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Xero price changes - worth it?

From a practice perspective do other collaborative platforms offer better leverage?

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Xero have announced price increases from September by 20% on the Starter, 8.3% on the Standard and 10% on Premium. I suppose there'd be more to grumble about if they'd put 20% on the Standard which most are on.

There is of course the argument that the cost should be passed on to the customer, but if your practice is spending a 4 figure sum on Xero each month is it value for money, and are there other solutions given that most clients don't seem to care what platform they are put on?

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By Wanderer
27th May 2021 12:31

Arthur Putey wrote:

.... and are there other solutions given that most clients don't seem to care what platform they are put on?

Pandle.
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Replying to Wanderer:
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By alialdabawi
27th May 2021 14:02

+1

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Replying to Wanderer:
A Putey FACA
By Arthur Putey
27th May 2021 14:30

Cost and benefit over Xero?

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Replying to Arthur Putey:
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By Wanderer
27th May 2021 15:15

Cost is £2.50 per month.

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Replying to Wanderer:
blue sheep
By Nigel Henshaw
27th May 2021 16:45

Wanderer wrote:

Arthur Putey wrote:

.... and are there other solutions given that most clients don't seem to care what platform they are put on?

Pandle.

Isnt that the one owned by a firm of accountants?

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Replying to NH:
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By Wanderer
27th May 2021 17:00

Yes, but doesn't impact in any way.

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By michaelbeaver
27th May 2021 12:57

We don't specify which service the clients use, but recommend Xero or Clear Books. We always on-charge the cost of the software without mark up. We aren't out to make a margin on the software, so any increase in price goes straight to the client - and if they're bothered they'll change to something else.

We'd still prefer to be led by the client as to their preferences without imposing a choice on them.

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Red Leader
By Red Leader
27th May 2021 13:01

Price rises from the IRIS playbook.

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By ireallyshouldknowthisbut
27th May 2021 14:06

They know its a real PITA to switch. See all those people still on SAGE.

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Glenn Martin
By Glenn Martin
27th May 2021 13:26

still worth on "a proper" business ie one with staff, compared with messing about with access to Sage and the like.

The big problem I see is the MTD roll out for taxi drivers etc in 2 years time as cannot see them paying £200 for software.

We don't really have clients at that size but that is the challenge to be dealt with maybe by the likes of Crunch or contracting firms which must be now wondering what comes next.

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By ireallyshouldknowthisbut
27th May 2021 14:05

Software company "here is loads of new stuff we for free"

user: "OK that's nice, I probably wont use it, but cheers, big thumbs up"

Software company "you know all that new stuff we gave you for free? Well we need to make profits you know, here have a bigger bill"

User : "scunthorpes"

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By I'msorryIhaven'taclue
27th May 2021 14:30

Isn't this just the product life-cycle thing, whereby Xero are hitting cash-cow stage whilst QB are still rising stars and Sage are heading south towards dead dogs end-of-life stage?

Product life-cycle pricing is bound to factor in with every piece of kit, at each of their various stages. The old business maxim about never relying on just one supplier springs to mind.

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Replying to I'msorryIhaven'taclue:
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By johnt27
27th May 2021 14:43

Not sure QB are still rising starts - Intuit have been in cash cow phase for 20 years+

Big difference is that QB quite clearly pursue a low cost, high volume strategy but many of these deals are pegged at 3 years and when they reverse price increases are significant. That's not to say others, including Xero, haven't pursued similar practices but they only do it through their partner channel and not direct to market.

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By Mr_awol
27th May 2021 15:33

johnt27 wrote:

Big difference is that QB quite clearly pursue a low cost, high volume strategy .

Not only that but Xero are very much the other end of the spectrum.

I once watched Xero Gary tell an audience 'we dont discount. It's a premium product and worth the fee' quite early on. The problem they have now is, that it bloody isn't. It's good but not fantastically better than anything else - and a large number of people I've seen/met who do get the best out of it do so by having three or four (paid) integrated add-ons from other providers!

If we arent careful, the clients will be paying three figures plus, every month, on bookkeeping software for a business that we could have done the bookkeeping for on a spreadsheet at not a great deal more!

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Replying to Mr_awol:
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By johnt27
27th May 2021 16:32

I don't fully agree with your last sentence but Xero do market themselves as a platform into which you can plug in other apps and from that point of view they are still top of the pile. Their API just works and more data is accessible than any of their competitors. Maybe that's why they have the premium product slant and possibly they don't really need/want those clients who could survive with a spreadsheet?

What's interesting to see is that Intuit have had quite an aggressive acquisition strategy over the last few years - picking up some really good apps, but then invariably shutting them down to competitors like Xero. Xero on the other hand have picked up a mixed bag of acquisitions, some strategic (to open up other markets), but have invariably left them open to their competitors like QBO.

The other difference is that QBO charge separately for these acquired apps if you use them, whereas Xero seem to have chosen to offer these as inclusive product features even if they aren't used by many businesses. This was after all the justification for increasing Xero subs across the board in 2019, whilst dropping subs for Hubdoc for Xero users.

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A Putey FACA
By Arthur Putey
27th May 2021 14:35

Anyone looked at Quickfile? Not for final accounts and tax obviously but I doubt anyone will be rushing to use Xero for that. I don't think day to day accounting and nd final accounts need to be integrated, so more interested in the former as that's where the client collaboration (and fixed cost per client in the case of Xero) come in.

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Replying to Arthur Putey:
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By johnt27
27th May 2021 14:45

Not sure about MTD for IT, but the MTD for CT draft regs are written on the basis that bookkeeping through to final accounts and tax production are linked back and forth.

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Replying to johnt27:
A Putey FACA
By Arthur Putey
27th May 2021 15:11

Perhaps in the sense of a digital link like MTD VAT, but I doubt HMRC would enforce the use of a single proprietary platform end to end. Among other things it would mean the death of professional final accounts packages.

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Replying to Arthur Putey:
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By johnt27
27th May 2021 16:15

Agreed, but they appear to be leaning towards API lead integrations and not the current "get out of jail free card" we have with MTD for VAT of excel and bridging software. With the exception of Xero Tax, for all its flaws, there is not a workable solution out there that supports this at present.

Clearly there is plenty of time for development in the market and there are a number of products that have working one way or two way integrations for part of this process such as MyWorkpapers, Silverfin, CCH, Digita to name a few

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Replying to Arthur Putey:
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By Andy556
27th May 2021 16:23

Quickfile looks to be a bargain.
Does anyone use this on here? It says it's £10 per year per 1gb of data above the first gb. I'm not sure how many PDF invoices you can upload per GB. Anyone any idea?
I assume lots so I doubt price would be an issue so it might be worth looking at

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By johnt27
27th May 2021 14:54

The obvious choice is QBO - very similar functionality/features/marketplace etc. The challenge would be regarding shifting clients to make it worthwhile. That really depends on your firm, how much internal bookkeeping etc you do.

The barriers to change to alternate providers are as low as they could possibly be in terms of moving the data and Xero, and others, are well aware of that given they fund MoveMyBooks as an incentive to move clients. The remaining challenges are all people and systems based.

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Replying to johnt27:
A Putey FACA
By Arthur Putey
27th May 2021 15:13

I guess we've become used to thinking of Xero as class leading when in fact some of its functionality is showing its age or remains incomplete. Does it still have the "best" bank rec and bulk coding features?

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Slim
By Slim
27th May 2021 15:11

when was the last price hike and how much was it?

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A Putey FACA
By Arthur Putey
27th May 2021 15:38

Whatever happened to the company that used to host drinks parties for accountants in London, ClearBooks is it? Don't hear much from them.

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Replying to Arthur Putey:
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By Andy556
27th May 2021 16:19

I always thought these were a cheaper alternative. I'd forgot about them until you said this.
Just looked and they are £24 per month so must be competing on quality rather than price. I've never used it so it will be interesting to see people views on it

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Replying to Arthur Putey:
Glenn Martin
By Glenn Martin
27th May 2021 16:43

They are still going I bought £1000 of their shares about 6 years ago, I got my first dividend this year £4.50.

Had I invested that money into Crypto I would be typing this email from my yacht. Clearbooks was a good product but they spent £0 on marketing it.

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Replying to Arthur Putey:
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By Crouchy
27th May 2021 18:53

Clear Books is a great bit of software, not too complicated and easy to fix when clients get it wrong

I've often wondered why they don't do better, but its mainly down to poor marketing, they don't even have an accountant directory on their website, so potential users don't know that they could get an accountants support who knows the system - they instead use a paid for lead service, which accountants have to pay to access, not a great way to start a relationship with the people who can help promote your product

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A Putey FACA
By Arthur Putey
27th May 2021 19:12

Unlike Xero who charge accountants (a major referral channel in effect) to attend their annual conference, aptly named "XeroCon"

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Replying to Arthur Putey:
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By I'msorryIhaven'taclue
27th May 2021 22:14

The big con is making the likes of you and I reseIllers. Places us firmly in the front line, alongside the credit card company.

A lifetime ago - I want to say circa 2004 - TAS Books sold me a £3.5k kit which made me feel rather like a Tupperware agent. So when I had a phone call from TAS to say a largish company wanted a multi-user user network version for which their (I have to say slightly bemused) company accountant would present me with a cheque, I complied and politely accepted the £200 mark-up. Cue months of grief, whilst they rang me at every minute stage of the installation and configuration. And, of course, as the (re)seller I was the front-line guy performing a free service. TAS simply referred avery technical call to yours truly.

After which the penny dropped, and subsequent sales didn't involve me as middle-man (which gifted me some scope to charge in on my White Horse and fix whatever issues the end user encountered, at a decent day rate).

All of which has left me rather uncomfortable with the entire reseller concept.

I do hope there were vol-au-vents at Xero Con's bash! At least you can chow in and get your money's worth.

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By sanjay100
27th May 2021 22:06

Once these software companies get you into their web they know its difficult to escape. Expect major price increases across the board year on year as they blame it on more add-ons, MTD and other HMRC changes.

Quickbooks with 10 licenses for £1 each which they release time time does prove good value though.

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A Putey FACA
By Arthur Putey
28th May 2021 09:28

The best deal I got was from Sage when they first launched their online version, 50 cashbook, final accountts, CT and SA all for £50 a month for ever. They tried to renege on it a number of times but even the normal price version is decent value. The problem with Xero (and perhaps others to be fair) adding final accounts is the underlying £20 or whatever a month per client. But speaking of Sage I see they now have separate pricing for accountant bundles, which means taking their Standard offering its £9 a month compared to the public price before offers of £24. A 62.5% discount compared to Xero's 20% at silver partner level.OK, the Sage price excludes the accounts prep and tax modules which would cost £60 a month, I couldn't find a limit on the number of companies so assuming you could have 60 for £1 a month that's still good value. There's not much wrong with the Sage accounts and tax functionality especially compared to Xero who are doing their ususal launch then fix act.

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Replying to Arthur Putey:
blue sheep
By Nigel Henshaw
28th May 2021 10:42

Arthur Putey wrote:

The best deal I got was from Sage when they first launched their online version, 50 cashbook, final accountts, CT and SA all for £50 a month for ever.

Yeah we got similar 100 simple, 10 accounting for £100, we put up with the poor functionality for the incredible value, it's good enough for most

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Replying to NH:
A Putey FACA
By Arthur Putey
28th May 2021 11:46

There were some gaps at first, but they added a lot over a couple of years. Where do you think it falls down now?

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Replying to Arthur Putey:
blue sheep
By Nigel Henshaw
28th May 2021 14:02

Arthur Putey wrote:

There were some gaps at first, but they added a lot over a couple of years. Where do you think it falls down now?

A few niggly things that other software does a lot better - for example compare posting transactions from the bank feed on QB or Xero where you can sort by description, choose multiple items to treat the same etc, Sage is very clunky and time consuming in comparison, buy het you get what you pay for, my 100 Sage clients would never pay Xero or even QB prices, and £1 a month we can swallow it.

When we first started using Sage I sent my account manager 2 A4 pages of "things the others do better", never even got a reply

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By JD
30th May 2021 10:02

My concern is not just the cost for multiple apps that a Clint needs, it is, if you bring bookkeeping in house and wish to use these as a tool of the firm, they still try and control our relationship with the client. It undermines the principle of providing a professional service. For instance if I wish to delete a vat return, or rebuild a chart of accounts or any of the other normal management processes of a client list, there is no reasonable basis that should be controlled by the software company.

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By JD
30th May 2021 10:02

My concern is not just the cost for multiple apps that a Clint needs, it is, if you bring bookkeeping in house and wish to use these as a tool of the firm, they still try and control our relationship with the client. It undermines the principle of providing a professional service. For instance if I wish to delete a vat return, or rebuild a chart of accounts or any of the other normal management processes of a client list, there is no reasonable basis that should be controlled by the software company.

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