We have announced an increase to two of our monthly subscription plans. The standard plan is increasing by £2.00 and premium plan by £2.50 from 1 August 2019 – for new and existing UK customers.
Since the last change to UK plan prices in 2016, we’ve constantly invested in research, development and innovation – but the time has come to revisit some of our pricing.
Xero UK pricing plans
We understand that price increases aren’t often well received, but we hope you’d agree we’re delivering real value to UK businesses.The price of the starter plan remains the same, as do the prices of Xero Ledger, Cashbook and VAT Cashbook that are only available through Xero partners. If Xero has provided a current discount or promo code, it will continue to be applied to the new pricing from 1 August 2019 until the expiry date. For more details on how the new pricing will apply to current discounts see our FAQs.
Delivering greater value year after year
It’s no secret – we’re out to change the game for small businesses. To do that, we’re continually making improvements – enhancing existing tools, delivering new ones, and making updates in line with changing rules and regulations. It’s non-stop! But we love the challenge; and we love hearing that our award-winning software vastly simplifies and streamlines those day-to-day bookkeeping and accounting tasks.
We’ve helped make life easier for businesses that include online payment options when they invoice using Xero. In the UK, they’re getting paid up to 50% faster – or about 20 days sooner – on average. At the same time, we’re making it easier for business owners to manage money on the move with mobile improvements. Recently, we’ve also added bank feeds for leading UK fintechs, including Revolut, Tide, Transferwise and Starling Bank.
Investing in practice tools for accountants and bookkeepers
Accountants and bookkeepers play an essential part in the small business support network. We believe the additional tools and services we’ve built make the way they serve businesses better.
It’s easier to make the move to digital accounting with our client migration tools; and a host of new learning and support resources at Xero Central make sure everyone can get the most out of Xero. You’ll find training courses and discussions – plus, it’s now much easier to submit queries, track their status and view your case. On top of that, there’s been a continuous flow of releases that you can check out in our product release timeline.
Our Making Tax Digital functionality and recent investment in Xero Tax – currently in beta – reinforces our commitment to compliance. We’re changing the way you file returns directly to HMRC and prepare annual accounts with Companies House – not just for VAT. The full suite of compliance tools within the Xero platform will cover personal tax, corporation tax and statutory accounts too.
More product enhancements to come
With Xero, there’s always more and better to come. We’re boosting our investment in code-free accounting – using machine learning to find patterns, then automatically and accurately code transactions.
Keep an eye out for announcements of more exciting additions to Xero in the coming months.
Like to know more?
For more information about the price changes, see our 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 support team.
10% increase!
For that I would like to see proper backups please:
https://community.xero.com/business/discussion/103661
And the ability to have decent logo quality on invoices etc:
https://community.xero.com/business/discussion/11084468
You have put off doing anything about these for literally years.
But are happy to push through a price increase. Considering your gross margin is 81% (!!!) (https://www.xero.com/uk/about/investors/financial-info/annual-report-2018/) then I presume you can afford to fix some issues. Especially as we will now all be paying more.
Hi Simon, Since our last price change over three years ago, we have invested more than £220 million into R&D, adding hundreds of product enhancements in the process. Today’s financial performance measures aren’t the best indicator of Xero’s current or future success. We continue to build the business and create value for our customers. With regard to your specific product issues, I’m sorry to hear this is having an impact on you. We do listen to our community but we also have to focus on building improvements where they are most needed, or where there is a greater demand from customers. These improvements are all aimed at saving you time and getting you paid faster so we believe even with the additional 50p a week in price represents good value.
Your future success isn’t exactly a concern for your customers either and reactions to a price increase are a good measure of how people feel about you.
The very nature of a subscription business is that it pays for ongoing developments, so telling us about your investment into R&D isn’t reassuring.
The quickest way to increase GP per account – increase prices by 10% across 2 million odd global subscribers. Price rises from massive tech firms onto their small business customers are irritating.
Or is it just your UK customers that get this price increase?
Hey Peter, thanks for your comment. We’re genuinely committed to making life better for businesses around the world and here in the UK. If we’re successful with that, we can invest even more into supporting your businesses and others to be successful – whatever your definition of success.
That 50p per week price increase reflects the investment we’ve made in the product over the past three years, along with tracking inflationary rises. Our investment in product development, using artificial intelligence and machine learning to automate data entry, is simplifying the way businesses manage their accounts and while these improvements can be difficult to see on face value, our data and feedback from customers show real improvement, particularly in time saved.
Hi Clemmy
If you have invested £220 million in R&D in the last three years then why do these two basic issues still exist?
No proper downloadable backups:
https://community.xero.com/business/discussion/103661
Poor logo quality on invoices etc:
https://community.xero.com/business/discussion/11084468
I would suggest that your £220m R&D is not being wisely spent.
I would also suggest that if your gross margin is 81% – as noted (boasted?) in your annual report – it is not as if you NEED the price increase to stay profitable.
No-one would moan about an above-inflation price rise if you actually bothered to address some of the major concerns listed on your forums, and indeed in the replies to this blog post.
I for one am sick of being fobbed off. You say you listen to the community – have you looked at those two posts I have given links to? There are many many many comments requesting these features. You have done nothing about it. So you may be “listening” but Xero is NOT acting on them 🙁
So, in return for paying an extra 10%, when will you provide user downloadable backups? When will you allow for a proper professional logo quality?
Regards
Simon
Simon – I completely get how it can be very frustrating when certain aspects of Xero that customers would like to see improved just don’t get any love or where perfectly rational or obvious requests for improvement just simply appear to be ignored.
I’m afraid the reality is that this is always going to be a difficult area for us to balance when trying to serve the needs of millions of Xero users from whom requests for improvement can potentially emerge, and where rational attempts to democratically apportion priority using mechanisms like feature voting, or measuring demand based upon the number of comments or supporters a particular request garners just won’t, sadly, cut it.
Therefore it falls to us to make the tough judgement calls on balancing often contradicting priorities or demands on our resource and where we determine the quantitative benefit of improving or adding functional value will serve the most pressing or highest value need for most of our customers. Often we’re damned if we do and damned if we don’t, and that’s just a fact of life.
What I can say is all feedback is taken on board and used to inform how we prioritise. We’ll feed your point about logo quality onto the engineering team for that area, but it’s unlikely that we will invest any effort on building a backup feature any time soon.
You can obviously export your data across a number of aspects of Xero as often as you like, but I also accept that a single shot automated feature would be less onerous, however this is not likely to feature on our schedule of improvement any time soon, I’m sorry to say.
It would be good to see Xero improve on the core product and not spend so much time with the bells and whistles gimmicks which only the few will be interested in. Bulk purchases, Supplier Activity reports, Viewing Credit Notes when reconciling, came up 100’s of times in Xero community last year and already dozens of times this year. Never any reply from Xero on these basic functions all Accounting systems should have.
Hi Simon,
We keep a close eye on the Xero Community which helps us prioritise Xero feature updates. However, we do have to balance our product development taking into account a range of factors including the impact on customers today and in the future. That means sometimes we have to prioritise which product requests we respond to so that we have the greatest impact on our customer base. Thank you for sharing your thoughts.
Clemmy
Hi,
It seems like now you’ve got me you can just automatically up your charges!
As a small single engineer I’ve invested time into crossing to you and then you charge me more for services I can’t see any benefit for me…. does that make sense…. why can’t I have a standard package?!?!
Hi Frank, thank you for your feedback. We’re really committed to providing the best experience possible for our small business customers and so we’re continually investing in improving the experience for you. Some of these updates will happen in the background. For example, our development in AI and machine learning to correct coding errors and our improved invoicing and payment services experience to help businesses get paid faster. It can be hard initially to place a premium on benefits like these, but we think at 50p a week extra it represents great value and time saved in the long run.
Whilst I think XERO is a nice system to use, I think this price increase will make me consider my options in future. It feels like a greedy grab now you have users on board. Nearly a 10% increase on monthly fees 🙁 No one likes an increase but I felt it was already expensive before. The starter plan is too small for any real business and the standard plan is too expensive for a small business. There needs to be another option so you can serve smaller businesses as well as medium and large. Cloud based accounting has its advantages, but a huge disadvantage is the ability for you to put prices up when you feel like it. 🙁
Hi Justin, Thank you for your feedback. We really care about providing the best possible experience for our small business customers. Like all businesses, Xero reviews its pricing from time to time and we’re updating our prices to reflect the improved value we’re delivering. It can be hard to put a price on benefits like these but we think this increase represents great value and will save your business time in the long run.
Thank you for advice about a price rise. With the extra money you will taking from me could you please speed up your servers as intermittently Xero is getting intolarably slow, I guess with all those new additional customers you have signed up. You have a good package but it is not perfect you have not listened for over 5 years with some customers that you need to create a field for a customers order number. Please put that into your plan if you are rising prices I know lots of your customers have been asking for this for many years including myself.
Thanks,
Hello Jason, thanks for getting in touch. To your comment about us being perfect, we’re proud of what we are continuing to build for small businesses, but we certainly never rest on our laurels and we continually strive to do better. Sorry to hear you’re having problems with speed – I know you’ve been in touch with our customer experience team on this a few weeks ago. I hope some of those suggestions they responded with might have helped in any way?
If you increase prices you should make one of your chargeable extensions fee for example the new expenses.
Otherwise I don’t think your adding value – I see no value add at all.
I think you are taking advantage of been forced to submit VAT online with a more captive audience to increase the price.
Hi Linden, we appreciate your thoughts and understand that price increases are never great for our customers. I’m sorry to see that you’re not seeing the value in Xero at the moment – we’ve invested more than £200m in R&D over the past three years with hundreds of product enhancements to save businesses time including. For example, our development in AI and machine learning to correct coding errors and our improved invoicing experience to help businesses get paid faster. It can be tricky to put a price on these improvements, but we think the extra cost represents great value and time saved in the long run. We’re really committed to building a platform that supports our customers today and in the future, and we do believe this increase reflects our investment in the development of our entire platform since our last price increase.
Hi There. As regards the £200m R&D you’ve invested. I am pretty sure my current subscription pays for that and at the same time some of that new functionality is only available as bolt on’s, so not only am I paying for the R&D required to develop new services, I need to pay more to get the “benefit”.
This does not sit well, the same service, platform for more money. I feel no immediate benefit from this price rise and hence it don’t sit well with many people
Hi Linden, we’re genuinely sorry that you feel this way. We wouldn’t make a change like this recklessly – but please be assured that we’re committed to investing in delivering the best value for our customers now and in the future.
While you’re at it, how about supporting automated returns for the annual VAT scheme?
Hi Stephen, there’s no obligation for you to do this with HMRC until October 2019, but if you’re above the VAT threshold of £85k, this is something we are actually looking to address within our Making Tax Digital functionality.
I only joined up three months ago. Now you are already foisting an almost10% increase in prices on us, and at a time when you have already profited enormously and with little effort from new VAT reporting rules introduced by HMRC. This is greedy and disgraceful.
Hi Robert, We appreciate your concerns. This is the first time we’ve reviewed our prices in three years and we’ve given as much notice as possible. We’re constantly looking at ways to help small businesses save time today and in the future. This price increase isn’t related to the new VAT reporting rules, but reflects a £220m investment in 100s of product enhancements as well as tracking inflationary rises. We really do value your business so thank you for sharing your thoughts.
If you had any sort of proper business plan, your R&D budget would come from attracting new users to your service in order to pay an 81% markup every month for as long as their business is in operation, and this money is what would pay for continuous improvement.
If you’re screwing it up, then yes you’ll need to ask existing users to make up the difference as you’ll know deep down that your shoddy service and slow progress in fixing bugs and making improvements isn’t attracting people as quickly as you need to in order to keep investors happy and keep paying the bills.
So which is it Xero?
I moved to QBO two years ago and it has been the best thing I’ve ever done for my business. I kept my three Xero accounts running just for archive purposes, but thanks for giving me the nudge I needed to get them all closed down.
Hi Jay,
We appreciate your feedback. These decisions are never made lightly.
We have to balance our product development, taking into account a range of factors including the impact on customers today and in the future. Sometimes this means we have to prioritise which product requests we respond to so that we have the greatest impact on our customer base.
Standard copy+paste responses to everybody as usual – THESE ARE YOUR USERS! These are the people that pay the bills, pay the investors and pay the salaries, so listen to them instead of just copy and pasting “sorry” every time you find a new way to p*ss them off!
I’ve just cancelled all 3 of my accounts so this increase won’t affect me at all, but seriously; start listening, stop copy and pasting apologies, and do what you can to stop others from jumping ship to QBO, Sage & Pandle. Competition is rife with discounts and deals everywhere – if you can’t look after your users, somebody else will and it’ll be goodbye Xero.
This increase is really unwelcome and given that everything you’ve changed in Xero in the past two years hasn’t been the slightest improvement for me. So I view it as a nudge to start looking elsewhere.
There was a time when Xero stood out from the competition, not any longer.
Hi Mike, thanks for getting in touch. We appreciate your thoughts and understand that price increases are never great for our customers.
Our ongoing investment in R&D, with hundreds of product enhancements over the past three years, is focused on saving businesses time, helping them get paid faster and improving the user experience.
However, we’re sorry to hear you’re not satisfied. If you haven’t already, please do share your requests with the Xero Community. We keep a close eye on this, to help us prioritise Xero feature updates, so your input would be extremely valuable.
How can you be making 81% margin per subscription and still need a price increase with all the new subscribers you’ve just won thanks to making tax digital? My previous accountant insisted I used Xero to work with them and he was able to provide a discount on your price, I have kept the subscription just as all my data is already in there, this may be the push I need to look elsewhere as my theory is that you have sold 1000’s of cheap licenses to accountants to bump up your numbers to the stock market now you are going to increase the prices to the average joe to make up for it. Shocking business practice.
Hi Andrew, appreciate your feedback. Like all businesses, we too need to review our pricing from time to time. But we understand that it might not come as welcome news. Over the past few years we’ve done a lot to improve the Xero experience for small business owners and their financial advisors – committed to saving businesses time and helping them get paid faster.
We will continue to innovate today and in the future. It’s worth also noting that these price changes are not directly linked to our recent Making Tax Digital product updates.
Having just started using Xero for a charity and a pension fund mainly because of making tax digital I really was not expecting a price rise. I hope the Xero team do not think that their customers will not make judgement on price rises by using their feet and walking. A bad taste less than a month into using Xero.
Hi David, we understand that increases are never great for our customers, and these decisions are never made lightly.
The price changes are not directly related to announcements for Making Tax Digital, rather reflect a huge investment in 100s of product enhancements over the last three years since our last price review.
I was going to sign up through our accountant but not anymore Get you started and bang in for the kill as you know most people will not change and learn the ins and outs of a new system again especially when a lot of people have just bought the package and are getting to grips with it. DISAPPOINTED DISGUSTING and jus as I Expected very pleased I didn’t sign up
I appreciate it is “only” £2 per month (50p per week) increase, but as a firm who has just migrated many paper clients on to Xero software, they have already just had a substantial fee increase. To now have to tell the majority (whom have only just joined to comply with MTD) that their subscription is increasing so quickly is thoughtless. I know it is not going to sit well with our clients and understand from their point of view. You couldn’t have done this at a worse time for Accountancy practices.
Laura, we completely understand that price increases aren’t always that welcome. It’s not a decision we made in haste. Our intention was only to improve the experience of using Xero and save businesses like yours and your clients time. This is the first time we’ve upped our prices in three years. I’m afraid that from time to time, companies like ours do need to review things like this. For us, these changes represent a huge investment in 100s of product enhancements to make your life easier, while also tracking inflationary rises. I hope that help explain why we did it.
“An error occurred for the following reason:
You cannot batch pay foreign currency bills, credit notes, overpayments or prepayments.”
How hard can that be? Who signed off on this for a UX? Is it done so, like expenses, multi-currency done properly is a chargeable add-on? The development effort is likely a fraction of the social media effort rebutting the valid observations here and elsewhere in ‘The Community’.
Support just refer you to a blog post that basically explains that they do changes to benefit accountants and potential users above current users still looking for functionality that we had in Sage Line 50.
We tried payroll as a chargeable add-on and we so burned by the bugs and utter lack of support we’re not doing that again.
As we’re just early adopters of what is now Premium and not accountants/partners (no increase) we have got used to all this pay more cxxp from Xero. The email says “speak to your accountant.”, so I did along the lines of “Sorry for introducing you to Xero, what do you recommend we switch to”.
Adam, we understand that it can be annoying when there are elements of Xero, like the ones you’ve mentioned, that you’d like to see improved. We do listen to what our customers want, but it’s a tricky balance. When developing Xero, we have to take into account a range of factors including the impact of users today and in the future. As a result, we have to prioritise which requests we respond to so that we can have the biggest impact overall. All feedback is taken on board (including yours) and it’s used to determine how we prioritise going ahead.
We’ve made a huge investment in improving our platform, to provide the best possible experience for our customers. I understand your frustrations around value for money. There is a lot we do behind the scenes. For example, our AI and machine learning capabilities are constantly being developed to correct coding errors and we recently improved our invoicing experience to help people like you get paid faster. It doesn’t stop there, these new changes will mean we can make 100s more improvements to the platform.
I know it’s not always easy to put a price on benefits like these, but our aim is to only ever help businesses like yours. Appreciate your thoughts, thank you.
I think you pasted the wrong standard line rebuttal, I never mentioned value for money.
I pointed out that basic accounting features are still not available (since 2010) and that you only act on the requests from certain customer segments. I certainly don’t need AI and nothing Xero has done gets us paid faster (we employ Scary Sarah for that). Maybe I could discuss this at Xerocon? Oh I can’t as we’re just yokel end users and not an accounting practice so no fawning jollies for us (just an extra £30pa towards the buffet). Back in 2010 you needed us on board to get the numbers to get Xero in those accountancy practices. You then just cast us aside. We left Sage because they demonstrated the same disdain for end users.
And £220,000,000 for 100s of improvements is about £1,000,000 for each one. On what planet does it cost £1m to code so that you can batch pay Euro invoices in Euro from a Euro bank account???
Hi Adam, appreciate your frustrations. Someone from the team is going to get in touch to see if there is anything we can do to help.
Clemmy – any chance of a more public response? Adam pretty much speaks for many of your users (and ex-users) I’m sure.
Hi Jay, sure. What is it you want a response to?
I can’t help but think these price increases will continue as more and more of us become dependent on Xero. I really like the system, despite some of the issues mentioned above, however when I first signed up (4 businesses) it seemed a genuine cost effective alternative. I have to admit now it doesn’t seem such good value for money.
I have consistently recommended Xero to the many clients and business owners I come across on a daily basis, I have now stopped doing that. It is a good system but regular price increases are making it much less cost effective. It also seems, as with a lot of subscription businesses, that once they’ve got you in the door, they’ll continue to put prices up.
I have noticed little (if any) improvement in the product, despite previous price increases. I doubt very much the product will improve in line with the price going forward, which disappoints me and has led to me no longer recommend Xero.
Hi David, we understand that price increases aren’t always welcome, particularly when many businesses do this regularly, but it has been three years since we last reviewed ours. A 50 pence per week increase tracks inflation but also represents a huge investment in 100s of product enhancements to make life easier. We are going to continue to put a lot of effort into improving Xero although it’s always a balance when trying to serve the needs of so many users.
How about custom fields that customers have been waiting for?!
We know this isn’t ideal, so we are aiming to have custom fields added to invoicing, but we are unable to confirm a date at this stage. In the meantime, you could include this information in the Description field and leave the Quantity and Unit Amount fields blank. As a result, this information will appear within the Description field of the PDF invoice. You can find out more here on our Community page: Custom Fields on Invoices (https://community.xero.com/business/discussion/201056)
That is a really steep percentage increase. How is it justified?
Hi Ruth, we always want to improve the product. That’s why we’ve invested more than £220 million into R&D, since our last price change over three years ago. Creating the right value for our customers is really important to us and a key part of this is a focus on building improvements where they are most needed, or where there is a greater demand from customers. These improvements are all aimed at saving you time and getting you paid faster so we believe even with the additional 50p a week in price represents good value.
Well, there’s a surprise. As soon as a load of new subscribers are forced to sign up to comply with MTD (which has also cost us all a load of time in learning to use the product – mostly from other users experiences), the prices are jacked up. I hope you will wait another 3 years for your next pay rise. I’ve only experienced pay cuts fro the last 5 years – but I don’t operate a subscription service with a captive client base!
Hi Mike, we understand your frustration but do want to assure you that we do not make these decisions lightly. It’s also worth noting that these rises aren’t related to MTD. We are constantly finding ways to improve and evolve our product and have made significant investments to do this. Our intention is and will continue to be to improve the experience of using Xero and save businesses like yours time.
This subscription world we live in is evil, don’t try to justify the £0.50 per week increase as anything else other than that you can and will.
For the basic user of Xero this is unjust. I will do as I always do when greed strikes and cancel my subscription and find the best value alternative. Remember when you tried steam roll that expenses charge……….
Hi Patrick, we don’t want to see you go. The new price reflects all the great things we’ve added to Xero and will continue to add to ensure our product meets the growing needs to small businesses like yours. Our investment of more than £220 million into R&D, since our last price change over three years ago, shows our commitment to continually deliver the best product and value for our customers.
Dear Xero, you’re always going to get flak for inflation busting price increases, that’s a given though still a legitimate gripe.
But the concerns raised here multiple times about taking some of your £220M R&D spend and fixing the core product are very valid.
On top of the points already listed above, this request for the simple ability to edit the account on a spend money transaction for example have been going on for over SIX YEARS, with hundreds of users all asking for the same thing, and it’s still not fixed!!
https://community.xero.com/business/discussion/200861/
You may say you listen to the community, but you clearly don’t prioritise our views.
Please can you increase the priority of reported usability issues, particularly ones with hundreds of requests and years of unhappy customers.
Remember, happy customers become your salesmen. When people ask me what I think of Xero (which happens on a monthly basis) I say: “Yeah not terrible, but doesn’t yet feel like a finished product. There are too many really simple things that you can’t do.” It’s a simple process:
Improved usability –> happier customers –> increased recommendations –> more Xero sales.
Hi Colin, thanks for your feedback. As you’ll appreciate it is a challenge to find the right balance of features and product enhancements that suit all of our customers and partners. I can tell you that our investments in R&D are also focused on making improvements to the core product to ensure we continue to make life better for small businesses like yours.
Hi Clemmy,
Would you be able to shine a light on the main core features that have been improved by that R&D investment?
I have to echo what has been said above. I’m not entirely dissatisfied with Xero, but I’m certainly not making an effort to recommend it to others. This price increase is just one more nudge towards QBO, which seems to be the better option for most people.
I get that price rises need to happen for various business reasons, but you should have waited at least 6 months after MTD kicked in. You guys have timed this very badly from a PR perspective 😉
Hi Phil,
Sure. We are constantly updating Xero, but core examples include: AI & machine learning – we’ve invested a lot in developing our capabilities in this area so the platform can do things like correct codes; Invoicing – we’ve recently made improvements to how people set up an invoice speed up the payment cycle. These are just a couple of the areas we’ve been focussing on. It doesn’t stop there, these new changes will mean we can make 100s more improvements to the platform.
We haven’t raised our prices for three years, and companies like ours need to do this from time to time. So we believe that even with the additional 50p a week in price, that this still represents good value.
I’m a fan of Xero and have been using it for many years. I am genuinely astonished at the ‘£220 million invested in R&D over the last 3 years’ though……This surely isn’t in your core product but other stuff you’re working on? The core product hasn’t changed at all in the 7 years or so that I’ve been using it as far as I can make out, apart from a bit of a GUI tweak? With that amount of investment you’d think the search field would work properly?
This year we switched to the Payroll software and abandoned after two months as it was shocking. If you’re going to do a price increase email, use ‘increased operational expenses’, cost of living, Brexit…..anything other than ‘£220M spent on R&D’!!! It makes you look incompetent, which I know you’re not!