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KPMG partners with Xero for SME offering

31st Mar 2014
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KPMG has announced a strategic partnership with cloud accounting application Xero, in which the Big Four firm will provide online accounting and tax services to small to medium sized businesses. 

The services will be available from May and include accounts, bookkeeping, payroll, VAT and corporate tax.

The move is part of a programme of partnerships by KPMG to increase its client base among small and medium sized businesses. The Big Four firm has also recently opened a permanent high growth technology group KPMG in London's Tech City.

Xero UK managing director Gary Turner said it is a "big tick in the box" for the software firm, and a significant move for cloud adoption among larger accountancy firms. 

"This is a big sign we’re approaching some kind of tipping point for cloud adoption. Up until now it’s been smaller and medium size practices being the first to embrace it. When a Big four firm makes the move, that means there is something fundemantal happening in the market. 

"We expect that this will also be a great source of new customers for us if KPMG is successful with their SMB offering," he said. 

Turner added that the deal may encourage other larger firms to consider cloud technologies, if they haven't already done so.

Xero has been in talks with KPMG since last year, helping the firm define its small business venture, Turner said.

Pricing and the commercial elements of the deal, including initiatives and other information will be available in May, when the project launches. 

KPMG UK chairman Simon Collins said the firm chose Xero as its cloud solution for various reasons, including it being "the fastest-growing and most comprehensive solution" in the market.

"Deploying cloud-delivered software to companies does not commonly require any significant capital expenditure, with most providers operating a pay-per-user or subscription model. This allows businesses to add and remove users as necessary, representing a highly scalable software solution," a KPMG spokesperson said. 

KPMG denied the suggestion that its small to medium size business programme would compete with smaller accounting firms, as its involvement with businesses will be purely cloud-based. 

"We see our role as a large corporate business, doing what we can to help support smaller businesses, particularly at the start-up level where we can use our scale and networks to help them with key issues such as finance, tax and accounting.  There will always be a place for small accounting firms and the support that they give to small businesses, particularly on a local and regional level." 

But it added that its technology-based model means that KPMG can offer "high quality accounting services" to smaller firms at very competitive prices.

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By carnmores
01st Apr 2014 16:37

nice on paper
But i suggest that its all window dressing, how on earth can SMEs afford £100 ph for an unqualified person let alone someone with experience

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By ireallyshouldknowthisbut
01st Apr 2014 16:41

.

My charge out rate over 15 years ago at KPMG as a newly qualified is still higher than my current one. not too worried quite frankly, as KPMG's idea of "very competitive" and mine differ somewhat. 

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By JC
01st Apr 2014 17:50

Competitive! ..

£250p/h in 1998/99 - They have always been totally rubbish at IT and way behind the curve. Their forte is firstly as a marketing organisation and second as accountants with IT being in 20th position and this is being clearly demonstrated here

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By Jekyll and Hyde
02nd Apr 2014 10:58

franchise operation
A franchise operation would work.

KPMG agrees a deal with zero to be the sole supplier of the software in UK. Small accountancy practices and their clients are already hooked but are allowed to service existing clients under the xero brand, xero brand will be discontinued for new clients.

KPMG operates A Franchise licence at a management fee of 5% of turnover to accountants and therefore has an exclusive Market for the specialist work and consultancy.

I could see a set up like this working for both KPMG and some smaller practices. It would also ensure that smaller practices can offer the services of some larger regional practices.

Just a thought

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By HUGH W DUNLOP
02nd Apr 2014 23:25

KPMG can offer "high quality accounting services"

Hope Mr.Brian Chapman is not one of their team. Perhaps they should look to the quality of their own controls before advising others.

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