NetSuite to Take on Xero, MYOB, Reckon in the Small Business Market / Australia & New Zealand

Sholto MacPhearson for BoxIT writes:

• inShare8

• Accounting-only version to launch with payroll, bank feeds, local support
• JCurve Solutions has merged with a public company to drive growth
• Costs $49 a month per user  

NetSuite, an enterprise business management program used by global companies, will soon relaunch a simplified version for small business customers in Australia and New Zealand through Australian partner JCurve Solutions.

The entry-level program, due within two weeks, would include a free online trial, automated bank feeds, payroll and an Australian 24/7 support centre. The program would be marketed as JCurve Go to businesses that wanted to expand their business from a handful of employees to 100 or more (see JCurve’s TV commercial at the bottom of this post).

Businesses that outgrew JCurve could move invisibly to the full NetSuite program. “The biggest differentiator for JCurve and NetSuite is that  seamless transition from one or two people to 100,000,” said Mark Troselj, NetSuite vice president for Asia Pacific.

This was the second attempt by JCurve to crack the lower end of the market. JCurve Solutions acquired an exclusive licence in 2009 to promote a small business version of NetSuite in Australia and New Zealand. The company had spent the first four years “learning to walk” by simplifying the NetSuite interface to suit small businesses, said Graham Baillie, managing director of JCurve Solutions.

JCurve’s initial approach was to build a software “wizard” to help businesses move across from their accounting program to JCurve, an enterprise resource planning (ERP) application which included a customer database, inventory and e-commerce portal as well as an accounting engine.

However, JCurve underestimated the resistance to change by business owners who baulked at the complexity of an ERP, Baillie said. Businesses preferred to trial software before committing and were put off by the lack of a free trial.

“The big difference now is that we match Xero in features and price,” Baillie said. JCurve was modifying the program to encourage a stepped implementation from a basic accounting program to fully fledged ERP.

“It’s like when people get an iPhone. First they just make phone calls, then they send some emails, and then they start looking up things on the web. It’s a staged use of the tool,” Baillie said.

JCurve Solutions had merged with a publicly listed developer of phone expense software, Stratatel, to acquire “more horsepower and profile” to achieve its ambitions, Baillie said. The combined company had 65 staff and was led by Baillie, founder of outsourcing company Converga, and chairman Nihal Gupta, an entrepreneur with 30 years’ experience in consumer electronics and IT innovation industries.

While Xero had validated the market for cloud accounting software, Xero and rivals MYOB AccountRight Live, Saasu and Reckon One were too limited to help growing companies, Baillie said. “Accounting is only one part of a small business’ life. While they can add bolt-on applications, they’re not owned by the same company. Is the reporting the same? Who supports it?” Baillie said.

“This is a transitionary period. Eventually small business will wake up and realise they have an application that only does half the work. Those businesses that do it early enough are going to be the most dynamic in the years to come,” Baillie said.

JCurve had released a television commercial for the new program.

Do we have a tech bubble? / "Xero has risen in value by 436 per cent in the past 12 months and is worth nearly $4 billion on revenue of only $30 million for the first six months of this year"

Liam Dann for NZ Herald writes: Does New Zealand have a tech bubble? It's not an unreasonable question. High-flying tech stock Xero has risen in value by 436 per cent in the past 12 months and is worth nearly $4 billion on revenue of only $30 million for the first six months of this year. Listed biotech company Pacific Edge has soared 210 per cent in the past year and has market capitalisation of nearly $350 million but reported revenue of less than $1 million last year.

Last week another tech hopeful, GeoOp, listed on the NZAX. The initial public offer valued GeoOp shares at $1 each. By Friday they were already trading at $2.50.

Off market we also have a bunch of tech companies that are doing very well raising private capital for expansion right now. Our tech sector is hot.

Perhaps we need to pinch ourselves and remember that the hot bit isn't actually making money.

The top five technology stocks in the country by revenue are a pretty unsexy bunch. However, Fisher & Paykel Appliances, Datacom Group, Fisher & Paykel Healthcare, Tait Radio, and Gallagher Group pulled in combined revenue of nearly $3 billion.

But the hot stocks are where the growth is. Last month's TIN100 report noted that the software development sector saw revenue growth of 20 per cent versus growth of just 3.7 per cent across the industry as a whole.

New Zealand software companies, thanks in a large part to the trail blazed by Xero, have certainly caught the attention of US investors and that is helping drive the boom.

Let's call it a boom. The trouble with calling it a bubble is that it implies the companies themselves are full of hot air. And that's not fair.

The bubble, if there is one, is on the market. It is driven by too many investors getting carried away, not just about the prospects of the companies but about the chance of making quick gains on soaring stock prices.

By and large, what happens on the market isn't something the companies can control.

Genesis Research and Development is an example of a good New Zealand tech company, with good people involved, that just didn't work out. It got caught up in the tech bubble of 2000 and was briefly one of the hottest stocks on the NZX. It had shares that peaked at $8.48 in 2000. Last year the company ground to a halt with shares trading at 1.8c.

Genesis was a biotech company that had some promising science around the treatment of psoriasis. It had other technologies, too, but this was the one identified as the real commercial prospect.

When it listed, Genesis was entering the US Food and Drug Administration Phase II clinical trials for PVAC, a potential cure for the skin disease.

Unfortunately, the Phase II trial turned out to be make or break for Genesis. And the result was break. Despite a lot of effort to salvage some value from the remaining science it never recovered from the trial failure.

Xero is no Genesis Research. It has a product and customers, for starters. It is the quality of that product that has ignited the initial interest, and well done to those Kiwis who have been rewarded for backing it from the start.

But budding tech investors need to really understand what they are investing in and what the risks are. They also need to understand that the US investors driving local prices are often sophisticated investment funds with portfolios full of tech darlings from around the world. They can afford to see one or two go bust - in fact they expect that some will go bust and factor that in.

The cause for concern is that we will see New Zealand investors caught up and inadvertently perpetuating hype that they aren't really geared to cope with.

In the US right now there are conditions that aren't too dissimilar to the conditions during the tech bubble of 1999 and 2000.

The economy is emerging from a downturn and monetary policy settings are stimulatory - interest rates are low and borrowing is cheap.

But as conditions improve, investors start looking for good returns and need something to do with their money. If the bank is only offering 2 or 3 per cent interest then many will look to more aggressive growth funds, including tech-focused funds.

We're seeing high-profile players like Facebook and Twitter list on Wall St. While these businesses are more mature than some of the contenders at the turn of the millennium, they still have a way to go to justify their market value.

It is extremely cool that New Zealand's tech sector is on the radar as US investors get back into growth mode. The capital investment heading our way is good news for local companies and it is creating jobs.

But it has a side-effect of making things go a bit crazy on the market. We just need to keep it all in perspective and hold on tight for the ride, because there is every chance this boom is just getting started.

Don’t give up extra income for fear of change in taxes

Niel Brown for The State writes: Have you ever heard someone say, “I don’t want to make any more money because it will put me in a higher tax bracket”? I have and just shake my head because most people don’t understand this concept. They mistakenly think that moving to a higher tax bracket will subject all of their income during the year to this higher rate.

Read more here: http://www.thestate.com/2013/11/03/3073974/dont-give-up-extra-income-for.html#storylink=cpy

Your marginal income tax rate is the rate at which you would pay tax on your next dollar of taxable income. It’s also the rate at which your last dollar of taxable income was taxed. Your marginal tax rate depends on your filing status and on the level of your taxable income.

It’s important to remember that the marginal tax rate is not the rate at which all of your dollars are taxed. If you enter a higher tax bracket, only the portion of your income that has crossed the new threshold will be taxed at the higher marginal income tax rate. The rest of your income will be taxed at the lower rates applicable at those thresholds.

For example: Assume Mark is unmarried and has $40,000 in taxable income in 2013. That will put him in the 25 percent marginal income tax bracket (see table below). That means that the first $8,925 of his taxable income will be taxed at 10 percent, the next $27,325 will be taxed at 15 percent, and only the remaining $3,750 will be taxed at 25 percent.

Generally speaking, a marginal income tax bracket is the income tax rate at which you’re taxed for a certain range of income. Brackets are expressed by their marginal tax rate. Currently, there are seven marginal tax rates, as follows. The income brackets to which each rate applies depend upon your filing status: married filing separately, married filing jointly or qualifying widow(er), head of household, or unmarried.

A sample of the marginal tax rate schedules for 2013 are as follows:

10%

Single: $0 to $8,925

Married (filing jointly): $0 to $17,850

15%

Single: $8,925 to $36,250

Married: $17,850 to $72,500

25%

Single: $36,250 to $87,850

Married: $72,500 to $146,400

28%

Single: $87,850 to $183,250,

Married: from $146,400 to $223,050,

33%

Single: $183,250 to $398,350

Married: $223,050 to $398,350

35%

Single: $398,350 to $400,000

Married: $398,350 to $450,000

39.6%

Single: From $400,000

Married: From $450,000

Your marginal income tax rate is useful for calculating the income tax on additional income, such as the tax on a windfall or a year-end bonus. It’s also important for future tax planning. For instance, if you expect to be in a lower income tax bracket next year than you’re in this year, you might want to defer the recognition of some income until next year.

Although your marginal tax rate is a useful figure, your effective tax rate gives you a more complete picture of how much you’ll pay in income taxes over the course of a year. That’s because the effective tax rate takes into consideration any additional taxes you must pay (which increase your tax bite) and any income tax credits you’re entitled to (which lower your overall income tax liability). In contrast, your marginal tax rate involves only the specific income tax on your taxable income.

Your effective tax rate reveals the average rate of taxation for all of your dollars. It’s calculated as your total tax liability divided by your taxable income.

Example: Assume Mark is an unmarried taxpayer whose 2013 taxable income is $50,000. Mark is in the 25 percent marginal income tax bracket. His total tax owed is $6,608 (assuming no other variables). Therefore, Mark’s effective tax rate is approximately 13.2 percent ($6,608 divided by $50,000).

Taxes are not a fun part of life but bypassing income to save on taxes just seems like a bad financial plan.

Life is a journey; plan for it.

Read more here: http://www.thestate.com/2013/11/03/3073974/dont-give-up-extra-income-for.html#storylink=cpy

Roth IRA: Possibly the best tax advantaged investment ever

Scott Webb writes: Can you imagine an investment where Uncle Sam doesn’t tax you on your earnings? That is what the Roth IRA can do for you.

If you hold money in a Roth IRA investment for five years or until age 59½, whichever is longer, your principal and your earnings can be withdrawn tax-free.

Withdrawals of earnings made before age 59½ (and if the account is owned less than five years) will be subject to ordinary income tax plus a 10 percent federal tax penalty. Contributions to a Roth IRA are made with after-tax money.

If you and your spouse combined make less than $178,000 per year, you can each contribute $5,500 into a Roth IRA for tax year 2013. (For people age 50 or older, the contribution amount is $6,500 each for 2013.) You can still contribute to your 2013 Roth IRA until April 15, 2014.

If you have any investments that are giving you a large 1099 each February, talk with your certified public accountant or financialadviser about how to shelter more of those taxable gains. The Roth IRA is one way you can do this with earned income.

A little Roth IRAs 101:

If you and your spouse make more than $188,000 a year, there is one way you can convert traditional IRA money into a Roth.

You could start a nondeductible IRA for both of you for tax year 2013. You can then convert your traditional IRA to a Roth with no income limitations. You will have to pay only the tax on the investment earnings.

That conversion could be done in the same week, thus providing a great way for couples older than 50 to stash $13,000 in a Roth IRA.

Married couples who make less than $178,000 a year have a fantastic opportunity right now to put money in Roth IRAs. Single people making less than $112,000 are eligible for a Roth IRA also. Caution: Married couples filing separate might not be eligible.

Although we cannot predict the future, we do know tax rates are currently some of the lowest ever. That makes the Roth IRA even more attractive when you consider that tax rates will most likely go up in the future. The higher the tax rates, the better tax-free is going to be.

Let’s look at three wealth building examples using a contribution amount of $416 per month for 30 years, total contribution of $150,000. (That is the 2012 Roth IRA contribution limit).

After 30 years, your investment earning a 5 percent rate of return will grow to $347,000. If you earn an 8 percent rate, it will grow to $624,000, and a 9 percent rate will allow your investment of $416 per month to grow to $767,000.

Just imagine what you could do for your family with tax-free money. Remember, those are hypothetical examples. Investment returns and principal will fluctuate based on market conditions and investment decisions.

If you already have a Roth IRA, keep making monthly contributions. If you don’t have one yet, talk with a financial adviser about setting one up. Most will allow $50 per month through automatic withdrawal. Even small monthly contributions will add up.

Don’t spend your tax refund. Invest it in a Roth IRA to help you pursue the goal of retiring earlier. Begin taking charge of your retirement by starting a Roth IRA.

Tech bubble? Analysts see warning signs / "we just do not know whether Xero is a $30 stock or a $10 stock.”

David Williams for NBR writes: Concern is rising at an apparent recklessness creeping into listed tech company investments.  Some market professionals and commentators are already calling it a bubble, with all the history and prejudices associated with such a word.  Others won’t go that far – but they’re still shocked at the money being thrown at technology companies, without basic research being undertaken.

Everyone seems to agree it’s a phenomenon brought on by Xero’s [NZX: XRO] stunning rise (justified or not), which has created a panic from investors who think they’ve missed the boat. Somehow they think they’re best-placed to pick the next success story.

Wynyard Group [NZX: WYN], SLI Systems [NZX: SLI], Snakk Media [NZX: SNK] and GeoOp [NZX: GEO] have listed this year and there seems a solid pipeline of tech prospects waiting in the wings.

But there are concerns that part-time investors, who are probably more used to pumping money into companies such as Telecom, are now warming to high-risk tech companies when they really can’t afford to lose their original investment.

Xero, which had a recent share price surge on news of a $180 million capital raising, has a market cap of $3.76 billion, making it one of the country’s biggest companies.

Yet, this is a company which is yet to turn a profit and, according to Thursday’s cashflow report, had revenue of $28.7 million for the financial year’s first half, while lifting its quarterly cash burn to $13.1 million.

Tech company potential at those multiples are clearly making some advisers uncomfortable.
Compare Xero to retirement village operator Ryman Healthcare, which has the same market value. In the 12 months to March 31 it made an underlying profit of $100.2 million.

Fresh pause
What seems to be giving market watchers fresh pause this week is tech firm GeoOp’s NZAX debut.  The baby of Leanne Graham (ex-Xero), the company finished the week at $2.50, $1.50 above the offer price, with a market valuation of $68 million.   This from a company which had revenue of $124,000 for the year ended March 31 and recorded a loss of $312,000 in that financial year. By September it had 4500 customers.  GeoOp ticks the right investment boxes, it seems.

Tech industry commentator and investor Ben Kepes says he was told by a friend, who successfully raised money recently, if you want your New Zealand tech company to resonate with investors there are three key words you need to include in your pitch: Xero, cloud and Saas (software as a service).  GeoOp can tick all three boxes, while also having the added appeal of a high-profile chairman, Mark Weldon.

(It’s worth noting Mr Weldon managed to snare 2.56 million shares, or 9.4% of the company, when NBR ONLINE has been told the experience of average investors is that they were heavily scaled back. By Friday’s market close, Mr Weldon’s stake had appreciated by $3.84 million).
Mr Kepes is seeing warning signs. He says companies should be listing that have good fundamentals behind them.

“If we’re purely listing companies and giving companies good market caps because they are part of some kind of industry trend then there’s a huge danger there.”
Canterbury-based Mr Kepes, who has invested in 15 companies in the last few years, describes tech investments as “super high risk.”

His advice? “If you don’t understand it, don’t do it.
“I probably wouldn’t go so far as to say it’s a bubble but I think that there’s some shaky fundamentals in our market right now.”

Herd mentality
JB Were’s head of advice Barry McLauchlan isn’t so reticent.
He says the money being thrown at Kiwi tech companies reminds him of the kind of behaviour leading up to the wholesale collapse of internet companies in 2001.
“It’s like herd mentality. They see these great rises in the market and so you start taking phone calls from people who haven’t done any analysis on the company at all – they just don’t want to miss out.  That’s the makings of a bubble.”

The risk profile is high and the analysis is almost impossible, he says. But he’s big enough to admit he might be wrong.

“On the plus side of Xero is that they’ve got some pretty heavy-hitting, tech-savvy funds and people who have put some money into it who understand that sector, who have taken a pretty good shot at it.”   Meanwhile, Craigs Investment Partners adviser Gretchen Williamson says small tech companies coming to market are unlikely to attract any interest from analysts, making it hard for people like herself to give clients a recommendation.

“It’s very difficult when you go and pick up the annual report to say, oh OK, they’re running at a loss but they’re valued at $20-30 million. That doesn’t fit any other logic – it puts something like 60-70 times any revenue, so you have to be future thinking.

“It’s simply not possible for me to give a recommendation on a sector that’s really still quite fledgling in terms of monetising and success and who’s going to be the best.”
Her three top tips for assessing tech companies are:

• Check the track record of management and endorsements from tech-savvy investors;
• How much cash does the company have and how quickly will they burn it;
• Recurring revenue helps predict future earnings, as opposed to one-off projects. Plus, it pays to check the margin on products.

Ms Williamson says there’s a different mindset with tech companies – it’s less about when it might turn a profit and more about how many customers it has and what value somebody else might place on it.

The money being thrown at tech companies reminds her of the mining boom. A company merely taking a passing interest in iron ore seemed to experience a share price rise, she says.
All in all, it seems a bit of a guessing game.

And JB Were’s Mr McLauchlan says uncertainty over tech stocks is making his firm more conservative.  “I would invest my clients’ money like I invest my money. I wouldn’t be putting my money there [in newly-listed tech firms].

“One of our jobs as an adviser is to understand the downside risks for clients. And we just do not know whether Xero is a $30 stock or a $10 stock.”

Online Revolution Killing QuickBooks Desktop, Xero Dominating

Mike Block of QuickBooks Xero Blog writes: In answering this Linkedin question, I concluded that the online revolution was killing the QuickBooks desktop program and that Xero was already dominating where it mattered most (online).

    On 08/08/13 2:35 AM, Peter Stannard wrote:
    ——————–

Hey Mike.

What do you think of Xero’s prospects in the US over the next 5-10 years?

Personally I feel they’ll squash Intuit as they have MYOB and others in NZ/AU and will eventually do with Sage here in the UK. I get the feeling you think the same way reading your blog?

    Peter
    ——————–

I told Peter I very much agreed and my answer would be my next blog post. Here is that delayed post:

Xero is getting new users about 50% faster than QB Online. It is the fastest, easiest, most beautiful (QuickBooks is now very unattractive) and least expensive way to do accounting, for most users. This is especially true if you use some of its many inexpensive add-ons. The number of Xero add-ons is growing very fast, while QB add-on ranks drop quickly. This relates to the free Xero industry-standard RESTful interface, compared to the expensive, proprietary, limited and repeatedly changed QB add-on interfaces.

You also should consider how fast Xero is adding employees (133% – 178% this year). Finally, we have a long history of fighting monopolies personally, besides fighting them with our laws. Despite this, we have had about 40 years of a virtual Intuit accounting software monopoly (QuickBooks and Quicken recently had 90 – 95% of the small business and home checking desktop software market). As a one-time QuickBooks insider, I know many cases where the lack of competition made QuickBooks delay or not implement many important changes. Therefore, we all have a very personal interest in seeing that QuickBooks and Quicken get much more competition.

You then must consider how long it takes accountants to test Xero, use it with a few accounts and learn it as completely as we know QuickBooks. This is partly due to the time it takes us to create many Xero account classification rules for each client. It is only after this that we will quickly switch many clients to Xero.Fortunately, my new 0CPAs program will soon virtually end the need to create new rules.

All this makes me feel we are now reaching a tipping point. Many marketing and scholarly articles say that, once 5% to 10% of a group make a change, it has roots (which you cannot kill). They also say that a 20% to 25% penetration makes a change unstoppable. The adoption of change rate actually resembles a bell curve, which starts slowly and then increases rapidly. After 50% adopt a change it gradually slows, as you begen to run out of people not adopting the change.

Online accounting software already has far more than 25% of the accounting software market. Therefore, the unstoppable online  revolution is now killing QuickBooks desktop quickly. It will soon get far worse. Xero now has about 40% of the Xero – QuickBooks Online area and is growing about 50% faster than Quickbooks Online. Most other online accounting competitors are not really competing with these two programs, either because they are much less powerful or much more expensive. Most QBO users also are former QuickBooks desktop users. The number of such potential converts is quickly shrinking. Even if QBO keep getting 40% of those abandoning QuickBooks desktop, it would top out at about 2 million users.

When you compare this to Xero, you realize some amazing things are very likely. As Xero gets better known, it is likely to get many more users from those abandon QuickBooks desktop. This alone should soon give Xero a million more users.  

Xero also already has the best foreign currency capability, while QBO lacks this entirely. Xero is already dominating online, where it matters most. It should soon have a massive increase in the number of users.

By the way, the stock market seems to know this. Two investment firms paid me to compare QuickBooks and Xero. I also see that Xero stock went up more than 200% this year, 600% in two years and 2,100% in 6 years, as U.S. investors now own 32% of the company.

Look Out Xero, Here I Come ! / Xero Roadshow - Follow-up

William "Bill" Murphy for Intuitive Accountant writes:  Well I am here in the ‘Big-D’, Dallas, Texas on the 29th floor of the Renaissance Hotel.  Tomorrow (which will be today by the time you read this) I will be attending the Xero Roadshow which is being held in what Dallas refers to as their ‘west end’, it is an area once noted for being primarily warehouse district that got converted into a cultural and entertainment district, along with some noted headline businesses.  Located just north of the JFK Assassination museum, the west end hosts a lot of events.  Alrighty that is enough logistics, except to say that from my room all of the west end and most of downtown Dallas proper is a bustle of light.

I must admit I have paid little attention to Xero, which they advertise as “Beautiful accounting software”.  

A few months back I wrote an article about the “New QBO” (QuickBooks online) which I referred to as ‘slick’. 

So I really will be interested in comparing ‘the beauty of Xero’ with 'the slick of QBO’ during the 

roadshow presentation.  Obviously this will be a case for further study as I ponder each product over 

a great cigar.  (Gary if you are reading this I expect my ‘great cigar’ to be a business expense; 

for those of you who don’t know, Gary is my Publisher.) 

Even though Xero offers free trials, I have not enrolled in a one (yet) because I wanted to see Xero

 in its entire unveiled splendor at this roadshow, but I find myself wondering 'what makes it beautiful’

 is it the color scheme, the simplicity, the essence of the interface? I mean let’s not forget this is ‘accounting software’.

By all accounts we are supposed to get an ‘early bird view’ of some of the great new features Xero is 

working on; they will also be introducing “their vision” for a new payroll feature including a firsthand 

demonstration of this functionality.  The Roadshow is also presenting what I think of as ‘marketing 

opportunities’, in other words how to take clients from shoebox to Xero (or QuickBooks to Xero, for

 that matter, I suspect.)  Among the virtual trinkets will be Xero’s training opportunities, practice 

management tools, and their partner program.  I wonder where those things will rank on a scale 

of Xero to Five, oops, I mean zero to five (me bad). 

Xero advertises that they are the global leader in online accounting with over 200,000 paying customers in over 100 countries.  While that sounds like a ‘big number’, if you consider it solely on a ‘math basis’, it is an average of only 2,000 customers for each of the 100 countries. I am sure that isn’t really their statistics, but I really wish they would give us some more specifics on those kinds of numbers. I mean we are accountants and to us, ‘numbers’ are our lives, “right gang”? Perhaps that can be a question I ask during their presentation, it will probably go over like a ‘Sooner’ in ‘Texas’.

I have done a bit of study on Xero, and one of the things I really want to see is their ‘bank feeds’ functionality. I admit, with hundreds of thousands of banks around the world, if they have bank feeds functioning for each of those 100 countries that is a really big deal. And they apparently also offer ‘real time’ exchange rates, that can be a real advantage if say someone in Texas is working on the same data with someone from Sydney, a case of virtual exchange where ‘yonder meets down under’.

I find the list of Xero ‘add-on’ products amazing; they have point-of-sale offerings that integrate, and CRM products, inventory enhancements, time tracking, and A/P and A/R interfaces. Just a lot of products for something 'so young'. Some of these are familiar names (I won’t hint as to which ones) that work with ‘the other guys too’, and some are as new as Xero itself, presently dedicated to that relationship alone.

I am looking forward to seeing something new and different, I have used the ‘same old thing’ for longer than dirt has been alive, or so it seems; and while I am not fond of change, it is all around me….heck, my iPhone is telling me that if I don’t upgrade the OS, it is going to boot me back to ‘windows mobile’.

I think everyone who regularly reads this publication knows that I am somewhat difficult to impress; something really has to be above par to garner my endorsement; and if you want Murph’s real enthusiasm it better be as ‘great’ as this H. Upmann cigar I am savoring.  So tomorrow is your chance Xero, here I come, ready or not. 

 Xero Roadshow - Follow-up

While they are fresh on my mind here are a few points for my readers from the Xero Roadshow. You will be hearing more about Xero from me in the days and weeks to come. I was pleasantly surprised with Xero. It was pretty well functional in most areas you would expect for accounting software, and it seemed fairly easy to use. - See more at: http://www.intuitiveaccountant.com/general-ledger/xero-roadshow---follow-up/#sthash.CecI3Qrj.dpuf

In my article leading up to the roadshow, I commented about their advertising slogan “Beautiful Accounting Software”, and quipped about their use of the word “Beautiful”.  Ian Vacin, Xero VP for Marketing & Product, quickly set those attending straight on this subject. Xero uses the term beautiful to imply a magical experience that puts “a smile on the face” of their users.  Many of their future promotional efforts will be centered upon conveying this experience.

Another of my preliminary witticisms dealt with the number of Xero users.  I learned that the vast majority of their customer base still lies within New Zealand and Australia, but a growing number of US and Canadian users are transferring their shoe boxes of receipts or migrating from other software, to Xero every day. Could Xero possibly be New Zealand’s next great success story, following the tremendous popularity of their wines?  Only time will tell!

The Xero approach to accounting seems slightly less rigorous than the step-by-step “QuickBooks way” which QB users must follow. The Bank Feeds, and preferred daily bank reconciliation, that Xero emphasizes is an entirely different way of approaching the day-to-day accounting chores, and differs greatly from QuickBooks, but seems to be consistent with the way that many small businesses actually deal with their finances.

Xero seems to be changing, adding and improving functionality almost every six weeks. One of the most recent changes is their new Files feature which allows users to attach documents to specific Xero transactions.

The Xero Roadshow is also premiering their new payroll functionality which seems to be on par with the kind of do-it-yourself payroll one would expect from a small business accounting package. Xero plans to roll out payroll on a state by state schedule based upon the number of Xero users in each state.  In order to promote their payroll function Xero is establishing an entirely new pricing structure that will make payroll affordable for many small businesses.  

I will be focusing my one good eye on the progress Xero is making to keep you abreast of Xero’s improvements as we go through the software’s features in future articles.