Saturday, October 18, 2014

Xero vs Intuit: David and Goliath in the 21st Century – Niche player or Cog Maker?

IANAPPERLEY for Whatisitwellington.com writes: By the share price, Xero looks like it is on a bit of a slide against Intuit. Share price isn’t everything of course, though it is a good indicator of the way that investors think about a company. Xero is about against a Goliath, with multiple products, a twenty five year history, and has more than twenty one million customers across different sectors including small business accounting, health, farming, and finance. Xero is a David, a want to be King, from farming stock, a noble warrior and musician, who had the confidence to bring down the giant.
xero
Xero Share Price – Twelve Months
intuit
Intuit Share Price – Twelve Months

Xero. Born in 2006 in Wellington, went to the share market in 2007, entered the Australian market in 2011 as well as the United Kingdom then invaded the U.S. in 2012. Has made some acquisition of companies that have furthered their footprint in different markets. Born in the Cloud, Xero’s advantage is seen that it doesn’t carry the heavy legacy of an old-fashioned software development life cycle, such as Intuit, along with a strong ethos on the API. That allowing data to be automated across a number of different providers from banks, to time sheet systems, customer facing services of large companies, and the like. Xero claim 300,000 customer across 100 countries supported by 1,o00, and growing, employees. Xero’s operating revenue was $70 million as of March 2014.
Intuit. Born originally in 1983 it now has pedigree of over three decades. It carries a current seventeen products with a claimed customer base across of those of more than twenty-one million. Intuit has acquired over twenty five companies in it’s time, the bulk of those in the last decade. Intuit has an operating revenue (2013) of $4.1B. The company’s strategy is to migrate it’s customer base to Cloud, as a lot of it is still desktop based with all the drag that creates. But, by the numbers, it’s slightly larger than Salesforce.
The war for this slice of the sector is hot. There are dozens of products in the market. Intuit lists ten competitors that are a threat, including Xero. The value of that slices is in the mega-billions.
Xero beats Intuit in a very important area. Agility and start-up mentality. When you are born with that culture, you have a competitive advantage over any company that is not built in the same way. Xero can move quickly to market with new product and new innovations. However, as it grows, this will slow, and the balance of sales, versus market, versus acquisition, the overhead and cultural change that comes with massive people growth (see Z Energy for reference), and a single dear leader, present areas of high risk that will have to be very carefully managed.
Intuit is old-school. CEO Brad Smith recognises the need for that new culture;
““We want to be a 30-year startup,” he said. “Everybody in the company is a founder. Everybody in the company is an entrepreneur. Everybody in the company has the ability to improve products and come up with new ideas that we will commercialize.” – Source
I am not sure that you can turn that boat fast enough. While Intuit has mass, the ability for it to turn on a dime like Xero, while restructuring itself, is going to be less.
The war across this software area is no different to Cloud. It comes down to price point for consumers, a strong API market, and new features, packaged in a stylish way. Intuit could eat most of that market simply by dropping their price. They could run that way until 2017, when they will have their customers mostly on Cloud. Xero, and other competitors, are not going to be able to run at low revenue (or in some cases a loss) for a long time. They will simply go broke.
In this product market, there are really only two kinds of company. Those that are creating a niche product, a new machine, and those that are creating cogs for an existing machine. Many start-ups now recognise that there is little point in attempting to create niche products, it is incredibly rare that these markets exist. What they recognise is that they can make a better cog in the machine to displace other cogs. Ultimately, the machine, will come along and acquire the new cog that they have created. I.e. They get bought out.
Interestingly enough, some very large multi-nationals in the ICT sector have figured this out and are starting to break their companies into pieces on this basis. Niche or cog. Cog to be sold off, niche to be their new future.
Ask yourself, which is Xero? A niche player or a cog maker?
Only time will tell, but for now, the smack-talking continues and the battle is yet to really kick off.
Posted on 9:42 PM | Categories:

CEO of XERO Rod Drury, "It's not the big [Intuit] that eats the small [XERO] it's the fast [XERO] that eat the slow [Intuit]" CLICK TO LISTEN

Over at RadioLive we listened to an interview with XERO CEO Rod Drury.  Mr. Drury talks about what distinguishes XERO from Quickbooks Online and Xero's advantage over Intuit at about 6:30 into the interview. To Listen to Rod Drury interviewed, click here.   @ 07:35 into the interview Mr. Drury summarizes his arguments with a reference to laws of nature and the animal kingdom by saying, 

"It's not the big [Intuit] that eats the small [XERO] it's the fast [XERO] that eat the slow [Intuit]".


We're guessing no one ever told Google or Microsoft this. 

Posted on 9:30 PM | Categories:

Rod Drury finds business fun and interesting, even when the Xero share price has dropped and his net worth has declined by hundreds of millions.

Michele Hewiston for The New Zealand Times writes: On Monday Rod Drury, the technology entrepreneur and chief executive of Xero, the small business accounting software company, was sounding very chipper. He always does, no great surprise there. There was that little matter of his company's shares having dropped seven cents overnight, he said cheerfully, but was he worried? Was he, hell. He doesn't worry or panic and he is almost always cheerful and optimistic, as you'd expect from somebody who regards, and markets, his software as "beautiful". You don't often hear the words "accounting software" and "beautiful" in the same sentence but he is out to change the world. What am I talking about? He has already changed the world! "We have just transformed the accounting industry, you know!" he said. "People wear T-shirts now! They get excited about accounting!"
He does get excited about some unlikely things. Why is the profile picture on his Twitter account of him wielding a large axe? "Oh, that was just such a great photo. It's a Finnish splitting axe. It's a whole new technology for axes.

I just mentioned it on Twitter and one of our investors sent me one." Why did he want a Finnish splitting axe? "I didn't want a Finnish splitting axe. I just thought it was cool."

Not so cool, you might think, would be going to bed and waking up the next morning to find himself - probably, he said he didn't bother doing the calculation - hundreds of millions of dollars poorer. But not really, of course, he said, because it's all on paper and so it isn't real. Still isn't it terrifying to wake up in the morning and find yourself hundreds of millions poorer, even on paper? "No. That's just fun. And it's interesting." Fun! Interesting! The very rich are very strange. He mentioned meeting Richard Branson, who I have also met and who, I said, is a very strange chap. "Yeah. Yeah. They're all strange cats," he said. Is he? "I don't think so. I think I'm pretty real. I've got my feet on the ground. I don't take it too seriously. I think it's all kind of full of humour and fun. Yeah. Yeah. Even though this week probably hasn't been our best week, it's all just part of the process. It's just the work it creates when you've got somebody who doesn't really understand what's going on throwing stupid stuff out there and then the phone calls start coming in."
That didn't sound like a lot of fun, or humour. He was talking about a chap I mentioned hearing on the radio who had said that there were questions about whether Xero could cut it in the United States and whether they should be there at all. What a fool of a man. He gave him a little slap. He was from Wellington, so what could he know?
"We've explained exactly what we're doing ad nauseam and then you have these people say things like: 'You should just pack up and go home.' And it's like: 'What?' Global domination! But slowly. That's the catch cry. To go out there and build not just a great New Zealand company but a great global company is just f***en awesome!"
To anyone who doubts him, he just says: "What?" And goes on his stubborn way. Stubborn was my word. He said: "I'm not stubborn to the point of stupidity. I'm not blindly doing what I want to do. I've logically thought it out and we make changes to strategy every two minutes."
He shared his "favourite saying". It is: "It's not the big that eat the small; it's the fast that eat the slow."
Is he a strange cat? He doesn't talk like any chief executive I've met, which is to say that most don't say f***, rather a lot, at least not to journalists. His second favourite saying is that economical: "What?", intended to convey either incredulity at stupidity, or vast excitement. He is not a flash talker but he is a fast talker. He loves talking and that he now does it for a living, really, is a sort of triumph in itself because he was a terrible stutterer, until cured of it in his late 20s. He lives, famously, for the head of a global company, in Hawkes Bay and had come to Auckland to give a talk for International Stuttering Awareness Day, among other appointments, so we could meet for an interview on the Thursday. He wanted to meet at a cafe near his Auckland office so that he could have his favourite scrambled eggs. I said I'd shout him breakfast. He didn't demur. When the photographer arrived, he asked if he'd like a coffee. That was a very kind offer, the photographer told him later: "When Michele was paying!" That was a bit of humour. I grumbled about rich people and he said, not for the first time, that he was poor. "I've got a mortgage!" He and his wife, who used to be a dentist and now stays at home - he wouldn't tell me her name because "she's private"; but as her name, Anna, has been in plenty of other interviews, I have no idea why he refused to tell me - have a nice but not lavish lifestyle. There is the nice, but "not stupid" townhouse in Havelock North and a very nice beach house 20 minutes away. I thought he had, oh, anywhere between $120 million and some other stupid amount of money but he said he's sunk it all into Xero.
He had sent an email changing the interview time because he'd had to change flights. "Regions getting screwed." Didn't he have a private plane? "Why would you have a private plane? Planes come up here all the time." He might hanker after one, for showing off purposes. "Why would you do that? I'm not a show-off. I'm not a shower-offer."
He has some silly cars and a very silly watch, the biggest I've ever seen. He said that it's his "sales watch" and he got it before the days of internet networking when, if you were a bloke turning up at conferences: "You can only have some nice shoes and a nice watch if you're trying to do deals. If you turn up with a Swatch or a Mickey Mouse [watch], say, they won't take you seriously." His is a Breitling and involves an enormous number of mysterious gadgets and symbols. What are all of those things? "I don't know how it works. I don't even know how computers work, to be honest. I don't know how they get stuff on screens. I can write programmes. I've got no idea, actually, of the physics of how they work. It's just magic to me."
I was trying to figure out how the inside of his head works, but it's still mostly magic to me. He likes, I think, to say unexpected things and to do things you wouldn't expect a chief executive to do. It's his image. He's a socialist. He must be because, he said: "Well, I think we're all socialists in New Zealand. We all want free education and really good hospitals ... and a prosperous society." He voted for John Key's lot. That well-known socialist. "Yeah. He is. Clearly!" I asked what schools his kids go to (they have two girls and a boy) and he said the local schools so perhaps he's a bit funny about the local school, for the boy, being the private school, Hereworth. They don't get any pocket money, he said, the miserable bugger, but they do all have iPads and the nice beach house. He worries about spoiling them.
He said: "I think of myself more as a skateboarder. As I'm walking around, I'm mentally skateboarding everything." He showed me a video on his phone. It was of him skateboarding at a conference. "We did a massive conference in Sydney. 1330 accountants. 24,000 square metres of polished concrete. That's all I saw. What! It was fantastic. So I skated all around. I got told off by the building manager." We watched the video. I wondered who had filmed it. "One of the video guys gave me a pole to race around on. It's kind of hard to fit two on a skateboard." That was a really stupid question. I tried to think of an intelligent one, about skateboarding. What was his best trick? "Not falling off. My self-preservation circuit is really well-defined."
He likes an interview to be fun, to a point. He got his coffee in a takeaway cup. Was that in case he wanted to make a quick getaway? "You might be boring. I think I can hear my mother calling."
The photographer asked him to sit on some stairs for his picture and he said he didn't sit on stairs. He didn't give an explanation, but it can't have been that he was worried about ruining a good suit because he wasn't wearing one. He was wearing what he always wears, "the uniform": jeans and a shirt and no tie, a jacket and pointy shoes. He gets the shirts at 3Wisemen: "Three for a hundy." I muttered, again, something rude about miserable rich people and he said, possibly affronted, that they were very nice shirts.
I asked what he wasn't good at because he is good at everything including, but not exhaustively: slapping people on Twitter, PR, surfing, skateboarding, ironing shirts. "I spend all my time ironing shirts. If someone could invent a shirt that doesn't require an iron ... " He is very good at making scones. "I make the best!" He is good at cooking, of course, and cooks when he's at home. I asked what he cooks and he gave me a withering look: "Well, everything." I was asking boring questions. I was supposed to be asking about global domination, but there was really no need for me to. He says he doesn't enjoy his high profile and had never sought it, particularly, but another thing he is very good at is having one - and giving every appearance of enjoying it.
He gets into spats on Twitter - including one with Dotcom, which he now refuses to talk about - and he says people accuse him of being arrogant and of having a thin skin. He isn't, and doesn't, he said, not that he cares. "It's like water off a duck's back." But he does whack back, so why, if he doesn't care? "Why wouldn't I? It doesn't mean you can't defend yourself ... I think once you know me, I'm just a guy."
He claims he'd prefer to be the "silent number two" in a company, but he does like a bit of humour.
He's not a show-off, but that's not the same as being capable of showing off to get noticed. The skateboarding stunt at the conference was his idea of just a guy having bloody good fun, but it was also good for getting attention for his "anti-corporate brand". A private jet would just be boring. And how many other skateboarding bosses were at that conference? Exactly the same number who would cheerfully turn up for an interview the week their company was the lead item on the radio news for less than cheerful reasons.
Posted on 5:51 AM | Categories:

Ten Best Time and Expense Tracking Apps for Freelancers

 Todd Spear for GetApp.com writes: As a freelancer, you have a to-do list that is a mile long. There’s the work itself, whether its graphic design, writing, editing, or anything else. There’s going over briefs and interacting with clients. There’s keeping your workspace organized, which is no small task. There’s the never ending struggle to make some free time for yourself and your loved ones. And, on top of it all, there’s the part where you keep track of your time and expenses, send invoices, and collect payments.
As you know, that’s where freelancers often run into trouble. Invoicing itself is often time consuming, leading many to procrastinate. Then there’s the part where you have to keep track of unpaid invoices, chase down delinquent accounts, and report all earnings on your income tax return. Sigh. This side of things is the one part of the freelance lifestyle that absolutely no fun at all. It is all part of the business of freelancing, nonetheless.
But wait, there’s hope! We’ve put together this list of the top ten time and expense tracking apps for freelancers. These apps bring together tools to help you keep track of the no-fun bits, from invoicing to expense reporting. Here are our picks:

workflowmax time-tracking appWorkFlowMax

WorkFlowMax is a Xero product, which, right out of the gate, has the benefit of aligning time tracking, expenses, and accounting (if Xero happens to be your accounting app of choice). What’s even more compelling is that WorkFlowMax is intensely capable of handling freelance jobs from handling the incoming lead, to performing the work, right down to reconciling the paid invoice (if you’re taking advantage of built-in Xero integration). the paid invoice. WorkFlowMax is $15 per month. A free trial is available.

timesheets time-tracking appTimesheets.com Time Tracking

Timesheets.com Time Tracking is a Web- and mobile-based replacement for the paper time sheet. It’s as simple as a punching the clock, minus the clock! Timesheets.com is highly scalable, allowing you to track overall time while reporting specific hours to individual contractors. That makes a time and expense app of obvious benefit for freelancers. Timesheets.com Time Tracking is $9 per month. A free trial is available.

Xpenditure expense tracking appXpenditure

Xpenditure, as its name implies, takes the pain out of expense tracking for freelancers. Perhaps the coolest feature of Xpenditure? Digitizing receipts. That means no more tucking paper receipts into an old cigar box (you know you’ve seen it happen!). Xpenditure keeps up with your receipts and it even exports to your accounting app of choice for full-scale financial reporting with ease. Xpenditure is $5 per month. A free trial is available.

Shoeboxed expense tracking appShoeboxed

Shoeboxed is another solid expense tracking app, and it even references the receipt-stuffing phenomenon we mentioned earlier. What we love most about Shoeboxed is its tight mobile integration. It also has a deep Quickbooks Online integration for your expense tracking plus small business accounting. Now you can keep up with your expenses entirely from your iPhone! Shoeboxed is $9.95 per month. A free trial is available.

Harvest time tracking expense tracking appHarvest

Harvest is a very popular time and expense-tracking app. Aside from its simple, intuitive interface that tackles time tracking and invoicing, Harvest adds a wide range of integrations with third-party apps including Xero, PayPal, QuickBooks Online, and a whole lot more. Harvest is $12 per month. A free trial is available.

chromata time-tracking appChrometa

Chrometa is a time-tracking app for those of us who might need a little help staying on task. You see, like a built-in Orwellian “Big Brother,” Chrometa logs your activities, automatically identifying your billable activities and reporting them. Now that’s one way to cut out some of the time you waste reading Reddit and looking a cute cat videos on YouTube! Chrometa is $19.95 per month. A free two-week trial is included.

motiv business management app for freelancersMotiv

Motiv is a little different from the other apps on our list. Motiv aims at being a business management app especially for freelancers. In addition to time and expense tracking, Motiv adds quoting and electronic signature capture to the fold. That makes Motiv one of the ablest apps for freelancers around. Motiv is $5 per month.  A free trial is available.

sellsy time-tracking appSellsy Time Tracking

Sellsy Time Tracking is a time tracking app that makes it easy to keep up with one highly important aspect of your business: profit. Sellsy Time Tracking records time and reports it against margin, so you always know the bottom line. Sellsy Time Tracking also makes recurring billing easy as pie. Sellsy Time Tracking is $30.90. A free trial is available.

nutcache free expense tracking time tracking for freelancersNutcache

Nutcache is a handy tool for keep track of time and expenses for free. That’s right! What freelancer doesn’t love the word “free” when it comes to the apps you use? Built on open source technology, Nutcache handles time tracking, invoicing, and expense tracking. Nutcache is free. Really.

IBE.net freelancer business management iBE.net

iBE.net is a bit like Motiv, only its aimed at small businesses as well as freelancers. The app is fully cloud-based and it expands beyond simple time and expense tracking to provide more complex workflows and analytics, too. iBE.net is also highly customizable, so if you have unique needs as a freelancers, iBE.net may be your best bet. Best of all, iBE.net is free for up to three users. Paid plans for larger teams start at $70 per month.

Are you in search of a freelance time tracking and expense app that meets your needs?

Time and expense tracking are not reasons anyone starts freelancing. But they are tasks you have to tackle as a freelancer, so you might as well make them as simple as possible by choosing an app or two to help you get the job done.
There are probably as many different apps for freelancers as there are freelance occupations. If you have a unique job and need a specialized tool, be sure to check out GetApp’s list of all the best time and expense tracking apps on the market.
Here are some other neat mobile solutions built just for freelancers like you:
Posted on 5:37 AM | Categories:

Money Mistakes: Outsource Your Accounting Before It’s Too Late

Matthew Toren for Intuit Canada writes: Small business owners like to keep costs as low as possible and are notorious for handling too much of their business themselves to save money. Don’t make this mistake! It makes more sense to your bottom line to hire qualified professionals to handle your finances; a bookkeeper and accountant are essential partners.

Why Both and When?
You should meet your bookkeeper biweekly or monthly to help with day-to-day financial activities. An accountant is an important resource, not only at tax time but also for regular financial planning and forecasting. These should be among the first members you add to your team, even if you don’t hire them as staff. While most small businesses don’t need to hire an accounting professional fulltime, that doesn’t mean you should do it yourself. Outsource these two vital roles and enjoy the benefits. When? Right now.
Here are a few important ways that bookkeepers and accountants work together to your advantage, as well as how they differ.
Keeping You on Track: Your Bookkeeper
Don’t spend the time and endure the frustration of managing your own books. While you should always be overseeing and checking in with your bookkeeper through regular updates and reports, actually doing the work of a bookkeeper is not in your best interest.
What does a bookkeeper do? A good one does more than just input your monthly expenses and income, although that’s certainly an important aspect of the job. Your bookkeeper should be your part-time partner and keep you up to date, providing most if not all of the following:
  • Accounts payable
  • Accounts receivable
  • Bill payment
  • Detailed general ledgers
  • Payroll and check registers
  • Bank reconciliation
  • Financial statements
  • Customized reports
  • Budget preparation
  • Business and workers’ compensation insurance
  • Employee health insurance
  • Payroll services
  • Payroll cheque writing
  • Payroll tax returns
  • Monthly, quarterly and annual payroll reports
  • Federal, provincial and local tax reports and filings
  • Business tax returns and tax planning
  • Income tax returns
  • Tax representation in the event of an audit
Many of these capabilities will overlap with what your accountant does, although the bookkeeper provides your financial foundation. Much of his or her work will feed into a larger, comprehensive accounting function that your accountant will complete – the most important part of which will be your corporate and personal taxes.
Piecing it All Together: Your Accountant
You might think a bookkeeper and an accountant are one and the same; they’re not. You will need an accountant for probably even less time than a bookkeeper, but when you do need one they’re invaluable.
Accountants help you through your quarterly tax requirements and annual tax filing. A bookkeeper isn’t qualified and shouldn’t be doing that for you. In fact, a bookkeeper should be tracking everything in a program like QuickBooks to hand over to your accountant when the time comes. Most of your bookkeeping reports will be crucial information your accountant will use to perform your annual corporate and personal taxes.
Some specific things your accountant should do on your behalf:
  • Examine all financial statements from your bookkeeper to ensure accuracy
  • Ensure financial statements and records comply with local and federal laws and regulations
  • Compute taxes owed and prepare your final tax returns
  • Inspect your account books and accounting systems biannually or more frequently
  • Organize and maintain financial records, in addition to what your bookkeeper does
  • Improve businesses efficiency where money is concerned, such as advising you on large corporate purchases, pointing out shortfalls in your business cycle earnings, and assisting with corporate financial planning
  • Advise you on ways to reduce costs, enhance revenues and improve profits
  • Provide auditing services for your business when necessary
Your accountant will also offer guidance on long-term financial projections and help you with any new tax laws or changes to existing ones. You must have an accountant!
Finding and Qualifying Your Bookkeeper and Accountant
Because you’re handing over your financial data and account information, you want a reliable bookkeeper and accountant. The best way to find them is via a recommendation from someone with a similar-sized business. You want the endorsement of an owner you trust. Ask your referral sources how long they’ve worked with these individuals and about their accountant’s and bookkeeper’s timeliness, cost structure and availability.
A recommendation is essential. Ask entrepreneurs you respect for theirs today.
A few key things to know before contacting a bookkeeper or accountant:
  1. They should be licensed and bonded and current in their certifications
  2. They should be willing and able to provide current and past references
  3. They should discuss their scope of work and pricing with you up front to ensure they offer the services that meet your needs
Finally, if you’re not sure where to get started and you don’t have access to other small business owners in your area, contact the Small Business Association of Canada or the Chartered Professional Accountants of Canada to get references and start finding the right people for you.
Posted on 5:32 AM | Categories: