Thursday, December 26, 2013

Xero Business Community (Feature Requests) / Per Employee Xero Pricing (not the RIDICULOUS ALTERNATIVE) & Comments

Over at Xero Community Blog Mike Block, CPA writes:

Per Employee Xero Pricing (not the RIDICULOUS ALTERNATIVE)

Started by Mike Block CPA Xero Silver Partner - 21 Dec 2013 in Feature Requests | Submitted
We badly need per employee Xero pricing.

Every other payroll company I have ever known charged based on employees or transactions. Xero prices are now LIKE A like a STOPPED CLOCK, which is ONLY RIGHT TWICE A DAY.

The $30 one employee plan seems inexpensive, especially now that Xero says it will cover up to five employees. However, it is likely to be ridiculously costly, because it does not include direct deposit, e-file and e-pay options. Any payroll service without this is UNPROFESSIONAL AND IRRESPONSIBLE, not only due to the time wasted, but due to the federal and state tax notices and penalties that will surely result. It will ESPECIALLY HURT THE CPAs AND CHARTERED ACCOUNTANTS XERO WANTS MOST. My initial solution was to sign up many one and two employee clients at the $39 introductory rate, for the 10 employee plan. However, you could only do that until 12/8/13, as it then became $70 a month. $40 a month for e-services, for one employee, is RIDICULOUS! We MUST either have E-SERVICES IN ALL PLANS OR APPROPRIATELY PRICED SEPARATELY!

Yes, in this case ALL CAPS means I am really YELLING!

10 employees for $70, 20 employees for $90 and 100 employees for $180 seem reasonable, especially with the 25% discount I give even non-clients. However, the number of employees per month is often variable. The XERO STOPPED CLOCK PRICES make 11 employees for $90 and 21 employees for $180 EQUALLY RIDICULOUS!

The very good Zen Payroll add on is $29 for one employee, $57 for 11 employees and $77 for 21 employees. The corresponding price for the AccountantsWorld payroll, which we can easily integrate, would be under $20, regardless of the number of employees.

XERO IS NOW HURTING ALL SMALL USERS AND PROFESSIONAL ACCOUNTANTS, by making us either CURSE XERO for wasted time, tax notices and penalties OR EXCESSIVE FEES. WE CANNOT START ANY NEW CLIENT OR RENEW EXISTING CLIENTS AT CURRENT XERO RATES, even though Xero seems to have the best payroll program. Most companies start payroll on January 1, so fast action is essential. It is also essential because no one should now enroll any new clients (or renew existing clients) in Xero payroll.

PLEASE VOTE for Per Employee Xero Pricing (not the RIDICULOUS ALTERNATIVE) to change this quickly and share using
12 Replies
I agree. With our current cloud payroll system we pay per employee across all our clients. Payroll from xero won't be here in the UK for a while but you have my vote.
Stephen Quay 21 Dec 2013
Thank you very much Stephen. I promise to give you my vote at every opportunity.
@Mike, I was a bit indifferent to this topic until I stopped to think about it. Al the payroll processors I am aware of either charge per employee, or by a small group (1-5, 6-10, etc.). My payroll processor charges by the payrun with a base charge, depending on whether it's weekly, etc., then a small upcharge for every employee over 10. I now agree that Xero should change it's pricing. I think inm the long run, as well as the short run, this will cost a lot of business for us all.
David Goldstein 22 Dec 2013
@David I also was indifferent until I thought about it. The current system will certainly cost us lots of business. It will make me take every new, upgrading and renewing client off Xero payroll. This could make many drop Xero or me entirely.
@Mike, I really hope that Xero is watching and listening. Not sure why they devised their way of pricing payroll, but it will cost them dearly. Just wait until you hear the complaints after the one year @$39.00/mo going to will be a very loud sound.
David Goldstein 22 Dec 2013
I cannot edit my original Feature Request, but we need separate charges for all types of features and entries, not simply payroll.
I added my vote, because it *is* an important feature. Also, I mentioned it, as did others, during the Xero U.S. Roadshow. As Xero's rolling out the payroll feature in bundles of states, I decided it was best to continue processing payroll as I currently do.

And, I'm neither a CPA nor a CA, but I believe that bookkeepers are also going to feel the limitations of the Xero payroll offering, in its current state.

I believe Mike's feedback/constructive criticism is going to better inform the Xero developers, as they work to identify & resolve issues raised. Let's hope for more votes!
Paula Small 23 Dec 2013
@Paula, I agree with everything you said. And, of course, I voted as well.
David Goldstein 23 Dec 2013
Thank you to all who voted. We are moving this rather quickly. Now we each need to find (10?) friends to vote.
I am both a QB ProAdvisor and a Xero Certified Advisor. I recently switched to Xero for my own company's accounting. I guess I don't understand why Xero is only charging $29 for the monthly business subscription, yet over twice as much for payroll. Seem kind of counter-productive in getting people to switch. I have a hard time believing that there is that much incremental cost per employee that would justify such high prices.
Dennis Thompson 23 Dec 2013
@ Dennis: YES! That is exactly what I meant when I said that Xero prices were like a stopped clock (only right twice a day). Hit a sweet spot and Xero beats all competitors. Otherwise, the incremental cost of one entry, employee, e-service or multi-currency ridiculous. Since no one can have exactly the bracketed number of items, month after month, the desire for simplicity is making Xero and its Advisors completely non-competitive 99% of the time.

It is especially crazy because Xero has done such a terrific job with add-ons, by helping us get exactly what we want. However, it now refuses to treat each of its own features and entries as an itemized add-on.


Yes, I did vote for your petition. BTW, I enjoy your posts on Twitter regarding the pros and cons of Xero vs QB and QBO. I like QB, but I believe that Intuit as a company is handicapped by having to divide their attention between the past (QB Legacy Desktop Users) and the future ( the Cloud) whereas Xero is more tightly focused on the future. Seems like it is kind of hard to do both.
Dennis Thompson 24 Dec 2013


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