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Xero Pricing

Did you get a good deal?

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Hello

I was talking to my ex-employee. His current employer decided to take 100 Xero licenses for the first time. Each one at the cost of mere £2.50+VAT per month. The total monthly costs being £250+VAT. 

As long-term Xero customer,  I am paying £682+VAT per month, for under 100  Xero licenses. After staff costs, it the second biggest costs that we have. The only discount I am getting is the advertised partners discount. I think that is 30%. 

New Xero customers are getting a better deal than long-term customers?

Can you share your Xero deal? Did you get a good deal? How?

I want to talk to my Xero account manager. 

Thanks

Replies (52)

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Locutus of Borg
By Locutus
03rd Apr 2018 20:37

I get a pretty poor discount, so I generally get clients to pay for their own Xero subscription unless it is for the cashbook version.

Then if Xero wants to increase their prices by x% in the future that is not my cost to try to absorb.

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ALISK
By atleastisoundknowledgable...
03rd Apr 2018 22:18

I get the 30% discount and pass on 10%. Whenever Xero have a really good ‘new customer’ deal and we need a new license, I’ll use one of our many work email address ([email protected], [email protected] etc) to get the deal, then when it runs out transfer the subscription to my normal account.

You gave to take any penny you can find with software houses.

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Replying to atleastisoundknowledgable...:
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By Manchester_man
03rd Apr 2018 23:20

Yeah, I do exactly the same thing. Otherwise, the discounts are so measly is neither here nor there. I think I get 5 or 10% discount. Considering we accountants (me certainly) are encouraging clients towards Xero, I am surprised they don't offer more of a reward. I guess they don't need to.

I'm a little dubious about anyone getting 100 licenses at £2.50 per month each. Is your employee perhaps getting confused with QuickBooks?

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Replying to Manchester_man:
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By Mr_awol
04th Apr 2018 11:48

Manchester_man wrote:

I'm a little dubious about anyone getting 100 licenses at £2.50 per month each. Is your employee perhaps getting confused with QuickBooks?

Don't be dubious. It is possible (if you've got the balls to buy 100 licences speculatively or if you have a hundred clients ready to go straight over).

I did it, with a mixture of the above

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Logo
By marks
03rd Apr 2018 23:25

Did they maybe get 100 of the ledger licences that are £2 + VAT each per month.

Would be surprised if Xero gave 100 of the full standard licences at £2.50 + VAT as they would be throwing away £2k + VAT each month.

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By mrme89
04th Apr 2018 08:46

I wonder when Xero will adopt the Iris model of increasing fees drastically year on year? It will need to turn a profit eventually ...

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Replying to mrme89:
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By Mr_awol
04th Apr 2018 11:56

mrme89 wrote:

I wonder when Xero will adopt the Iris model of increasing fees drastically year on year? It will need to turn a profit eventually ...

It's already quite expensive compared to comparable alternatives though - and as for turning a profit, they managed that in 2017 (c£600k)

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Replying to Mr_awol:
By mrme89
04th Apr 2018 13:57

Not according the interwebs.

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Replying to mrme89:
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By Mr_awol
05th Apr 2018 12:52

They were expecting their first global profit making year this year.

Xero UK made the profits referred to above - figures on Co Hse

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By PracticePartner
04th Apr 2018 08:57

I've used Xero for a few years now and intitally the Silver discount was 25%, but the extra 5% was removed by Xero last year. You have to be a Gold partner with around 100 clients on Xero to get 30% Like the OP we spend around £600 a month on Xero and while we roll this into fees and work more efficiently it still seems a lot. I'd hoped Clearbooks would gain more traction in the market as they have more attractive partner discounts. Although Xero has become a global brand most of our clients don't care what we put them on as long as it works. And I've no idea who our account manager is this week.

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By PracticePartner
04th Apr 2018 09:01

On a separate note the big gap in Xero for UK accountants is the lack of final accounts and CT. The only platform I've seen that delivers that is SageOne but despite a lot of improvements the areas where clients spend most of rheir time (AR, AP and bank) are much less intuitive than Xero.

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By Cloudcounter
04th Apr 2018 09:19

We don't know how long that price is going to stand. If it's a short term incentive to get them to transfer clients over (rather like QBO) then I can see why Xero would do it.

From my own point of view, if I didn't accept the price that I was charged I wouldn't have signed up. What other people pay on special offers is completely irrelevant.

As for new customers getting a better deal, that happens everywhere from Sky TV through broadband to car insurance.

I wasn't particularly happy at the cut in the silver partner discount and the move of the goalposts on gold partnership but bearing in mind that we didn't get it on partner edition subscriptions it's peanuts - £1 per standard client per month

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Replying to Cloudcounter:
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By fiona_howells
04th Apr 2018 12:41

If you get QBO through the accountant the price is guaranteed for life and not a short term offer

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Replying to fiona_howells:
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By Cloudcounter
05th Apr 2018 09:03

That's not what I was told on the Quickbooks stand at Accountex North. Valid for two years only.

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Glenn Martin
By Glenn Martin
04th Apr 2018 10:04

I would think you have been given duff information FT. I suspect if such an offer was available it maybe for cashbook licences which are normally £5 PM.

Maybe your mates firm has a load of contractors that he wanted to put on the cloud and so get that deal. I cannot see how they would get full licences for that sort of money.

You should speak with your account manager though as if you are keen to move up your Xero numbers they are happy to help you get from Silver to Gold etc and would maybe do a deal with you to get you there.

If that deal is genuine I will sign up now and I imagine there will be a queue of others keen to do so also. But I would be amazed if that is the case.

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By Mr_awol
04th Apr 2018 10:28

Speak to your account manager FT. They don't exactly keep this deal secret - ours have always been very vocal about it.

I imagine they are Bureau licences and that they will go up to £5/month after a 3/6 month promotional period. You can have Bureau licences yourself if you want to buy a block, but you wont be able to transfer any existing licences to Bureau*. Also, you wont get sales invoicing (or projects?) unless you go for the full fat £22 version.

*Not officially, anyway. You might be able to close one and start up a 'new' company on Bureau. I don't know if they will pick that up from the bank feeds being the same.

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By cbp99
04th Apr 2018 12:16

It costs us £150 per year to service 50+ clients (could be any number) including final accounts, with VT. Immeasurably quicker and easier to use.
Downside is no bank feed and not online.

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RedFive
By RedFive
04th Apr 2018 12:37

I pay £310+vat per month for 65 Quickbooks online licences.

All have sales invoicing, reporting, bank feeds, multi user and VAT capability.

Mix of sign up deals such as 10 for £10 for life plus a 2 year discount offer on bulk buy Pro licences and Simplestart at £4.99 (no purchase ledger, limited VAT, but full sales ledger and bank feed) and Essentials at £7.50 which does everything.

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Teignmouth
By Paul Scholes
04th Apr 2018 13:12

Being old I still consider my 7 years of cloud accounting as a "new thing" however there seems to be a second generation of entrants that will provide as much, or near to, what we get from the veteran providers, in a slicker and easier format and at a fraction of the cost.

For example, I've been keeping an eye on Pandle over the past few months and have been trialling it for a couple of weeks and, whilst it's basic, its features, including multicurrencies, are impressive, and they are adding more each month.

What's more impressive though is its speed of development and, on their website they give a timeline for features being added and they have done in a year what would take the veterans 10 years. Apparently this is as a result of new frameworks and methods not available when the veterans started.

And all for £2.50 pm for me.

In addition we now have bank/accounting apps like Tide and Tim Fouracre's CountingUp (article on main page) that, in theory, will bring even more redundancy to accounting work (no more bank recs).

So interesting times still and, perhaps firms will be able to concentrate more on the right system for each client rather than the discounts they get?

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Replying to Paul Scholes:
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By PracticePartner
04th Apr 2018 14:00

Paul Scholes wrote:

So interesting times still and, perhaps firms will be able to concentrate more on the right system for each client rather than the discounts they get?


Good point. £300pm to serve 50 clients is better than £800pm discounted to £600.

How is Panfle funded? Are its pockets deep enough to gain traction in the cloud market?

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Replying to PracticePartner:
Teignmouth
By Paul Scholes
04th Apr 2018 15:11

Hi PP - To be honest, considering most of my cloud accounting apps have always come from companies making losses, I'm not that worried about how this one is funded, in our industry it's refreshing to live on the edge :)

Its accounts show healthy accumulated profits which backs up the owner's comments in a 2016 interview:

http://is4profit.com/business-blog/the-business-owner-lee-murphy-pandle/

It also has a white labelling fee which is substantially more than the non branded fees but none of my clients would ever believe I'd written my own software!

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FirstTab
By FirstTab
04th Apr 2018 21:41

Hello

Thanks for an interesting response.

I spoke to my ex-employee today. The deal is as follows. They bought 100 licenses for the standard version of Xero (website price £22 pm). Not the ledger version.

They got it for £5 pm, it was reduced to £2.50 pm for 6 months. Then it goes to £5 pm.

Further, they moved their existing Xero clients 10 or so to the 100 package deal.

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Replying to FirstTab:
Man of Kent
By Kent accountant
04th Apr 2018 22:12

Sounds like b*llocks FT.

I'd bet my left one on it being 100 no vat cashbook licences with 50% discount for 6 months.

Firm probably took it to get elevated to 'Silver/Gold' partner status.

Why do I think this?

Because I did it last year :o)

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Replying to FirstTab:
ALISK
By atleastisoundknowledgable...
05th Apr 2018 00:49

Job #1 for tomorrow, call whoever my account manager is at the moment.

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Replying to atleastisoundknowledgable...:
FirstTab
By FirstTab
05th Apr 2018 08:07

As Xero long-term customers, will we get the same deal?

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Replying to FirstTab:
ALISK
By atleastisoundknowledgable...
05th Apr 2018 08:47

My account manager has just denied all knowledge of the deal, although he did say I’m on the cusp of being passed up the chain to the next level of accounts team, let’s see if I get a better answer there ...

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Man of Kent
By Kent accountant
04th Apr 2018 22:17

All those whinging about the price of software are missing the point.

Choose the software which you believe is the best and allows you to provide the best possible service to your clients.

That could be VT/Sage/CB/QBO/Xero whatever.

The service you deliver to clients should mean that the cost of all the above is irrelevant.

If I didn't use the approach to software I do there is no way my practice could deliver the same quality and quantity of work that it does.

Fees are charged accordingly which means the price of the software is a non issue.

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Replying to Kent accountant:
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By PracticePartner
05th Apr 2018 08:42

Kent accountant wrote:

All those whinging about the price of software are missing the point. ..... Fees are charged accordingly which means the price of the software is a non issue.


Isn't that letting the software provider off the hook? Software is a cost for accountants and if I were evaluating cloud platforms I would be hard pushed to conclude that Xero is worth twice the cost of QBO.
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Replying to PracticePartner:
Man of Kent
By Kent accountant
05th Apr 2018 09:08

Isn't it?

Horses for courses. My practice is set up to service clients by using Xero. The cost of the licence is included in the total fee package, it doesn't get charged on separately to clients.

In my opinion Xero is better, not all will agree - accepted.

What we do works - Xero plus select apps. Staff are all proficient with Xero, clients are comfortable with it - I'm not going to cause upheaval and loss of productivity by moving to a cheaper (and inferior) product.

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Replying to Kent accountant:
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By PracticePartner
05th Apr 2018 10:40

Agreed, horses for courses. But by riding that horse you have to accept that you have become a captive cusrtomer of Xero. And there may be nothing wrong with that, compared to the way things were a few years ago. But for anyone starting from scratch, now that Xero is approaching its 10th birthday and has some obvious gaps, there are different arguments. I've even got a few clients used to SageOne!

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Replying to Kent accountant:
ALISK
By atleastisoundknowledgable...
05th Apr 2018 08:55

Irrespective of whether I agree or disagree with your point, surely an 88% discount over 20% (just realised I’m only Silver not Gold) is worth a few minutes of my time?

How can anyone argue that fitting £2.50 into a monthly fee isn’t better for my practice that taking a £17.60 hit?

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Replying to atleastisoundknowledgable...:
Man of Kent
By Kent accountant
05th Apr 2018 09:04

Yes, but that level of discount (based on the quantity of licences being discussed) doesn't exist. The £2.50 is a discounted non-vat cashbook subscription.

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Replying to Kent accountant:
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By Mr_awol
05th Apr 2018 16:10

KA it wont be the non-VAT cashbook option. I'm pretty sure I know exactly what deal it is now that FT has confirmed the promotional period. It will be the full £22 version but without access to sales invoicing.

Fortunately for you, neither I (nor, I assume, anyone else on here) are interested in your left (or even right) nut - so your earlier wager results in no loss

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Replying to Mr_awol:
Glenn Martin
By Glenn Martin
05th Apr 2018 16:26

Is that even a version, standard one without sales invoices as that would work well for my leisure stuff.

Sadly I am currently without a Xero account manager to check whether Kent loses his left nut sack or not.

Perhaps someone from Xero would maybe confirm the existance of this hybrid version of the software as it work great for cash businesses that have a lot of expenses invoices.

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Replying to Mr_awol:
Glenn Martin
By Glenn Martin
06th Apr 2018 09:04

Mr Awol I have confirmed with Xero that there is no such version of the product that is the standard version less sales invoice functionality.

The bureau version of the software is available at a discount if you commit to 100 licences at discounted rate for in house use, but only read only access to your clients which wouldn't really work for me, as I prefer some client engagement in the process.

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Replying to Kent accountant:
Teignmouth
By Paul Scholes
05th Apr 2018 09:57

Hi KA - there's a volume/size element in all this. Once you hit a certain size then, as you say, the cost of what you buy in to directly provide client services becomes just an overhead and this is how I worked it in the early days with FreeAgent and Xero.

But even then the incremental cost of converting the next client to say Xero, was a consideration to me, at only 15% discount, it was an expensive additional cost just for basic bookkeeping and so I looked around for a cheaper alternative that would still provide what the client needed and found CB that actually did more than Xero at the time at half the cost.

Had I been a far larger practice then, you're right, the cost would not have been such a significant consideration.

But even for a large practice surely, at some time cost has to be a consideration, what if Xero took the Iris route of increasing costs (decreasing discount) by 6% pa, or there was clearly a Xero II on the market at half the cost, even an accountant must see the sense in saving a few quid, if not then maybe Xero has become a cult?

There is still a huge number of businesses using paper, spreadsheets, and deskbound software for whom Xero etc will just be too expensive or who will not be able to afford the fees of larger practices who can buy in Xero at a good discount and this is where the newer entrants will clean up.

As I say, Pandle costs me £2.50 pm for one or one hundred clients and I'm anticipating that in 6 month's time it will not only be be a direct competitor for some of my Xero and CB clients but will easily suit my non cloud users.

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FirstTab
By FirstTab
06th Apr 2018 13:38

Hello

I spoke to my ex-employee again. He is Xero certified, He knows what he is talking about.

He confirmed they have unrestricted bureau license not what others have been informed by Xero.

There is something odd going here.

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Replying to FirstTab:
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By Mr_awol
06th Apr 2018 21:39

Exactly what I said.

It’s nothing shady but you will have to buy the block to get that price for all

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ALISK
By atleastisoundknowledgable...
06th Apr 2018 22:22

From my ‘new’ account manager:

“To add a 100 subscriptions I think you have been made a wear of is the bureau pricing plan where the client has read only access to Xero and can not process any sales or purchase invoices, are you currently doing all the bookkeeping for your clients?”

“The client can refresh the bank feed but that’s the only access they
Can have to Xero and they are unable to reconcile the bank or use the cash coding functionality.

The price is discounted purely because you are doing all of the work.”

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FirstTab
By FirstTab
06th Apr 2018 22:36

Response from my ex-employee: "All our clients are using it just as any other normal subscription".

Knowing my ex-employee I will go on his word and NOT Xero's.

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Replying to FirstTab:
ALISK
By atleastisoundknowledgable...
06th Apr 2018 23:52

Interesting... sold.

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Replying to FirstTab:
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By Cheshire
07th Apr 2018 01:21

Make an official complaint and tell them you are on a forum for Accountants and are posting about their 'doings'. Worked for me recently when sage bod was trying to tell me black was pink.

Doesn't always work, but worth a try!

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Replying to Cheshire:
FirstTab
By FirstTab
07th Apr 2018 09:00

I have no doubt this thread is being read by Xero senior employees.

With Xero, it does not work. Unless of course, a large number of their customer base raise it as an issue. It will not happen. They appear to accept Whatever Xero says.

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Replying to FirstTab:
Man of Kent
By Kent accountant
07th Apr 2018 09:49

If you have an issue speak to Xero instead of moaning about it on an internet forum like an old woman.

Apologies to any old women who may be reading this...

...doubt they are...

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Replying to Kent accountant:
FirstTab
By FirstTab
07th Apr 2018 09:52

Personal insults, defense of the weak.

I am speaking to Xer0.

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Replying to Kent accountant:
Teignmouth
By Paul Scholes
07th Apr 2018 10:12

Are you really saying that elderly women moan more than elderly men? Maybe you talk to too many men?

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Replying to Paul Scholes:
Man of Kent
By Kent accountant
07th Apr 2018 11:24

I obviously go to lunch with the wrong crowd...

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Replying to Kent accountant:
Red Leader
By Red Leader
07th Apr 2018 15:34

.

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Replying to Red Leader:
Man of Kent
By Kent accountant
08th Apr 2018 14:34

Oh...hello...

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Replying to FirstTab:
ALISK
By atleastisoundknowledgable...
07th Apr 2018 09:53

Xero CEO Gary Turner responded to a thread that FT started in 2011

https://www.accountingweb.co.uk/any-answers/thinking-about-xero-for-a-la...

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