The tenor of the comments were writing Xero off as a market contender for Small Business Accounting here in the US. Here are my concerns:
Our community very much needs a direct competitor against Intuit, who has been slumberingly lethargic for way too long. Xero's coming on to the market scene here in the US has made Intuit stand up and take notice in a good way and we are all benefiting from that right now. (If Xero hadn't come to town, would there have been an QuickbooksConnect this year? I wonder. . .) When starting my practice, I quickly embraced the ease of online accounting software, starting with Quickbooks Online in 2010. I realize that makes me a newcomer compared to many of you, but my newness also affords me a fresh perspective. As a ProAdvisor, I respect the functionality in Quickbooks desktop and even though I know enough to probably make Quickbooks desktop version 'stand on it's head,' I quickly got bored with it because it affords zero flexibility when trying to collaborate with other stakeholders in my clients' financial success - one of the core values of my practice. I was an advocate for Quickbooks Online when most of my colleagues were hating on it and participated in the "experience design" focus groups for the Harmony development.
Then Xero came along. After flying up and meeting the company in San Francisco 2 years ago, I was so energized and excited about another online software that I could deploy to service my clientele. I was and continue to be totally psyched about what Xero has to offer small businesses.
When recommending accounting software solutions to my clients, I think it's very important to remain completely vendor-neutral. Both platforms have strengths and weaknesses that need to be considered. For example, Xero is a good fit for clients that are starting from zero accounting records and you have to completely reconstruct a set of accounts because you can pre-code everything in Excel and upload it - with a zing! (Ah, the satisfaction of watching the transaction count increment before your eyes with a confirmation message that hundreds of transactions have imported and are all reconciled - there's nothing like it!!) But I did have one client who was pretty disengaged with her accounting and just wanted to 'dabble' occasionally with recoding miscellaneous small transactions, so we actually moved her back to Quickbooks desktop (and I happily transitioned that client on to another accounting firm) because the register view shows the account much more transparently than what happens with Xero. And then there's payroll solutions. I will admit that I had 2 Xero payroll clients this year and next year I'm taking them both off and putting them into payroll solutions that integrate with Xero. Intuit Online Payroll is the most robust payroll service for serving small business needs and the integration with QBO is beautiful, I have to say.
But let's talk about Inventory for a moment. While Quickbooks never has really claimed it's inventory functionality as a selling point, the third party inventory solutions for Quickbooks desktop are costly, unwieldy and hard both to implement and maintain. Xero doesn't do inventory either, but that's where the ecosystem comes in. Right now there are at least three (3) vetted, robust inventory solutions that work with Xero and more are in development. A quick check online in the QBO apps just now shows 3 companies, two of whom I have never even heard of. Quick note on that topic - the legacy inventory app provider for Xero (who I am moving one of my inventory clients off of in 2015 because the newer players work better) just announced that they are focusing on developing for QBO and so not putting the resources into their Xero functionality. To me, that doesn't inspire confidence - more failure to develop the main solution completely before moving to supporting a second platform.
Which is my main gripe with QBO - Intuit continues to fail to develop it's solution to completion, from a functional standpoint. Since 2010, there have been two persistent, basic functionality issues: 1. The reporting doesn't pick up memo detail from the memo field that shows in the main register view. So to ensure that you get the fullest detail in reports (which Intuit software does excel at - detailed reports), you have to OPEN EACH TRANSACTION you are coding (how many clicks is that - 2? 3?) and put the detail in the description field down in the distribution lines of the transaction. 2. You can't round and group time billing transactions in QBO like you can in Desktop.. Which is why, for my business, I am still in Desktop and have to pay $100+ in extra fees per month for a hosting solution (so dinosaur! so 1990's!) so that my employees can log their hours into our company file as well. If QBO wants to make friends with bookkeepers, why haven't they figured out how to do this yet so that we could all move our own company books into QBO and add weight to our recommending it to clients? Especially should this be the case since their target demographic for the software is service-based businesses.
And don't even get me started on the failures of Harmony to deliver efficient functionality. When I use it, I always feel like I'm fighting Interface: fancy icons, dropdowns and screen transitions - more like a Powerpoint presentation than an accounting solution, with just a touch of social media (the timelines - which I never even look at). I've signed up for the QBO Accountant Beta, so we'll see what that experience brings to light.
I must say I'm having a difficult time understanding why some are saying that 'the Xero work has dried up.' Could you be losing touch with what's going on out there? Here in Southern California, my phone has not stopped ringing from business owners looking for support in Xero and an interesting demographic is coming to light: The calls I get for QBO help usually come from small business owners who are more naive when it comes to accounting. They want to be led. The people who come to me about Xero are young, globally inclined, savvy and have more innovative business models than the other side. In Xero we are doing things like multi-currency, multiple warehouses in different countries, multiple e-commerce platforms and payment methods, franchising, consolidated financials, vendor self-service where they login and post their own bills, etc. This is where I want to be: keeping my finger on the pulse of what drives entrepreneurs and innovators and leveraging the cloud and the global market to serve their needs.
And here's a question I would like to pose to Michelle Long: Since you "value your independence highly" and "are not paid to promote Intuit" but are no longer endorsing Xero, I would like to know just what other non-Intuit general ledger accounting solutions are you recommending for small businesses?
I don't know what is leading to Xero's current downslide in the US. Whatever it is, I sincerely hope they figure it out. Our industry needs another option than just Intuit.
