’ll stay with us.

Alan G
July 10, 2018 at 12.59 pm

We are in a remote regional area and its always a juggling act to get Clients on board with Xero and at the same time maintain reasonable fees for work.

Most Clients we have will move to $65 pm, so $780 pa, an 8% + rise. With our fee on top we are finding clients are becoming increasingly hesitant.

Weather events, disease, low commodity prices, farms being shut down, these are all having an effect on this area and every time we need to add a cost it has an effect. We either pass it on or wear it and we wore the last increase but won’t be able to do that this time.

The promise of Xero was an inexpensive cloud based system to automate and take the hack work out of compliance. Yes its delivered to date but selling the benefits of add on’s beyond that may work in CBD markets or near regional markets but in remote locations its not an up sell that many are looking for.

Having said that we continue to promote it and try. It was also the little firms who backed Xero at the start but its the little guys who feel the impact of these rises the most.

C’est la vie

Trent Innes in reply to Alan G
July 10, 2018 at 2.18 pm

Hi, Alan, it’s Trent here. Thanks for your support and feedback. We don’t take these decisions lightly but like any business, we do need to revisit our pricing from time to time. Regional Australia is something I am personally very passionate about and want to do more to support this very important part of the market.

Alan G in reply to Trent Innes
July 10, 2018 at 3.42 pm

Hi Trent, the decision to raise prices would be simply a numbers game for Xero now. Its a large Corporate and has shareholder demands, I don’t think anything other than, lets see how we can get it up to a profit margin that works for fund managers.

Yep everyone is passionate about Regional Australia, makes no difference, unless there is something to dig up its not a priority. eg Cyclone Yasi in FNQ was in 2012 and yet virtually all the Tourism assets lost are still not restored. Take a look at a drought map at the moment too, from WA to NSW, VIC and QLD regional’s are doing it tough. Funny how we can find $50 Billion Dollars for a bunch of never tested submarines and yet we can’t outlay enough to fix broken Tourist Assets or Support Regional Towns with solutions that retain jobs.

I also don’t see large Corporates like Xero setting up in Regional area’s anytime soon either.

Kristine Ramsdell-Coleman
July 10, 2018 at 12.22 pm

Can we choose not to have the feature?

Demian Mclean in reply to Kristine Ramsdell-Coleman
July 10, 2018 at 12.25 pm

Hi, Kristine. Which feature are you referring to?

Andrew C
July 10, 2018 at 12.25 pm

Hurting the Customers that helped build XERO from inception! Not buying the corporate greed Demian.
Understand prices go up occasionally but dont change the game for the original practitioners that recruited your customers.
Question – where did the missing 10% discount (taken away from practitioners) go? Xero took it all back with a click of the button! We recruited the customers, Xero changed the rules overnight, Xero banked the extra 10% discounts. Disgrace!

The new MYOB product is much better value for money now.

Demian Mclean in reply to Andrew C
July 10, 2018 at 1.14 pm

Hi, Andrew. Based on your comment, it looks like you’re a Xero partner. I recommend you call your Account Manager to discuss whether there are ways to get more out of our partner program. If you’re not sure who your account manager is, please shoot an email to support@xero.com and they’ll help you out.

Shane G
July 10, 2018 at 1.04 pm

Please clarify the new expenses outrageous charges. $5 per month for one user, then $5 per month for each active user. So if I am an employer with 10 employees. 5 of which register for the new expenses feature, of which 2 submitted expense claims in July, 3 did not make any claims in July . Of the two that did submit a claim, one employee was for a $2.00 parking meter fee. What will I be charged by Xero in July for this expenses feature? Please justify if $5 is charged for the employee to claim $2 parking meter fee, how this is justified and reasonable in your view. Also please confirm if I am Premium 20 customer, and all my employees are active expense claimers, then my fees will increase per month from current $80/mth to $180/mth..that would be a 225% increase in fees (revenue to Xero), for nothing much more than a fancy new app (despite the marketing rhetoric the features are not that more ‘useful’ than what we currently have and lets not confuse ‘fancy’ with ‘useful’). We demand the choice of keeping the current ‘classic’ expense feature unless we ‘choose’ to use the new one and ‘choose; to take an example 225% hit in increased fees !!

Demian Mclean in reply to Shane G
July 10, 2018 at 1.41 pm

Hi, Shane. The new Expenses has many more functions than the original expense claims feature — see full details here. We’re always analysing the market, and we worked closely with businesses, accountants and bookkeepers on Expenses. We’re confident the pricing fairly reflects the unique value it offers. For questions about pricing in the scenarios you outlined, can I suggest you visit this Help Centre page? If you still have questions, please use the Get in Touch button at the bottom of that page and we’ll be sure you get the answers you need.

Colleen in reply to Demian Mclean
July 10, 2018 at 2.37 pm

Hi Damien

I am a long time Xero Partner and love showing my clients how Xero can change their business lives. I’ve been trialling the new Expense Claim feature with many of my clients to great success. But I agree with the comments above. How can I possibly convince my clients to add 50-70% a month to their Xero subs to cover the occasional low value expense claims their staff want to be reimbursed for. Worst still how do I go back to them and say we’re reverting to a totally manual system of handling these claims to avoid the extraordinary price increase.
Just a question too. As an ‘approver’ on these expense claims and therefore an Expense Claim user will my clients have to pay $5 a month just so I can pay those same low value expense claims?
If this is the path that Xero is committed to can I appeal to you to leave the old expense claim module in Xero. It was clunky and was painful for advisors to use but it was free!

Jeremy Sutton in reply to Colleen
July 10, 2018 at 5.45 pm

Hi Colleen. Thank you for you feedback. I will be passing this on for consideration.

Paula
July 10, 2018 at 1.17 pm

Hello, will this change have any effect on the Cashbook in Xero or Cashbook with GST in Xero?

Jeremy Sutton in reply to Paula
July 10, 2018 at 1.59 pm

Hi Paula, there are no changes to the partner editions, including cashbooks.

Paula in reply to Jeremy Sutton
July 10, 2018 at 5.26 pm

Thank you.

John
July 10, 2018 at 1.20 pm

Isn’t ‘continual development’ and ‘research and development’ part of what subscribing to a SAAS application pays for, as opposed to the old model of paying once for an application and using that same version for years until you pay for an upgrade to access new features? New features aren’t a unique benefit of using Xero or something it does exclusively over other cloud providers. Development is an inherent assumption of the model. Xero seems to want to have its cake and eat it too. Pay a monthly subscription, and then pay again to cover the cost of developing new features.

Demian Mclean in reply to John
July 10, 2018 at 2.20 pm

Hi, John. Thanks for your feedback. Like all businesses, including SaaS ones, Xero reviews its pricing from time to time. Our last adjustment was over two years ago. We’re updating our prices to reflect the improved value we’re delivering and the rising cost to serve larger businesses on a per-employee basis. Since our last price change, we’ve invested $250 million into R&D, resulting in hundreds of improvements and regulatory compliance solutions such as Single Touch Payroll.

Fran
July 10, 2018 at 1.21 pm

I believe STP hasn’t been rolled out yet to all business’ who were to commence reporting from 1/7/18, lets forget the deferral you organised, this just tells me Xero weren’t prepared – it also means you are charging us for a feature that we are forced to use but Xero have not yet released it.

Demian Mclean in reply to Fran
July 10, 2018 at 2.41 pm

Hi, Fran. Our STP solution is immediately available to businesses that joined Xero from 1 July and have 20 or more employees. A number of businesses are already successfully filing STP on Xero. To ensure a smooth transition, Xero has an ATO deferral in place for pre-existing customers. Businesses with Xero before 1 July that have to use STP will be enabled from September. Please note the pricing changes announced today don’t take effect until 28 September.

Fran Naccarella in reply to Demian Mclean
July 11, 2018 at 1.15 pm

I understand what was written in the press release, my issue is for those business’ that have been with Xero for many years that are being deferred at best to September, instead of looking after those business first, why?
What happens to those business that have 30 employees and are now seeing their plan costs go from $90 to $125, that is quite a jump @ an increase of $35/month and possibly not having access to STP until after the new price comes in.
As well as having to factor another $5/month per user for Xero Expenses,
It is disappointing.
Can you confirm whether an approver is an active user?

Demian Mclean in reply to Fran Naccarella
July 11, 2018 at 4.09 pm

Hi, Fran. Thanks for writing back. The per-user cost for Expenses is an issue that’s come up in other comments on this blog. I’ll add your voice to feedback that we’re relaying to our Expenses team.

An approver is not considered an active user if they only approve. We consider only the person who is being reimbursed in our calculations.

Jo Leydon
July 10, 2018 at 1.21 pm

I have to agree with the previous comments – as an accountant who has actively promoted Xero to my clients firstly I had to explain the decreased partner discount and now increased pricing per month. This is disappointing and the spin of ‘we have invested 250 million’ – guess where that 250 million came from – the current subscribers that are now going to be paying an extra fee per month. This definitely means I’ll look at other options and I’m afraid Xero may not be the go to software that I recommend.

Erin Smith in reply to Jo Leydon
July 10, 2018 at 2.32 pm

Hi Jo, thanks for getting in touch. We think it’s a fair adjustment given the hundreds of product enhancements we’ve delivered. At Xero our focus is not on price, it’s on the value we’re providing, and we hope that you’ll stay with us.

Darren Jones
July 10, 2018 at 1.39 pm

Really?? I just managed to convince a large client who has around 100 employees to swap from MYOB to Xero, even though their tax accountant wanted them to stay on MYOB. One of the conditions was that it didn’t cost more … I told them $100/mth and they were ok with this. Are you serious that it has now been increased by 50%?? Major egg on face for me … thanks!!

Jeremy Sutton in reply to Darren Jones
July 10, 2018 at 2.46 pm

Hi Darren, thanks for your feedback. The reality is there’s never a good time to adjust prices, but like any business, we need to review our pricing from time to time. Xero is always analysing the market and works closely with businesses, accountants and bookkeepers to ensure the right product mix and pricing structures. We’re confident our pricing fairly reflects the unique value and experience Xero provides.

Darren Jones in reply to Jeremy Sutton
July 13, 2018 at 11.19 am

Thanks for the scripted answer Jeremy. As many have said, there is no argument about price increases within reason … I don’t mind telling clients such as the one cited that it is going up $10/mth … a 10% increase. But 50%???

How many of us could get away with that? It is obnoxious and as a partner trying to get clients onboard to Xero I feel left out on a limb … no way I am going to try and placate clients by regurgitating the justification Xero is throwing at us. You certainly didn’t work ‘closely’ with any bookkeepers, accountants or businesses that I know of in determining a fair price increase.

Demian Mclean in reply to Darren Jones
July 13, 2018 at 4.06 pm

Thanks for getting back to us, Darren. We do appreciate your feedback. Someone from Xero will give you a call today to make sure your concerns are fully heard.

Paula
July 10, 2018 at 1.52 pm

Will this affect the Cashbook or Cashbook with GST in Xero? Sorry if this pops up twice, however I posted my comment initially but I can’t see it in the list of questions.

Demian Mclean in reply to Paula
July 10, 2018 at 2.57 pm

Hi, Paula. There’s no change to the pricing for Cashbook or Non-GST Cashbook.

Kelly B
July 10, 2018 at 1.57 pm

Hi, Can you please confirm if Auto-Super will be available in the new Standard product given that it now covers payroll for two employees? This would be very helpful.

Erin Smith in reply to Kelly B
July 10, 2018 at 4.11 pm

Hi Kelly. Thanks for writing. Auto super will not be available in the standard plan. All functionality remains the same, aside from the addition of the ability to now pay one extra employee in the standard plan.

Tom Wright
July 10, 2018 at 2.01 pm

So we’re on Premium 20 and have all users currently using the expenses feature. Our total cost is $80 per month. With the new feature, our bill will increase to:

Premium 20: $80
20 x $5 per user for Expenses: $100

Total monthly cost is now: $180

So you’re more than doubling the cost of our ENTIRE subscription for a few tiny extra features in Expenses (which we don’t need by the way, we’re happy with how it works today). And you reckon this is justified and well thought out? Can you explain the thought process to me a bit more on this because that honestly sounds full-on crazy.

I notice you’ve also increased the cost of Premium 20 by $10 so this is a MASSIVE price hike wouldn’t you say??

Demian Mclean in reply to Tom Wright
July 10, 2018 at 4.48 pm

Hi, Tom. Thanks for writing. I understand where you’re coming from regarding the cost of the new Expenses across multiple users. We analysed the software market very carefully before making today’s decision and are confident that the Expenses pricing fairly reflects the superior value and experience Xero customers look for. Can I make a suggestion that I hope doesn’t sound impertinent? Please try out Expenses for the next three months, while it’s free to existing users. It has features that many of our small-business customers have requested, and we think it’s a far superior product to the original expenses function. We’d be keen to hear what you think of it.

Michael Howden
July 10, 2018 at 2.03 pm

I just joined up a month ago after comparing Quickbooks and Xero and deciding on Xero. Pricing was of course a key consideration.

I now cop a 40%, yes 40% increase in fees less than 5 weeks in to my subscription with Xero and having just finished all the work of transferring employee data into Xero.

What an absolute stitch up. I think most reasonable people in business understand that pricing needs to rise from time to time, but 40% is excessive to say the least and shows that Xero must think it’s now in a position of market dominance, relying on it being too much work for people to change providers.

Just checked Quickbooks pricing and it now looks waaay more attractive.

Erin Smith in reply to Michael Howden
July 10, 2018 at 2.16 pm

Hi Michael, thanks for the feedback. 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. We accept that some people will have always have a preference for a lower cost solution though and the trade-off that brings.

Joe
July 10, 2018 at 2.03 pm

Hi,

Will the standard plan include multi currency? For the record, I feel that all plans should include multi currency, and this should’t be a differentiator.
Thank you

Jeremy Sutton in reply to Joe
July 10, 2018 at 2.37 pm

Hi Joe. With this change the standard plan won’t include mutli-currency. Our customers on standard plans have indicated their major concern was the limit of only being able to process payroll for one employee. Thank you for your feedback.

Aaron Griffiths
July 10, 2018 at 2.14 pm

I’m not overly concerned at the amount of the increase for my account being $10/mo.

What is pretty ordinary is the timing – 10 days into new EOFY, when you you’ve been aggresive in the lead up to June 30 (smart marketing) acquiring new customers. I’ve been a customer less than a month, and bang, a price increase.

I totally understand why, but what a fantastic way to leave a sour taste in new customers mouths.

Trent Innes in reply to Aaron Griffiths
July 10, 2018 at 2.41 pm

Hi Aaron. Thank you for your note. The reality is there’s never a good time to adjust prices – that’s why we’ve tried to give nearly three months’ notice before these changes take effect. We hope you continue to stay with us.

Coby Godwin
July 10, 2018 at 2.21 pm

As a customer who fees will increase by $1020 per year or 44% for to 2 entities, I am very annoyed to say the least. Who it today economic conditions can absorb or charge my clients 44% extra (22% increase per year). For Xero to announce this after the start of the new financial year which makes it harder to switch is very sneaky. On top of this increase, for Xero to charge extra for the new expenses feature which to me signals a move to charging for each new upgrade and the fact that xero has no phone support is pushing me back to MYOB. Can anyone give me a reason not to move back now MYOB has sorted out its cloud service.

Jeremy Sutton in reply to Coby Godwin
July 10, 2018 at 4.50 pm

Hi Coby. Thanks for your comment. Unfortunately there is never a good time to change prices. In regards for charging to new features – since the last price change two years ago Xero have invested heavily in the product and released hundreds of features. For more information on all of the releases check out our timeline: https://www.xero.com/au/about/product-releases/ For an independent comparison to our competitors (including support) we recommend checking out the following Canstar review https://www.canstarblue.com.au/stores-services/accounting-software/

Belinda
July 10, 2018 at 2.28 pm

Please confirm that the new expenses charges won’t be activated and hence charged unless we register for it? Thanks

Jeremy Sutton in reply to Belinda
July 10, 2018 at 3.51 pm

Hi Belinda. That is correct. Expenses is free for all exisiting users until 28 September. From there you will only be charged if you are actively using it.

Russ
July 10, 2018 at 2.30 pm

Thanks for the update. I’m not complaining about a $5 increase every now and then, however, I’m not seeing any great added value for my business and the one REALLY IMPORTANT feature that affects me (and I’d imagine most of your customers) is the lack of an ‘Auto-Save’ function on the invoicing page. There are threads on this subject that promise it’s coming, but in 2 years it’s not changed and I’m still taking screenshots every 5 mins before I save any invoice for fear my work will be lost. The amount of time lost and frustration caused around this seemingly simple issue makes these price increases a bit harder to swallow – I’m sure you understand.

“Over the past two years, we’ve made continual improvements to Xero, investing almost $250 million in research and development.”

Surely some of that $250 million could have gone towards rolling out Auto-Save for invoices? I have given up commenting in the support threads about this. Perhaps you could find out where this ‘development’ sits in XERO’s priorities and comment below?

Aside from this, it’s been a great product, but unfortunately this issue is something that frustrates a lot of us daily, not doing the XERO brand any favours. Here’s hoping my $5 per month goes to something that matters to me.

Erin Smith in reply to Russ
July 10, 2018 at 5.20 pm

Hi Russ. Thanks for taking the time to write in. When it comes to feature requests, we work with a broad range of customer feedback – and appreciate that means some features are prioritised over others. With regard to auto save on invoices, I encourage you continue to use the Xero Features Request Community (https://community.xero.com/business/topic/23/) and I hope you’ll find value from our upcoming releases.

Sam
July 10, 2018 at 2.31 pm

I don’t use the Xero Expenses apart from adding a receipt on my mobile device as spent money. Does this mean I don’t get charged the additional $5 ?

Demian Mclean in reply to Sam
July 10, 2018 at 4.20 pm

Hi, Sam. The launch of the new Expenses app doesn’t affect the functionality of spend-money transactions in Xero Business Edition. For more information what Expenses does add to Xero, please check out our blog page. Thanks.

Kate Tatar in reply to Demian Mclean
July 11, 2018 at 3.35 pm

Hi Demian,

But after the 31/01/2019 if I would like to submit an expense claim the classic expenses you will no longer be available
and I will have to pay the $5 per month?

Demian Mclean in reply to Kate Tatar
July 11, 2018 at 5.47 pm

Hi, Kate. That’s correct. After 31 January 2019, the original expense claims feature won’t be available to submit claims. If you choose to use the enhanced Expenses at that point, it’s $5 a month for the first user and $5 extra for each additional active user.

Ajay Gandhi
July 10, 2018 at 2.32 pm

You are getting too expensive, perhaps getting too big for your boots. Other providers also do cloud platforms etc etc also. Watch the share price of your company.
Disappointed

Erin Smith in reply to Ajay Gandhi
July 10, 2018 at 2.54 pm

Thanks for getting in touch. We commit to ongoing investment in innovation to offer continued value to small businesses, and we hope you’ll continue to stay on the journey with us.

Daniel
July 10, 2018 at 2.39 pm

Will you add multiple currencies in your standard plan?

Erin Smith in reply to Daniel
July 10, 2018 at 3.35 pm

Hi Daniel. Multi-currency will not be available in the standard plan – all functionality remains aside from the addition of the ability to now pay one extra employee in the standard plan.

Rob
July 10, 2018 at 2.43 pm

Even though this will allow us to drop down to the Standard plan (2 employees), the marketing spin about “new features” are pointless.
We’ve seriously been considering spending more and moving to MYOB as it allows us to do a simple drilldown of what a specific customer has purchased with a couple of clicks (life of the customer, not the last 10).
Instead of spending $250mil on features for the top end of town, why not as others have said, support the small businesses that build your company and implementing the features that should be STANDARD in an accounting system.

Jeremy Sutton in reply to Rob
July 10, 2018 at 3.45 pm

Hi Rob. Glad to hear you will benefit from this change by being able to drop down to the standard 2. In Xero you can run a ‘Customer invoice report’ on any date range you want, including life of customer. If you need more information on this report feel free to contact support@xero.com.

Rob in reply to Jeremy Sutton
July 10, 2018 at 4.30 pm

Thanks for the reply, however that wasn’t my point. I know it’s available as a report but this is a lot more clicks, while a customer is waiting on the phone for us to load into reports, find the customer, create a report etc. In every other Accounting software I have used, it’s a much simpler process. There are already requests for these options that have been there before we started using Xero 3 years ago, but they are “not high priority”.

You claim that you make accounting beautiful, however we have seen barely any new features that support small business. This probably isn’t the place, however it doesn’t seem to progress any features that have been voted on, except with a reply “it’s in the works”.

I hope you take these comments on board, instead of just brushing over them as there are many small businesses I know in the same position at looking at changing accounting packages.

Jeremy Sutton in reply to Rob
July 10, 2018 at 6.04 pm

Hi Rob. If you haven’t already I recommend ‘favouriting’ the report. This should reduce the number of clicks. https://central.xero.com/s/article/Access-and-browse-reports?userregion=true. Thanks for taking the time to provide us this feedback, we are definitely taking comments on board. When it comes to feature requests, we work with a broad range of customer feedback – and appreciate that means some features are prioritised over others.

Eryan Haddon
July 10, 2018 at 2.52 pm

Hi – can you please advise – will Auto Super still only be available to Premium users – or will that now be offered under Standard?

Erin Smith in reply to Eryan Haddon
July 10, 2018 at 3.41 pm

Hi Eryan. Auto super will not be available in the standard plan. It remains a feature for Premium users.

Anja Williams
July 10, 2018 at 3.07 pm

Thanks for letting us know in an e-mail and a video explaining all the details. I don’t have a problem with the prices going up, Xero has improved the software continually. My clients pay all their own subscriptions and the amount of money I have saved them by using Xero has well offset any increases they will be paying. I wouldn’t even think about using any other software. So I’m a bit surprised by all the comments above.

Neil Hudson
July 10, 2018 at 3.26 pm

My price is going from $90 to $125 per month! Xero has lost touch with CPI and has become very expensive for a small business.

Last time I recommend Xero to anyone.

Demian Mclean in reply to Neil Hudson
July 10, 2018 at 4.58 pm

Hi, Neil. Thanks for the feedback. We’re updating our prices to reflect the improved value we’re delivering and the rising cost to serve larger businesses on a per-employee basis. Since our last price change, we have invested $250 million into R&D, resulting in hundreds of improvements and regulatory compliance solutions such as Single Touch Payroll. We believe our pricing remains reasonable in this market. We know you have a choice, and we hope you’ll remain a Xero customer.

E Bell
July 10, 2018 at 3.32 pm

My plan will go up $5, OK. As I understand it, after January it will increase another $20 to $85, with four employees claiming expenses. We don’t want the new Xero Expense add on. We are a small, family business that is happy with the status quo. The current expense system is one of the reasons we changed to Xero. We will seriously consider reverting to MYOB unless you allow existing customers to keep their existing expense claims system. I have been a big proponent of Xero to other businesses, I can’t, in good conscience, continue when you propagate price increases by stealth.

Jeremy Sutton in reply to E Bell
July 10, 2018 at 4.04 pm

Thanks for the feedback. The new Xero Expenses module is richer in functionality than our existing expense claims feature. It is designed to save you time and provide better information for decision making. It is free for you and your team to use until 28 September. We recommend you give it a try and then please provide us with feedback if you feel the same way then.

E Bell in reply to Jeremy Sutton
July 14, 2018 at 7.06 pm

Xero, YOU ARE NOT LISTENING. None of the feedback I am reading supports the new Expense feature. It is completely unjustifiable to make your customers pay for something we don’t want, and from what I am reading, don’t need. I am completely satisfied with the expense feature as is. Leave it alone for those of us who want to keep it. I need absolutely nothing more from the feature than it already delivers.

Demian Mclean in reply to E Bell
July 17, 2018 at 4.38 pm

Emma, thanks for writing in. The original expense claims feature will remain available until 31 January to submit and claim expenses as usual. And for approximately the next three months, the new Expenses feature will be available to existing users to try out for free. I understand it seems to have more features than you need, but can I suggest you give it a try, and let us know what you think? It may have features that prove unexpectedly useful, such as automatic scanning of receipts and analysis of spending patterns. We’d keen to hear your feedback.

Yuri
July 10, 2018 at 3.34 pm

Time to go. Thanks for making my decision waiter for me.

Trent Innes in reply to Yuri
July 10, 2018 at 4.13 pm

Hi Yuri, sorry to hear you feel this way. We work hard to provide continued value to small business and we hope you find a solution that suits your needs.

Heather Smith
July 10, 2018 at 3.45 pm

Can we please have price increases that start on the 1st of the month?

Surely the 1st of the month is the optimal time to adjust prices for the majority of partners?

Thank-you.

Heather

Trent Innes in reply to Heather Smith
July 10, 2018 at 4.14 pm

Hi Heather. Thanks for the feedback on timing which we have taken on board.

Kerry B in reply to Trent Innes
July 10, 2018 at 5.31 pm

We have clients who pay their subscription annually, on the 1st of July. We are now faced with the need to send out an adjustment, surely the beginning of the financial year would have been a better time.
I too am faced with the embarrassment of encouraging clients over to Xero at a price point comparable to other cloud software, only to have them pinged with a substantial price rise not long after.
Also I am wondering what the extra features at no added expense are.?
I missed the memo on the cut in discounts too.
Perception is often more important than fact and the perseption of Xero at the moment is price gouging

Trent Innes in reply to Kerry B
July 10, 2018 at 6.58 pm

Thanks for the feedback, Kerry. I really value the support of our partners and know there’s never a good time to introduce a price change. I hope the notice period of almost three months helps ease the transition a little. When it comes to the extra functionality, we have listened to the feedback of small employers. Our standard plan now allows for the payment of two employees in the standard edition at no extra cost.

Greg
July 10, 2018 at 3.56 pm

Can xero even do that? Forcing customers to buy an extra app to replace one that does the job well.

Agree with most of the other comments, particularly John.

I would prefer to have reasonable annual increases, with a list of what has been achieved over the year, instead of paying for options.

Is the new expenses app by a third party developer?

Jeremy Sutton in reply to Greg
July 10, 2018 at 5.32 pm

Hi Greg, thanks for the feedback. We take your point about the loss of the original expenses function. However, the new Xero Expenses module is much richer in functionality. It’s free for existing subscribers until 28 September, and we’d really recommend that you try it out. After 28 September, there will be a monthly fee for using Xero Expenses. Use of Xero Expenses is optional, so subscribers do not have to use it if they don’t want to. Thanks for your comment about your preference for annual increases. I have passed it on to our team for consideration.

Michael in reply to Jeremy Sutton
July 10, 2018 at 7.48 pm

Hi Jeremy. You did not answer Greg’s question. Can Xero take away a feature from its package that we have bought and charge you more for the same service but spruced up? I think this is against consumer law and the ACCC will get involved

Trent Innes in reply to Michael
July 11, 2018 at 3.43 pm

Hi Michael – thanks for following up. In common with other SaaS platforms, the Xero platform is evolving over time, with new features and functionality added. We have taken a decision to rebuild our expenses functionality through Xero Expenses. Our aim was to introduce a much richer expenses tool. The tool is optional, and if subscribers choose not to use it then that is entirely their choice and we respect that. We are sorry to hear that you are unhappy about these changes but we thank you for your feedback.

Donna Van Duynhoven
July 10, 2018 at 4.30 pm

Thanks for the update – last time you did a price change you sent thru an email template that we could use to advise clients of the coming doom. Will you be providing similar marketing tools this time around? Sorry if this has been asked already

Jeremy Sutton in reply to Donna Van Duynhoven
July 10, 2018 at 4.55 pm

Hi Donna. Great question – yes we have an email template for you to use to advise your clients of the changes. Please reach out to your Account Manager who can provide this directly.

Shaun
July 10, 2018 at 4.33 pm

I’d been looking forward to using the Expenses app (though it hadn’t been activated/rolled out for my account since installing it last year) for the handful of claims I process each year, but the idea of $60/year to reimburse a few purchases isn’t financially wise for my situation.

However, readying between the lines, does “The old expense claims feature will remain available to claim and pay expenses until 31 January ” mean I’ll have no other option to process expense claims? Are you removing the current functionality to process expenses from within your accounting software?

I can see how you could justify charging for the convenience of lodging claims on the go (despite seeing that mobile claims option included in promo material years ago, something that first drew my attention to Xero), but to not leave the current option in place seems very unreasonable. I hope to be proven wrong and that there will in fact still be an option for claiming expenses included in the monthly fee.

Erin Smith in reply to Shaun
July 10, 2018 at 5.46 pm

Hi, Shaun. The original expense claims feature is due to be retired at the end of January, although historical entries will remain visible. We are listening to feedback about the loss of the current function, and passing these comments along. However, we also recommend you try out the new Xero Expenses function, which is free for current subscribers until 28 September.

Stephen in reply to Erin Smith
July 11, 2018 at 1.17 pm

Hi Erin,

So basically from Jan 2019, Xero will be loosing a feature that users can now use for free. In that the original ‘Expense Claims’ feature will be turned off. So if a user wanted to use that feature and was on occasions using that feature (included with the cost of the subscription) they can no longer do this, unless they pay the $5 fee per user per month?

Did someone think about only charging $5 for people that approve expenses, and not charge for people who submitter’s? If this was done, then the companies that have lets say ten users submitting expenses, but only three of them approving expenses, would only be charge $15 extra per month rather than $50 extra per month for a feature that they already have access too. Yes, I know the new version is better than the old version, but the old version was included for free with the subscription and worked well enough for occasional use or didn’t cost anymore to have ten employees sending in the occasional expense. So to use the expense feature (that I use to have access to for free) I now have to pay for it (lost feature).

The other model that could have been used is all approver’s are charge at $5 per month, but any submitter’s are only charge at $2 per month, if they sent in an expense that month. That way if a user does not submit an expense, then the company does not pay a fee for that user that month. This works on the pay-as-you-use model, but there are many people at Xero that know this already.

Erin Smith in reply to Stephen
July 11, 2018 at 5.51 pm

Hi Stephen. That’s correct – the current expense claims feature is due to be retired to ‘read only’ at the end of January 2019. The new Xero Expenses module will cost $5 for one user and $5 for every active user after that. To clarify, we only consider the person who is being reimbursed as an active user – the approver is not included in these calculations. I hope that helps clear things up, and thank you for your alternate pricing proposals, which I will pass on for more thought.

Janelle Redgwell
July 10, 2018 at 5.27 pm

Hi. I pay the subscription for one of my clients – Premium 50. The price is increasing from $90 per month to $125 per month (in excess of 30% increase), yet Single Touch Payroll is not even available on his file yet. I know he gets an automatic deferral, but I would really have liked to see STP rolled out to larger employers as a priority

As a BAS Agent, my fees increase on 1st July of each year. Considering I include the Xero Subscription in his package, it would have been nice to know prior to the start of the new financial year :(.

Demian Mclean in reply to Janelle Redgwell
July 10, 2018 at 6.15 pm

Hi, Janelle. Thanks for writing in. I can understand why the timing of today’s news isn’t ideal for you. The reality is, there’s probably never a good time to adjust prices. That’s why we’ve tried to give nearly three months’ notice. We’re also offering an email template that you can use to help communicate the price changes to your clients, if that’s helpful. Please reach out to your account manager on that. As to Xero customers covered by the STP deferral, we’ll roll STP out to them from September and prioritise larger employers. (Note the price changes don’t come into effect until 28 September.) Thanks again for your feedback.

Paul
July 10, 2018 at 5.59 pm

Instead of looking at acquiring new customers for growth you penalise the existing ones by hiking prices up.
Another SaaS company killing it’s own growth, good luck.

This change is prompting me to look at alternative products.

Trent Innes in reply to Paul
July 10, 2018 at 6.07 pm

Hi Paul – thanks for your feedback and sorry you feel that way. Changing pricing is never something we do lightly but feel that it is justified for the increased investment. Our pricing is the same for both new and existing customers.

Susie Quadrio
July 10, 2018 at 6.12 pm

I can understand the need to increase prices (although the top two seem a bit excessive) but could we not have been advised of this prior to 30 June? We (and I’m sure a lot of other practices) have just renewed our clients fixed price agreements for the next twelve months and now we’re going to have to go back to them and advise that their payments will have to change. It does not look good from our end.

Jeremy Sutton in reply to Susie Quadrio
July 10, 2018 at 6.26 pm

Hi Susie. Thank you for your feedback. Unfortunately there’s never a good time to adjust prices, but like any business, we need to review our pricing from time to time. We appreciate the admin associated with these changes. In an effort to assist with this we have provided nearly three month’s notice.

Jon
July 10, 2018 at 6.22 pm

We pay $60 per month for this software. The increase in monthly cost seems OK, I understand you have to review periodically (although an 8% rise seems high). The cost of the expenses element per employee for me though, will lift my annual expenditure on this accounting platform by 33%, assuming I don’t take on any more employees. We are a small business and this seems a significant change. Can you please review the per employee pricing for the expenses or leave us the basic functionality without the extra cost?

Erin Smith in reply to Jon
July 10, 2018 at 6.41 pm

Hi Jon. Thanks for you comment. We are listening to feedback about the loss of the current function, and what it means for you and your business. In the meantime, the new Xero Expenses function is free for current subscribers until 28 September, so I encourage you to try it out to see if its new functionality brings you the return on investment you’re looking for.

Jon in reply to Erin Smith
July 12, 2018 at 2.26 pm

Erin, thanks for the response but I’m not sure what you mean by listening to feedback? I’m hoping that it means that you are reconsidering the loss of the original function? If so, when do you think you will be able to confirm its retention?

Also, the new functionality may add some convenience but my income won’t improve and I won’t have any costs offset, so I don’t understand your comment about return on investment.

Erin Smith in reply to Jon
July 12, 2018 at 7.04 pm

Hi Jon, as to your question about keeping the original expense claims feature, our most current plan is outlined in this blog. https://www.xero.com/blog/2018/07/expenses-beautifully-reimagined/ In short, the original expenses feature will remain available for claims and expenses until 31 January 2019, after which point only historical entries will be visible. We’d encourage you to try the newly designed Expenses over the next three months, when it’s free for existing Xero users.

Umberto Santoriello
July 10, 2018 at 6.38 pm

I am hugely disappointed in seeing this price hike!
Times have never been tougher than the present time.
Xero is in the small business market!
Small business are hurting right now!
In fact small to medium sized accounting practices who look after the SME market in most cases have not increased their fees for over two years and are still not doing so!
I honestly think that Xero should have looked at the bigger picture and looked after the business sector that fuelled Xero’s growth over the last five years.
Inflationary price increases fuel negative sentiment amongst small business owners. As accountants we have to deal with this added stress of passing on your price increase as we certainly cannot afford it.
Wrong move at the wrong time by Xero in my opinion!!!

Demian Mclean in reply to Umberto Santoriello
July 10, 2018 at 7.03 pm

Hi, Umberto. Thanks for writing in. Like all businesses, we review our prices from time to time. We’re updating them to reflect the improved value we’re delivering and the rising cost to serve larger businesses on a per-employee basis. I understand that this isn’t an ideal time for you, and in fact there’s probably never a good time to adjust prices. That’s why we’ve tried to give nearly three months’ notice. We’re also offering an email template that you can use to help communicate the price changes to your clients; please reach out to your account manager, who can provide this. We value our relationship with you as a Xero partner, and we take seriously the challenges you face.

Simon Robins
July 10, 2018 at 7.32 pm

I am a sole trader who has no employees and I currently use the Expenses to track my own expenses only. This works fine and I do not need anything changed. Nothing in the new Expenses features is of value to me and I do not wish to be forced to use this with a $5/m price hike. If there will be no option to opt out of the new expense feature, and not be charged for an Expense feature that is standard on your competitor’s plans, then I will have to jump ship. I’ve been waiting years for a deposit feature on invoices and bill reminders with no joy, and now this. You are really alienating small business here and I think you will experience a backlash due to this. Disappointing to say the least. (cue the copy & pasted response as per above…)

Erin Smith in reply to Simon Robins
July 11, 2018 at 12.21 pm

Hi Simon. I’m sorry to hear you feel disappointed with the rollout of our features to date, and can assure you we are personally reading, sharing and responding to all the feedback that comes through to us – which includes your point about the value of our new Expenses release to you verses the current functionality. We’ll be sure your comments reach our Expenses team.

Anne-Claire Petre in reply to Erin Smith
July 11, 2018 at 2.33 pm

I’m in a similar situation. Sole trader and only user and I have actually never used the Expenses tab. To be honest I’ve only just discovered it. It’s not a huge increase (although still 10%) but this has zero added value for me and I also feel I should be allowed to opt out. As Simon, there are plenty other features that I also have been waiting for (and going by the issue threads in Xero I’m not the only only one), yes deposit feature is one, attaching documents to purchase orders is another. These seem like such basic features but nothing has been done for years… I’ve been working with Xero for over 3 years now and used it at a different place for 3 years before that. Back then we were already asking for these features.
I’m not sure what you’ve asked of small businesses to add this expense feature but I’m pretty sure you didn’t ask them what they would think of the price hike. If I had several employees, I’d sure feel pressured to be looking at other options. I really feel sorry for these guys… I’m not sure this $5/user has really been well considered and hope you may revisit this… Something has gone wrong here. Of course nobody likes a price increase but you have to agree that some of these extra charges incurred are insane and not acceptable.
I love using Xero but this is not how you support small businesses. This is how you move in another direction Xero…

Demian Mclean in reply to Anne-Claire Petre
July 11, 2018 at 3.27 pm

Thanks, Anne-Claire. We appreciate that you’ve been using Xero for six years and value your perspective on this. I’ve added your feedback on the new pricing and promise it will be forwarded to the team managing Expenses.

Richard in reply to Demian Mclean
July 11, 2018 at 5.45 pm

Editorial note, I’ve tried posting a stand along reply but I can’t get it to work so I’m posting this as a reply to someone else.

We are a small business and user of the existing expenses claim feature within Xero. In our context the existing expenses claim system works just fine for us and we don’t need the additional functionality that the new system provides.
I notice in the Xero announcement that it states “The old expense claims feature will remain available to claim and pay expenses until 31 January. After that, only historical entries will be visible.”. The statement implies that the old expense claim system will be decommissioned on 31 January 2019 although the statement on the Xero site isn’t 100% clear on this and I would encourage Xero in the spirit of openness and transparency to be crystal clear about this and revise their statement.
Assuming I am correct, it would appear that the only way that expense claims will be supported after 31 January 2019 will be to pay a $5 per month per user fee. This adds a $60 fee per user per year. If I apply the “reasonable person” test to this and reflect on the cost of a base subscription and what you get, and compare this to cost of supporting claims post 31 January 2019 and what you get there is a huge disconnect in the value proposition versus price point and it this fails the “reasonable person” test comprehensively. In our case it would mean that Xero, a cloud based finance system provider is forcing us to go back to manual paper based processes in the 21st century – not a good look and very disappointing from an environmental perspective as well.
I would urge the management of Xero to rethink this very carefully. Taking away functionality and then asking people to pay for it is a sure way to disenfranchise your subscribers. It’s certainly taken the gloss of Xero for us and assuming Xero doesn’t change its position, it will be cause for us to re-evaluate which provider we use.

Trent Innes in reply to Richard
July 11, 2018 at 6.01 pm

Hi Richard. Thanks for comments about your use of Expenses, which will be passed onto our Expenses team. In the meantime I wanted to offer clarification on the points you mentioned. Firstly, I can confirm that the current expense claims functionality is due to be retired in January of next year, after which point entries will become ‘read only’. With regard to the value we seek to offer through our expense offering, we took a lot of feedback from accountants, bookeepers and small business owners in order to revamp one of our earliest features into a separate Expenses module that offered improved features and fair value. In the same vein, we will continue to listen to any further feedback we recieve. I hope that helps explain some of the decisions that you refer to, and that we can continue to support your business.

Paul
July 10, 2018 at 7.51 pm

How about features that users want and have been requesting for years like simple to use settlement discounts on their invoices ?

Personally I need multi-currency, no payroll, no expenses so how do I opt out of the additional costs ? Or is it time to dump xero (something I’ve been considering for months)

Erin Smith in reply to Paul
July 11, 2018 at 1.25 pm

Hi Paul. You mention two questions there, which I’ll get to one by one. Firstly, regarding feature requests like the settlement discount, we do follow a process so we can capture and triage all product requests from our community – including the Community Request Forum, which you may be aware of. Given the variety of ways we gather and assess input, some features are inevitably worked on before others. I know that can be frustrating when yours is not chosen, but all requests are considered – and you can follow the updates here: https://community.xero.com/business/discussion/2725145#answer63127676. When it comes to our product offerings, we bundle our features in the way we believe suit mosts businesses, and I do hope there’s a level out there that you believe still offers value to your business.

Alan Turner
July 10, 2018 at 8.04 pm

Xero,

I’m happy with the existing expense claim system, and have no desire to change to the new system at the rates proposed.

Please give your customers the choice of remaining on the existing system. If you force me to change, I’ll seriously look at your competitors with a view to changing.

Thanks,
Alan

Erin Smith in reply to Alan Turner
July 11, 2018 at 1.27 pm

Hi Alan. This is helpful to know. Thank you for writing in and letting us know your feelings toward our current and new Expense offerings. I’ll pass them on to the team managing Expenses. We are listening, and I hope you’ll remain with us.

Peter Leslie
July 10, 2018 at 10.22 pm

Hi Xero
the whole point of SaaS is that you pay a fee and get features and you get improvements/enhancements to those features over time.

If the price goes up, i can cope with that…

but to ALSO do a price increase and to charge ADDITIONAL fees for a feature that already exists (but you’ve revamped it) – that is just plain RUDE and money grubbing … and i expected better of Xero.

i’ve been patiently waiting to improvements to the expense claim system (cause frankly the current one sucks) – but to be slugged extra to have this feature, because you finally got round to fixing it… despicable.

i’ll be looking round for alternatives … as Xero is NO LONGER doing business beautifully.

Demian Mclean in reply to Peter Leslie
July 11, 2018 at 1.08 pm

Peter, thanks for writing in. As you can see from the previous comments, some customers share your sentiment about pricing for the new Expenses. I’d just like to point out the new Expenses is quite a different product than the original one, with a substantial difference being the ability to ‘auto-capture’ receipts. The new Expenses is free until 28 September, so I would recommend you give it a try. We’re very interested in the feedback we’re getting from Xero customers, and I’ll pass along your comments today to the team that’s overseeing Expenses. Thanks again, Peter.

Julianne
July 10, 2018 at 10.36 pm

I wish you would work on the hundreds of requests to have an easy delivery docket to print with invoices. I have painstaking created the Docx. That you recommend but it doesn’t have the same layout and can go over 2 pages on large orders. And why should your customers need to create when we are paying (more) for this service…….

Jeremy Sutton in reply to Julianne
July 11, 2018 at 1.12 pm

Hi Julianne. Thanks for the feedback, we will pass it onto our development team. When it comes to feature requests, we work with a broad range of customer feedback globally – and appreciate that means some features are prioritised over others. For this particular feature development, I recommend staying across the following page, where we will post updates as they come https://community.xero.com/business/discussion/2725145#answer63127676

Ryan Dunbar
July 11, 2018 at 12.30 am

Wow, to say the least, this price hike is ouch!
I must say though, hasn’t everyone missed the real problem here? Almost all of the responses returned from the XERO company are the SAME!! Do i detect a bit of cut and paste? or do i Detect that some of the 250$mil went into writing a script that auto replies?
Have a look at the responses and you will see “we review our prices…” “the reality is there is never a good time to change prices…”
Disappointed that a personalised response wasnt given to many people who have written in, and reading the responses was the same corporate crap you expect when dealing with a big company who is just interested in fobbing you off, by using cut and paste comments re-stating the companies position over and over again…come on XERO i felt you were better than that.
Xero, have a look around and understand that small businesses use your product, we know prices do increase….but not jump. An in a market where Xero was the outright leader (but the others have caught up now…) you will find many people will vote with their feet.
Yes yes 3 months notice is great, but where is the ” thanks for the feedback, we have made a company policy to notify all customers prior to the EOFY, and implement on the 1st of July” pricing policy? This would make life easier on all.
I have been passing on the benefits of XERO to small business like mine, but now the cost doesn’t justify it. Im Disheartened by this.

This took me about 14 Minutes to write out…..lets see if they go with a personalized response(forced too)….or a cut and paste?
Extremely Disappointed with the execution of this price rise.

Demian Mclean in reply to Ryan Dunbar
July 11, 2018 at 11.43 am

Hi, Ryan. A Xero staff member writes every one of these replies, personally. For consistency’s sake, we’ll sometimes use reuse phrases when answering nearly identical questions from different customers. But each comment gets our undivided attention. I can understand why you would have liked to know about the price change prior to EOFY. It’s hard to find a time that works equally well for all of our customers. We’ve tried to give as much notice as possible. Our last price adjustment was over two years ago, and in that time we’ve delivered hundreds of improvements. At some point, the increased value we’re delivering will be reflected in new prices. We think the new pricing is reasonable, but we also respect that you see it differently. We hope you’ll stay with Xero.

Louis
July 11, 2018 at 12.49 am

“Many will find their plan has extra features at no added expense.” – what features are these? There are none mentioned in the article, except the REMOVAL of features, i.e. we can no longer use the Expenses feature built into Xero, but now have to pay even more to do expenses.
Starting to feel like everything costs extra on Xero these days.

Erin Smith in reply to Louis
July 11, 2018 at 11.56 am

Hi Louis. The extra features refer to a few things, including the change to our standard plan, which now allows for the payment of 2 employees instead of one, at no extra cost. This was something that came up when we spoke to small business employers. They indicated their major concern was the limit of only being able to process payroll for one employee. We have also made improvements to reporting, payroll and the mobile app – and you can find more details about those features here: https://www.xero.com/au/about/product-releases/ Hope that helps answer your question.

unhappy in reply to Erin Smith
July 11, 2018 at 2.20 pm

Hi Xero, we appreciate that you add new things, such as additional payroll for free. But you should not take existing things (e.g. ‘expenses claim’) away! how are we going to explain to our clients?

Erin Smith in reply to unhappy
July 11, 2018 at 4.51 pm

Hi there. Thanks for your comment – sorry to hear you’re unhappy with the changes to our expenses offering. In regards to explaining expenses to your clients, we recommend you encourage your clients to try the new module now for free. Also you could share our training page – down the bottom in the middle there is a 4-minute video covering the new functionality: https://www.xero.com/au/training/client-onboarding/

Jon in reply to Erin Smith
July 12, 2018 at 2.41 pm

This is a competitive market, and you need to add new features to remain competitive. While you may have higher development costs you also have lower deployment and distribution costs than other businesses. The strategy seems to have been market capture, and now market exploitation.

Quickbooks and MYOB were behind but have recovered a lot of ground with new functionality in the last year or two. Supported transfer of data, continued functionality investment to win back the market, much lower costs – starting to look quite convincing.

Luke
July 11, 2018 at 1.17 am

As a Chartered Accountant, now operating my own firm, who championed Xero from day zero, migrated hundreds of clients to Xero and added thou$and$ to Xero’s bottom line, my 2c…

Agree that Xero needs to occasionally adjust pricing, aka pleasing shareholders, aka letting the new CEO make his mark… etc.

My only request is that you leave the legacy Expense Claims feature available for those clients whom do not care for the revamped version, and do not want to be extorted onto it at a petty $5 per month per user. To do so would just generate resentment for little financial gain, especially given that the existing EC feature is perfectly OK. I’m already receiving negative feedback/emails about it.

Thanks. (And please don’t reply with “it’s still available until 31 Jan” etc.)

Erin Smith in reply to Luke
July 11, 2018 at 1.30 pm

Hi Luke. Appreciate you sharing your 2c and for your support of Xero over the years. I know you’re aware of the date that the current expense claims functionality remains available until, so I just wanted to let you know that we value your partner viewpoints and will be passing your request onto our team.

John Vagg
July 11, 2018 at 2.20 am

You say that in the last 2 years you have spent $250m on research. Considering that research generally involves people and wages that would allow for 250 people earning a 500,000 dollars a year each to do research. One wonders why you still can’t put negative quantities on Bills but now have to spend $5 month more.

Scott
July 11, 2018 at 8.57 am

You keep repeating the same marketing speak, “its never a good time to increase prices” and “the rising cost to serve larger businesses on a per-employee basis”.

While i agree it is never a good time to increase prices the cynic in me thinks you intentionally chose this particular time as you know it will maximize your profits. Immediately after financial year end when you know it will be difficult for people to change and hoping that by the time they can change they have learned to live with the increased charges. Something like this doesn’t happen overnight and it just coincidentally happens a week into the new financial year. Can you put your hand on your heart and say this isn’t true? I think not.

Also, if the cost of servicing larger businesses is increasing, why aren’t they the ones paying for it?

As for your review of the market with regards to expense claims, i would suggest you go back and review the competitors in this market because for around the $5 mark you will get a whole lot more than you are offering including amex, Visa, Mastercard integration, multi-step approvals and charges based on active users not total users. You are charging rolls royce prices for a hyundai product.

Jeremy Sutton in reply to Scott
July 11, 2018 at 5.03 pm

Hi Scott. The businesses most impacted by this price change are the larger businesses on Xero — being those that pay the most employees. There are no changes to plans that feature payroll for one employee (standard and starter), and the standard plan now allows for the processing of payroll for two employees. The largest change is to the premium 100 plan, which accommodates businesses that employ between 51-100 people.

Tracy
July 11, 2018 at 12.11 pm

Xero is becoming very expensive to recommend to clients. I have a client paying for projects, which doesn’t deliver what they need so I we will probably remove that option, and now they will have to pay an extra $60-$80 a month for expenses that was formally free!!! I don’t understand why you are removing the old free process, it has worked fine.

Jeremy Sutton in reply to Tracy
July 11, 2018 at 1.31 pm

Hi Tracey, thanks for taking to the time to share your thoughts. The old expense claims module is one of our earliest features. We have received a lot of feedback from accountants, bookkeepers and small business owners globally that it needed to be updated. As a result Xero has invested heavily in the new Expenses module, which includes many improved features such as the ability to ‘auto capture’ receipts. If we were to both keep the old module and release the new, we would have run into on-going product, support and training challenges. Hence the decision to retire the old module in a little over 6 months.

Unhappy Partner
July 11, 2018 at 1.24 pm

Your attempt to spin the discussion on the basis of the magical $250m capital investment you have made is at best cynical at worst it devalues the time and investment by your accounting practice clients in bringing your product to market & pays little respect to respecting our integrity based relationship with our clients.
You further claim that prices are reviewed and adjusted time to time by businesses. I wonder how many businesses selectively slug their clients up to 50% . Your price increases are specifically targeted at large businesses where the cost of change often exceeds the cost of the software or tech. Xero is effectively fishing to see what the market will bear as a lead in to wider cost increases .Given your claim in your release that “Many will find their plan has extra features at no added expense” , can we assume that there will be claw back in these “extra features” down the track?

Demian Mclean in reply to Unhappy Partner
July 11, 2018 at 2.06 pm

Hi, thanks for writing in. We’re always trying to find the right balance between the value we’re delivering and pricing. In this case, it’s been over two years since prices changed on Xero. The new pricing structure reflects hundreds of improvements we’ve made to the platform in that time, as well as the rising cost to serve larger employees, on a per-employee basis. As a partner, we hope your larger clients will understand these changes, and we’ve put together an email template to help communicate the new pricing to them; please reach out to your account manager if you’d like to use the template and discuss it further.

Zac
July 11, 2018 at 2.07 pm

I’d like to echo the sentiment of others in relation to the expense claims feature. With 10 staff, our price is changing from $70 to $125 due to the $5 per user fee. I think it’s extremely unwise to announce a price rise at the same time as announcing you are REMOVING a feature we rely on.

This is a 75% price rise which is unacceptable. How can you remove a feature that has always been there! A company that used to be leader of the pack interested in providing great value now just seems to be money hungry. What a shame.

Erin Smith in reply to Zac
July 11, 2018 at 3.39 pm

Hi Zac. Thanks for taking the time to add your voice to the feedback you’ve read, and sharing with us how you use expenses too. We always look to provide continued value to our customers, and input such as yours is an important part of that process.

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