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Has the Xero & KPMG Alliance affected your practice?

Has the Xero & KPMG Alliance affected your...

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So since the alliance of KPMG and Xero, has anyone lost any of their Xero clients to KPMG?

I've lost 2 now, and there seems to be something fishy going on here. Just wondering if anyone else has had this come up?

From what I've been told by my clients is that KPMG contacted them after they has been set up on Xero.. 

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Stewie
By Stewie Griffin
05th Jun 2015 14:07

What's on offer?

When KPMG contacted them, what did they offer that was better than what you were already providing.

You'd already told them about Xero and transferred them over, so there must be more to it?

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By ireallyshouldknowthisbut
05th Jun 2015 14:20

.

We have a number of clients on it and not a sniff of anything like that.

Quite frankly given the fee levels of KPMG charge you may well find they come back assuming you offer a competent service. 

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By mrme89
05th Jun 2015 14:27

Pricing

I only know one person who has moved to KPMG. KPMG matched the price of the current accountants, which was reasonable anyway. ... IT contractor £1250p/a.

 

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Replying to Dp2020:
By ireallyshouldknowthisbut
05th Jun 2015 14:52

.

mrme89 wrote:

I only know one person who has moved to KPMG. KPMG matched the price of the current accountants, which was reasonable anyway. ... IT contractor £1250p/a.

 

That's about 1/3rd of what they quote on the site, £275 a MONTH.

Interesting if they are now price matching.

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By asif08
05th Jun 2015 14:38

my concern is not really about what KPMG are offering .. but more so with what Xero might be doing...

Last thing we want is to load all our clients on to Xero and then lose them because Xero might be providing data to KPMG.

 

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By ireallyshouldknowthisbut
05th Jun 2015 14:58

.

On asif's point about attempting "poaching" this would seem incredibly unlikely, it would stain the reputations of both companies, but I guess anything is possible. 

 

 

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By Bob Harper
05th Jun 2015 15:28

Switched on marketing

@Asif - have you considered that perhaps there are there are ways KPMG can target Xero users without Xero being involved?

What about having a proposition so strong that KPMG couldn't take your clients even if you shared your client list with them?

Bob Harper

Crunchers Accountants

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By petersaxton
05th Jun 2015 19:58

How?

How can KPMG target Xero users without Xero being involved?

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By cheekychappy
05th Jun 2015 20:26

The Xero forum would be a start, but wouldn't be the numbers KPMG would need to make targeting them worthwhile.

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By Bob Harper
06th Jun 2015 10:34

How

@Peter - Asif has three choices - lower his prices, add value or choose a market whereKPMG can't beat him.

Lowering the prices is probably the easiest option. It doesn't "cost" money, time or energy to do that but I am not sure it's the cheapest or best option in the long run.

He can add value by investment in developing his service offering. There are options - develop everything from scratch, buy in some resources/help or join a network/franchise that will give him more strength.

As regards "how" KPMG can target Xero users  - I'd say that's a question I would not answer for free, a bit like what script to use to make telemarketing work.

@Asif - if you didn't guess Peter and I don't see eye to eye.

Bob Harper

Crunchers Accountants.

 

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Replying to MGD:
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By BananaMan
09th Jun 2015 12:30

Hmmm

Bob Harper wrote:

Lowering the prices doesn't "cost" money

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Steve Edwards
By stevo5678
06th Jun 2015 12:50

I suggest a Xero spokes person provides their two pennies worth in here as it is vey interesting and possibly alarming.

 

 

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By garyturner
09th Jun 2015 12:16

Comment from Xero
"Last thing we want is to load all our clients on to Xero and then lose them because Xero might be providing data to KPMG."

Categorically not the case. And never mind unethical, probably illegal.

Gary Turner
Managing Director, Xero
@garyturner

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By Bob Harper
09th Jun 2015 12:39

Comment from Crunchers

It will be interesting to see if the future brings more of a "switcher" client culture. It's easy for businesses to find Xero accountants and compare prices and service options.

Our approach is to develop and offer something unique (Improving the Numbers) which is based on using Xero as a platform for the advice.

I've just heard Gary talk on a Webinar about driving business performance enquiries into Xero partners, which is cool.

The question is what can accountants offer in terms of helping clients grow the top and bottom line because that isn't tax or accounting knowledge.

I've said before, sole-practitioners and small firms need to give serious thought to buddying up to defend against new and better competition like KPMG.

Bob Harper

Crunchers Accountants

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By Bob Harper
09th Jun 2015 12:41

Lowering prices

@BananaMan - I think you know but just in case, I'm well aware lowering prices reduces profit and therefore costs money.

I was just making the point that it doesn't cost money to implement that strategy as opposed to the other options which require upfront and ongoing investment.

Bob Harper

Crunchers Accountants

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By petersaxton
09th Jun 2015 12:45

Doesn't cost money?

You may not have money going out of the business but there is less money coming into the business.

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By ireallyshouldknowthisbut
09th Jun 2015 12:57

Thanks for coming on this thread Gary, the only possibility I could think of would be collusion between the telesales firm used by KPMG and someone in your office to up their 'hit' rate.  It would be presumably a little easier to convert someone on Xero vs just a 'random'.  But if this was the case I would imagine KPMG would be furious about any damage to their reputation, as I imagine would you.  

 Like KPMG give a stuff about a couple £k income and from your point of view it is not doing you any favours either. 

The more likely explanation is that Asif has been unlucky.

 

Tempting though it it is to rip into Bob, may I suggest he gets a little journey to Coventry?

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By petersaxton
09th Jun 2015 13:14

Very strange

If the OP was providing a good service, and I have no reason to think otherwise, I couldn't understand why somebody would want to switch to KPMG. Also, I would have thought that KPMG would be more than happy to find potential clients from people who don't use Xero.

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By Bob Harper
09th Jun 2015 13:32

Disruptive

@YouReallyShouldn't - you can suggest what you want, all I would say to the people reading the post is that Xero have made it clear they are disruptive technology and this is what it means.

The good old days are disappearing fast. The only saving grace is that Xero are the only technology working to give accountants a lifeline with new revenue streams.

Bob Harper

Crunchers Accountants

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By Bob Harper
09th Jun 2015 13:33

Good service

@Peter - perhaps "good service" doesn't cut it any more?

Bob Harper

Crunchers Accountants

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Glenn Martin
By Glenn Martin
09th Jun 2015 13:44

Does KPMG's Action here

not further highlight what a load of cobblers Bob Harper talks. If they have invested £40m into the bottom end of the market (for them) to offer a fixed price compliance based service to clients probably from contractor side of the sector. This would highlight this is in fact a growth area and  not something that is about to be obsolete in a few weeks. Or have the guys at KPMG got it wrong and Bob is a genius.

I know where my money sits, I suspect they have moved into this sector to replace audit work which is becoming ever more competitive and most likely to shrink in the future.

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By Old Greying Accountant
09th Jun 2015 13:52

If Xero have ...

... a directory of accountants.

Or if a websearch is done of "Xero Accountants"

If KPMG bulk buy Companies House data (very cheap for them), not that hard to search that data for Xero accountants and then target those companies, either by looking for those firms as presenters, or by looking at registered office addresses.

For example, Will Farnell make a big deal of being the number one KashFlow partner with all their clients on KashFlow. It would not be hard to identify their clients from Companies House! But, agreeing with Bob incredibly, if WF make their client/accountant bond strong they need have no fear of poaching.

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By Old Greying Accountant
09th Jun 2015 14:19

That said ...

... Bob's approach isn't about creating a strong accountant/client bond, it is about bleeding them white in the short-term and then finding a new mark. After all, most value pricing work has a limited shelf life, certainly at the fee levels Bob would be aiming for!

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By Bob Harper
09th Jun 2015 14:17

Growth

@Old Grey - now your thinking like a sales wolf - I'm impressed and there are other ways.

@Glenzy - the number of small businesses is growing but I am not sure KPMG are going for contractors, our friends at Crunch have got that covered.

Xero have added 500,000 customer in seven years, Crunch added clients 5,000 in five years - things can and do move faster today than ever before.

For me the future belongs to a few big brands - we will do our best to be in the mix, hopefully with local accountants offering something that KPMG can't.

And, for the record I think the necessary hook is add-on software that clients can only get from the accountant and that's what we're working on.

Bob Harper

Crunchers Accountants

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By Bob Harper
09th Jun 2015 14:19

Relationship

@Old Grey - Value Pricing works great over the long term - it actually encourages and rewards all sorts of upfront investment.

Bob Harper

Crunchers Accountnants

 

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Replying to spilly:
By petersaxton
09th Jun 2015 14:51

Accountnants

Bob Harper wrote:

@Old Grey - Value Pricing works great over the long term - it actually encourages and rewards all sorts of upfront investment.

Bob Harper

Crunchers Accountnants

Very analytical. It seems like you think repeating it enough times will convince people. You don't seem to believe in bothering with a persuasive argument.

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Replying to spilly:
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By Old Greying Accountant
09th Jun 2015 15:48

Disagree ...

Bob Harper wrote:

@Old Grey - Value Pricing works great over the long term - it actually encourages and rewards all sorts of upfront investment.

Bob Harper

Crunchers Accountnants

...

Yes, you can come in make all sorts of cost, tax and efficiency savings and charge handsomely for it, but once done, unless there is some sort of major expansion project, be that sales area, production facility or whatever, it really is a matter of just oiling and greasing things to keep them running smoothly. After a while client starts thinking what am I paying for.

To be truly professional and trustworthy the ultimate advice would be to tell the client to sack you as you are no longer cost effective, or at least offer a substantial fee reduction, may be a small retainer and per job pricing as and when. I would hazard there are few clients of AWeb member that need a "full time" part time FD with fee to match, once the initial strategies have played out.

I would say in years 1 - 3, the value and benefits of a competent professional accountant is high, and probably monthly meetings are in order, in year 3 - 5 costs  justifiable but quarterly meeting are all that is required, year 5+ uneconomic in terms of value for money, with just annual meetings and quarterly "how's it going" phone calls required. I say this as an accountant, and one who has watched this cycle repeat many times. Once proper systems of monitoring, feedback and fine tuning are in place the monthly meetings that went on for hours becomes 2 minutes on the business then "so you playing golf this weekend then"?

All that said, few of my clients are actually the type that need any of the above, and I imagine the same could be said for all accountants on here. Any that keep an accountant on after year 5 on such a high level of fee I would day do it more of a badge of honour, for the status, than for any real need - like a trophy wife!

I think though, that to give yourself credibility, it is sensible to spell your own firms name correctly, even if your grammar is weak

EDIT, ah Peter you noticed too, I was just typing a more persuasive response :)

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Replying to spilly:
Man of Kent
By Kent accountant
09th Jun 2015 15:23

Bullsh$t

Bob Harper wrote:

@Old Grey - Value Pricing works great over the long term - it actually encourages and rewards all sorts of upfront investment.

Bob Harper

Crunchers Accountnants

 

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By Old Greying Accountant
09th Jun 2015 14:22

That should be ...

... you are or you're!

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By Stefictionary
09th Jun 2015 14:31

Customer relationships

I've worked on both sides of the fence and what Bob is saying is spot on.

 

A reactive service to your clients will always come under threat from competition, whereas a proactive service is almost immune from competition. This is something I didn't quite understand until I read a fantastic book called 'firm of the future'. Any professional reading this book will have their world turned upside down over night.

 

It certainly is not healthy to look at competition with a view to keep it away from your clients, so if this is the focus of this article - how do we keep KPMG away from our clients - then I am afraid gentlemen that there is no hope.

 

 

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By petersaxton
09th Jun 2015 14:36

Stefictionary

Welcome to AccountingWeb!

It's always good to have new members and I see you've only just joined a matter of minutes ago. Was that to agree with Bob?

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By NewACA
09th Jun 2015 14:55

I Don't put Clients on Xero, as I feel I am specifically at risk

... of losing clients if I did.

Disclaimer: please do your own research, do not accept my text below as factual, the text below is just my own humble opinion which is probably wrong.

Xero seem to be wanting to take away compliance work from accountants, in my opinion.

This is explained away as "you can do the more interesting work of then advising the client" (my loose paraphrasing from memory).

Problem is, clients generally want mainly compliance work, and want a little advice thrown in for free, which is all many of them need. This is human nature unfortunately, you would find very few clients that will do the compliance work themselves, but then go on to have an annual meeting with an accountant or other adviser.

In my opinion, a lot of businesses would go bust if the accountant wasn't doing the compliance work, as it takes around 2 years to learn how to do a set of accounts and tax properly. So is very dangerous for most but the smallest of LTD companies to do the compliance themselves I think. These businesses that do their own compliance work don't have regular contact with accountants who can advise them.

Xero even seem to have an option to file statutory accounts in NZ last time  I checked, and I guess the'll add that to the UK version too at some point (possibly) so if you want to lose your clients, (regardless of KPMG) keep using Xero, me thinks. 

None of the other software providers attempt to do this, so I've stopped putting new clients on Xero now and intend to help taking the ones I have off Xero, where possible.

I wonder how long other accountants will take to wake up to fact that Xero is not your best friend, though they tell you they are, in my humble opinion.

I've never seen a company that attempts to bite off the hand that feeds them, I think they will have to change their business model. Imagine if Cash & Carry started selling direct to the public, instead of to retailers?

 

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Replying to Tim Vane:
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By Mick Milne
11th Jun 2015 16:19

interesting points

NewACA wrote:

... of losing clients if I did.

Disclaimer: please do your own research, do not accept my text below as factual, the text below is just my own humble opinion which is probably wrong.

Xero seem to be wanting to take away compliance work from accountants, in my opinion.

This is explained away as "you can do the more interesting work of then advising the client" (my loose paraphrasing from memory).

.....

I wonder how long other accountants will take to wake up to fact that Xero is not your best friend, though they tell you they are, in my humble opinion.

I've never seen a company that attempts to bite off the hand that feeds them, I think they will have to change their business model. Imagine if Cash & Carry started selling direct to the public, instead of to retailers?

 

 

Interesting points NewACA, and I have to say I share some of your concerns - great software and very helpful staff, but arguably you are handing over all your data/contacts to them.  Taking personalities and value adding that me may offer our clients out of the equation, you can see how risky and transferable the work/accounts could be.....  Food for thought.....  if automation and direct reporting becomes more mainstream as some suggest then we might find ourselves locked out some day from a number of our cost conscious shorter term clients where loyalty/trust not yet established and AN other moves in....

 

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Glenn Martin
By Glenn Martin
09th Jun 2015 14:50

@Stefictionery

The proactive and not reactive stance of an accountant is nothing new as you and Bob Harper suggest.

I have been an accountant since 1988 and that has always been the key to moving the firms forward I worked with and for. It is nothing new its just Bob thinks it is. The practice of the future you refer to is no different the practice of a few years back the only different is the method of delivery whereas as we used to recommend sage (as its all there was) 20 years ago. the comparison at the time was using hand written ledgers like Kalamazoo systems. the step to transfer that to a desktop line 50 probably produced greater time savings than switching to cloud does now.

In the middle we developed remote access to save time checking systems instead of physically attending the site, until cloud hosting has moved things on again. 

Most accountants are fairly well switched on to what is developing in the market.

Its an evolution of what we do not a revolution as Bob seems to think he has hit upon.

 

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By Bob Harper
09th Jun 2015 16:15

Double check

@NewACA - let me get this right:

You know of software that will save your clients time and money but you will not recommend it to them because it's not good for you?

@Old Grey - there is nothing to stop an accountant working with a client on an ongoing basis provided the client is getting value. Business coaching is something accountants can move into.

Bob Harper

 

Crunchers Accountants

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Replying to gillybean04:
By ireallyshouldknowthisbut
09th Jun 2015 16:45

.

Glennzy][quote=Bob Harper wrote:

Can I just ask if compliance work is dead (or about to die) why your franchise is called "crunchers" which makes it sound like a firm that does basic compliance work.

please don't ask him to explain this paradox

My conclusion is that due to his having flatly failed for 5+ years to make this franchise work, he has concluded it cant possibly be him that is wrong, for he has perfect vision, it must be the market.

 

 

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Replying to Cheshire:
Glenn Martin
By Glenn Martin
09th Jun 2015 17:17

paradox or Parallel Universe.

ireallyshouldknowthisbut] <p>[quote=Glennzy wrote:
Bob Harper wrote:

Can I just ask if compliance work is dead (or about to die) why your franchise is called "crunchers" which makes it sound like a firm that does basic compliance work.

please don't ask him to explain this paradox

My conclusion is that due to his having flatly failed for 5+ years to make this franchise work, he has concluded it cant possibly be him that is wrong, for he has perfect vision, it must be the market.

 

 


Not realised there was a paradox involved.
I thought he had just tried to rip off the logo and image of "crunch" which are a hugely successful
Much better operation than his own which incidentally there model is based around compliance based work, so not
Sure why he would try and pass himself off as them.
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By petersaxton
09th Jun 2015 16:29

Online bookkeeping

There's other online bookkeeping software. It doesn't have to be Xero or nothing.

But then again I've not seen you think things through logically before so why change now?

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Man of Kent
By Kent accountant
09th Jun 2015 16:34

sniff, sniff

Can anyone else smell it?

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By petersaxton
09th Jun 2015 16:39

He comes on here

talks shit[***][***]

and then when it doesn't work he eventually disappears.

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By ireallyshouldknowthisbut
09th Jun 2015 16:43

.

 

Please do let it be soon when he vanishes again and not just up his own rear exit.

 

 

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By Bob Harper
09th Jun 2015 16:49

Smell

@Kent - I'm interested in what NewACA has to say about deliberately not helping clients reduce their compliance costs.

We published a little book a few years ago called "Stinky Books - 17 mistakes small business owners make with their bookkeeping". I may update this with an extended title..."which your accountants makes money from".

I think you can smell the professions ignorance or arrogance.

Bob Harper

Crunchers Accountants

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By petersaxton
09th Jun 2015 16:56

Ignore everything that shows you are wrong

You talk rubbish but when people show that you are talking rubbish you just talk more rubbish.

You are ignorant because you have been saying for years something will happen when it hasn't. You act exactly like the people who predicted the end of the world but when it didn't happen you just predict it will happen later.

Plenty of people earn a good living producing compliance work but you can't so you make out you are better than everybody else because you can see something that they can't. It's called delusional.

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By Bob Harper
09th Jun 2015 16:59

Crunchers

@Glenzy - by "support the accountant more" you mean enable the accountant to charge for work which could be reduced or eliminated by other software?

There are a number of reasons we have stayed with Crunchers:

Our strategy is to use the accounts as the basis for the relationshipOur market knows accountants as number Crunchers so we go in on that levelCrunchers is friendly and non traditional e.g. Harper & CoWe use numbers in our business advisory so Crunchers are the numbers peopleBusiness owners like it

Bob Harper

Crunchers Accountants

 

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Replying to Mrbailey:
Glenn Martin
By Glenn Martin
09th Jun 2015 17:15

Why do you make things up to say.

Bob Harper wrote:

@Glenzy - by "support the accountant more" you mean enable the accountant to charge for work which could be reduced or eliminated by other software?

There are a number of reasons we have stayed with Crunchers:

Our strategy is to use the accounts as the basis for the relationshipOur market knows accountants as number Crunchers so we go in on that levelCrunchers is friendly and non traditional e.g. Harper & CoWe use numbers in our business advisory so Crunchers are the numbers peopleBusiness owners like it

Bob Harper

Crunchers Accountants

 

When I said he wants a software provider he supports the accountant more I mean a software provider that supports the accountant more.
Some cloud providers see the accountant as the hub so support them to sell their product in a number of ways.
Where does the leap from this to helping You rip the client off come from.
There is very little between all current cloud offerings be it Xero, kashflow freeAgent, sage one on QBO so choosing one over the other
To recommend to clients makes no difference to the end user as the end result will be the same.

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Replying to Mrbailey:
Glenn Martin
By Glenn Martin
09th Jun 2015 17:20

Rip off

Bob Harper wrote:

@Glenzy - by "support the accountant more" you mean enable the accountant to charge for work which could be reduced or eliminated by other software?

There are a number of reasons we have stayed with Crunchers:

Our strategy is to use the accounts as the basis for the relationshipOur market knows accountants as number Crunchers so we go in on that levelCrunchers is friendly and non traditional e.g. Harper & CoWe use numbers in our business advisory so Crunchers are the numbers peopleBusiness owners like it

Bob Harper

Crunchers Accountants

 

You have missed a point where we decided to rip off the brand of another successful company and try and pass it off as our own.
I am amazed Crunch have not come after you for brand infringement.

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By Bob Harper
09th Jun 2015 17:06

Dates

@Peter - I know plenty of people make a decent living out of compliance and have done so for decades. And, I know time based billing works. 

But, that doesn't mean that business model is the best but it is easy.

Bob Harper

Crunchers Accountants

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By ireallyshouldknowthisbut
09th Jun 2015 17:18

.

Re the remarkable branding similiarities to Bobs, one office failing franchise and the successful compliance based business "Crunch".

I am sure it was pure chance the way he came up with not only the nearly exact same name but the same logo too. Fancy that!

one of the senior bods on Crunch posted here a while back but was not very worried about the er 'competition' of Bob's little part time business. 

 

 

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By Bob Harper
09th Jun 2015 17:38

Funny

@Glenzy and YouReallyShouldn't - it's weird, isn't it;)

All I can say is that Crunch is about the technology, Crunchers are about the people - that's what the "ers" is about - just that bit extra.

Bob Harper

Crunchers Accountants

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Replying to SBS33:
Man of Kent
By Kent accountant
09th Jun 2015 19:33

Poor Bob

Bob Harper wrote:

Crunchers are about the people - that's what the "ers" is about - just that bit extra.

Arrrgggghhhh now its tacky bullsh$t!?!

You really are a lost cause and I feel very sorry for you...

your epitaph..."poor Bob he really didn't have a feckin' clue..."

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