Xerocon 2013 notebook: Seen & heard
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It's not disruptive
Aaarrrggghhh. The "disrupt" word again. It's not the wheel, it's not fire, it's a new entrant to the SaaS market. Why does everyone have to describe their product as disruptive these days?
Well some are disruptive to be fair
But only when they crash and leave their users swearing and committing acts of violence on innocent pcs :)
Short-hand is not what it was
"An accountant working with external clients and data is not a compliance jockey" ....What? Short-hand naff or something lost in 12000 miles of translation?
How can "incumbent suppliers" of software sell to the accountant and to the user for use in the same books, wouldn't someone notice? Maybe me just missing something?
"We’e changed the technological architecture by having the software once. We don’t have to sell twice" .....What software are we talking about, the bookkeeping stuff or accountant's stuff? It's obvious a user is not going to pay Xero direct and also pay the accountant for Xero so I guess it's the latter, but what if the client is perfectly capable of doing 90% of their own accounts, or tax return, will Xero allow the accountant to enable the client as a user to do this? If not, what happened to collaboration as being the main benefit of Cloud working?
"There's not a client dimension to accounts production" ....unless they do them or sign them, or provide all the information for their preparation, then yes their accounts (or should that be our accounts) have no client dimension.
Oh we are "so" in for a few interesting years of disruption.
Clear as mud
"An accountant working with external clients and data is not a compliance jockey" ....What? Short-hand naff or something lost in 12000 miles of translation?
Agree, this doesn't make much sense and I think I said it, or at least the words it was based upon.
How can "incumbent suppliers" of software sell to the accountant and to the user for use in the same books, wouldn't someone notice? Maybe me just missing something?
I think the point was the existing model dictates that for every individual set of client accounts, there are multiple applications that are typically required to be purchased both by the client and the practice. This is a consequence of the desktop / server / disconnected model of the last thirty years.
"We’ve changed the technological architecture by having the software once. We don’t have to sell twice" .....What software are we talking about, the bookkeeping stuff or accountant's stuff? It's obvious a user is not going to pay Xero direct and also pay the accountant for Xero so I guess it's the latter, but what if the client is perfectly capable of doing 90% of their own accounts, or tax return, will Xero allow the accountant to enable the client as a user to do this? If not, what happened to collaboration as being the main benefit of Cloud working?
"There's not a client dimension to accounts production" ....unless they do them or sign them, or provide all the information for their preparation, then yes their accounts (or should that be our accounts) have no client dimension.
Oh we are "so" in for a few interesting years of disruption.
There is of course a client dimension to accounts production as you correctly point out, however there is limited scope for adding value to the job of accounts production, it's a defined body of work with limited scope for being transformed (apart from reducing the cost of it). The context of the original quotation pertained to the relatively higher value that may be obtained by accountants and clients working collaboratively. That's the sense of the quote.
But quotations out of context can sometimes lose their original meaning. Or the speaker might be an idiot. Both are probable in this case. :)
Gary Turner
Managing Director, Xero
@garyturner
And walking through it?
Hi Gary - thanks for coming back.
"Jumping the fence" of the first bit to your second point, I am all for one "end to end" solution, in preparing a set of accounts but I'm not sure about the "multiple" applications typically required at the moment, in the case of all my clients there are just two, bookkeeping & accounts prep and whilst the suppliers may be different, the link is pretty seamless and there's no duplication of sales as indicated by the report, so still not sure I follow.
With regard to there not being much scope to add value to the accounts preparation, firstly it would have saved a great deal of confusion if you had been quoted saying that rather than what was actually quoted and which you now say was wrong.....maybe John &/or Rachael were in a rush?
Secondly, for many accountants, the annual set of accounts is pretty much all the client gets to see of the accountant's hard work and so it shouldn't perhaps be written off as being of limited value or something that can't be used by the accountant and/or client as a marketing or management tool.
Obviously, there will be low worth "pure compliance" accounts where neither the accountant nor the client are that interested but Xero would not suit those.
I think I get it
My client uses Sage 50. He uses a bookkeeper, so she has a copy of Sage 50 to do his VAT and save travelling back and forth when he has queries. We have a copy of Sage 50 in the office so we can work on a copy of his data at the year end - one client, three Sage licences.
However, clients that use Xero just pay for one subscription and we can have as many users as we like for the same flat fee (come on Twinfield, catch up will you?).
Is that what Gary meant?
One ledger
My client uses Sage 50. He uses a bookkeeper, so she has a copy of Sage 50 to do his VAT and save travelling back and forth when he has queries. We have a copy of Sage 50 in the office so we can work on a copy of his data at the year end - one client, three Sage licences.
However, clients that use Xero just pay for one subscription and we can have as many users as we like for the same flat fee (come on Twinfield, catch up will you?).
Is that what Gary meant?
My understanding on the term One Ledger is not based round the number of copies of the program that exist, but the copies of the data. In the scenario that you quote the client may give you a backup to work on. Then the bookkeeper takes another backup home to work on, but the client continues to refer to the data on his workplace computer. In a short time you have three different versions which have to be brought back together. With Xero everybody is looking at the same data all the time
I attended Xerocon
It was very slick and professional. I got the impression that they were trying to emulate an Apple conference, including a heavy hint by one of the Kiwi guys that "whooping" would be acceptable when new products were announced ... which kind of fell a bit flat on the UK audience. We don't really do that sort of thing over here.
Overall, if you regard it as CPD then it was a decent day out which gave their vision of the future of the profession. The most interesting bits for me were listening to a couple of practices (one in recession-hit Ireland) and another North London firm in one of the "break-out" sessions that adopted Xero early, understand the concept and have really grown their practices with it and the ideas surrounding it.
I do remember the "double-dipping" comment. My understanding is exactly the same as Nigel's thoughts - the client does bookkeeping on Sage 50, gives the backup to the accountant, who extracts the reports they need using their office copy of Sage 50.
One of the big announcements was the imminent release of the WorkPapers module, although I think it is only silver partners (25 + Xero accounts) who get this for free so not very relevant to me at the moment. I'm sceptical about the 10% - 14% job cost savings quoted by an Australian accountant, as I don't take that long preparing lead schedules, but I suppose it's a good thing if you are a silver partner.
The final accounts product was raised by a few in the audience at the Q&A at the end. I got the impression that the UK version is something like a year away. Presumably when ready it will be able to prepare accounts in iXBRL format otherwise it will be a bit of a waste of time. Due to its complexity I'm also sceptical that version 1 will be able to effectively compete with the likes of Iris, but I suppose after a couple of years of working on it, it will be comparable.
In 10 years time, I would imagine that most SME bookkeeping / accounting will be done on something like Xero. I have no idea whether Xero, Twinfield, Quickbooks online, Kashflow, Freshbooks, Clearbooks or even (if they manage to get their online act together) Sage will be the dominant player. However, at the moment, Xero are probably in pole position.
Thanks nigel & Locutus
nigel - yes, if you and the bookkeeper feel the need to pay for Sage, just for that client, then there are 3 instances when only one is needed.
Given the different versions of Sage, QuickBooks, MYOB & TAS, we gave up all but the one we used for our own books about 5 years ago, leaving the client merely to email us Excel sheets of TB, Nominal & Trade Drs/Crs, there's no need to have the software.
This may be very unfair on the people at Xero but the approach and corporate image being "pushed" and the impression received by those with no experience of other systems, is that Cloud means Xero and as we have found with 30 years of the landed stuff, this is not the case, certainly not with a dozen or so now to pick from.
I mentioned on a thread the other day that I came across a tiny social enterprise that can no longer afford to pay an accountant for their support and year end work but are still paying them £25 per month for Xero because that's the only one the accountant offered. There is no way they should have been saddled with this and they have really struggled to get to grips with the system, much of which they just don't understand. Obviously this is not Xero's fault but the accountant was either misled or too lazy to explore the best solution for their client.
I spent today at a very worthwhile (and free) Iris World, with no whooping but some really good stuff. It will be interesting to see how this plays out over the next year or two but it's good to know Iris is not, and will not, restrict it's cloud facilities to just OpenBooks firms or those with more than 25 clients.
Good at technology; bad at people skills
I love on-line accounting software, including Xero which I think is great, but the vendors do have a tendency to sound incredibly smug. Why don't they stop knocking the opposition and just tell us about their product?
I seem to remember a few years ago, it was the cloud crowd who were telling us our clients were going to drive the uptake of their products, and that we Luddite accountants were going to be dragged kicking and screaming against our wills into the 21st century. Now they are realising that they need to market to the accountants more than to the clients; hence all these partner programmes.
I think they need to stick to the job that some of them do extremely well (i.e. develop their product), and leave the product to do the PR.
The quotes are pretty much verbatim
For some of the comments quoted I was sitting at a table with Gary and Rod, typing as they talked. Rather than the hoary old "taken out of context" defence cited by Gary, some of the punctuation and conjunctions may have been missed or misheard.Sometimes, however, the precise thought can be jumbled during talking or transcription but I have always found that repeating what was actually said is generally more readable, and usually gets the basic idea across more effectively.
For transparency, this is the text of the offending quote, exactly as recorded: "Where we see value; where monetise value is get client connected to acct. internal stuff is import, but ht ereal ivalue is in exertnal engeagement. Acct wk w external clients and data and not a compliance jockey."
My interpretation of this would be: Where we see value [and] where [we] monetise value is get[ing] client connected to [their accountant]. Internal stuff is import[ant], but [the] real value is in external engagement: [the accountant working with] external clients and data [in the cloud] and not [being] a compliance jockey."
As reported:
Where we see value is getting the client connected to the accountant. The internal stuff is important, but the real value is in external engagement. An accountant working with external clients and data is not a compliance jockey.”
This is hardly a court of law, but I think the initial report puts Gary's idea across accurately enough for you to "get" his intentions. He and Rod were doing an awful lot of talking that day and can be forgiven the occasional lapse into jargon and shorthand. Wherever possible I try to stick with what someone said rather than doing too much of the thinking/interpretation for them.
Double-dipping is an example of this, which Rod (as I reported) explained by the phrase "selling the same software to end users and accountants to do the same books".
Gary has confirmed the explanations offered by Nigel & Locutus, as Paul acknowledged. I'm sorry if our fast, somewhat impressionistic approach to compiling this notebook has caused any confusion, but we thought we would try it out to give readers a better flavour of what was going on at Xerocon.
And if you want me to be a really cynical journalist - at least it got you talking!
As a follow-up, it would help us know if you would like us to continue this approach, or if you'd prefer more formal, carefully worded summaries in future.
@Cloudcounter
Just to clarify the "double-dipping" concept: it's not the number of datasets that matters, it's the number of software licences that have to be paid for: One licence for the end user with Xero; one for the user, one for the accountant and, if relevant, one for the bookkeeper.
30,000 users in the UK
Just got an email from the Xero Team expressing regret that I was unable to attend Xerocon this year (they obviously don't read Accountingweb).
They passed on all the good news and success stories, including 200,000 users (30,000 in the UK) and a London Office.
So, what looks like > exponential growth in revenue and, despite the cost of the new office, I'm wondering if they will have enough left next year to pay for the 2014 event? If times are still tight then maybe fish/falafel & chips suppers rather than a gala dinner?
Noted
Well, if it convinces you to attend, Paul - I'm up for it. :)
Gary Turner
Managing Director, Xero
@Xero