With the Xero dealer conference coming up in NZ next week Xero have released updated customer numbers, with total paying customers up from 50,000 just 4 months ago to 60,000 now. 

That is a pretty staggering growth rate - up around 20% in 4 months.  Customer numbers have more than doubled every 12 months for the past 4 years (don't have March 2012 figure just yet obviously, but I am pretty confident it'll be a bigger not smaller than today's). 

Xero Customer Numbers

It seems to me that there is a huge amount of growth yet to come.  Xero haven't released a geographic breakdown, other than to say that 50% of those numbers are outside of NZ.  My guess - and it is only a guess - is that in Australia they currently have a market share of not much more than 2% - that is maybe 10,000 customers out of more than 500,000 businesses running an accounting solution of some sort (MYOB, Quickbooks, Saasu or other - and my focus is really on SMEs, so I am ignoring the larger systems run by most larger businesses).  

These figures are reflected in Viridity's experience over the past 12 months (obviously on a much smaller scale).  We have more than doubled our Xero sites in the past 12 months, and every one of these has been a new client to Viridity - we are not simply churning existing clients to Xero from other solutions. It is tempting to think the growth is all about the technology - that it is just about being a cloud solution.   But the message I get most frequently from clients is that this is not of itself enough.  What clients want is good quality, timely, commercially focused financial information. 

Viridity's focus has always been on commercial accounting.  We take the view that whilst compliance is of course a requirement, it is never more than the essential minimum.  Rather it is the ability to deliver management information to assist business owners understand and control their business that is of value to our clients. And I have yet to find a better tool for this than Xero!

Yes Xero may be "the world's easiest accounting software", yes it may be "beautiful accounting software", yes being "in the cloud" is funky, but this is just the enabler.  What my clients love about Xero (and the services we provide them) is the shift in focus from backward looking tax and compliance to forward looking financial business management advice.

Right now I have to say I am enjoying what I do for a living more than ever before.  Xero is the key tool that Viridity needs to really add value to clients.  And it is just going to keep getting better.

I have been a bit distracted this week with a couple of large new clients coming on board, so only now getting back to my wish list.

My next wish list item is really quite minor, and is driven not so much by the time saving (although that does add up) but by the consistency it gives to your accounts.  With consistent data going into your accounts you can generate meaningful information out of your accounts – and meaningful information gives you a critical advantage over your competitors.

One of the great features of Xero is that you can give your suppliers a “Xero key” so that their invoices to you can push straight into your Xero database, no need to rekey them.  They come in as draft so that you get to review and approve them (of course), but one thing is missing – the General Ledger code to allocate the expense to.  This is very often (although not always) the same code for any given supplier, so wouldn’t it be good if when I provide my supplier my Xero key I can also attach to it a default GL code?  When the invoice reads into my Xero file it is pre-coded, and of course if I do want to change it I can do so prior to approving the invoice.

Budgets & Forecasts

The budgeting module in Xero is easy to use and has some great time saving features – like that you can automatically copy data from one period to another, or that you can do so adjusting the amount (either by a percentage or a fixed amount).  Nice!

But there are some areas this could really be improved.  At present a budget can only be set up at a GL level.  Being able to create budgets at a tracking code level (where the sum of the tracking codes then automatically creates the GL budget) would be a great feature.  This would be especially useful for the many Not for Profit clients we work with (although I can think of lots of other clients who would benefit from this also).

It would also be great if a budget could be imported from Excel (hands up who doesn’t use Excel when creating a budget)!  I know Xero have on the drawing board the ability to “round trip” your budget – to export your current budget from Xero to Excel, to edit in Excel and then import back into Xero.

As this is a wish list (so I can wish away) I would also love to see multiple budgets (or forecasts).  Again thinking mainly of not for profits, where we frequently have to create a budget (that needs to be held as is for the whole year), but then also to set up and report against a forecast.

And finally enhancements to the integration with some of the add-on report writers.  At present we use a combination of add on reporting tools for reporting and forecasting to various clients.  Spotlight Reporting is a good tool for both board reporting and forecasting, and  Calxa is great creating budget plus a wide range of management reports.  But both of these are hampered by the Xero API not allowing (as yet) access to the GL by tracking codes, so we can only report / budget / forecast at the GL level, not by tracking code.

Would you make use of any of this?  Do you run a Not for Profit that needs to report at a more detailed level (acquitting funding, or reporting by program)?  Please leave your comments below.

News from my desk in Ouagadougou

My first week in Ouaga has disappeared in a flash, every day a new experience and something new to learn. The weather seems to be getting hotter with very little relief.  Although one exception was Thursday morning when I woke up during the early hours by the sound of thunder followed by pouring rain.  I opened the windows to the most beautiful freshness…everything was cool and bright.  But apart from the following day when it was distinctly cooler, the heat is inescapable even during the night which means using the air-con and/or fans.

Things in the office have also been interesting with each day passing without having spent much quality training time with the staff.  Of course politics always plays a part and as an outsider I have no idea what’s going on.  I keep in touch with my boss via SKYPE and when we discuss the various questions which arise in relation to how we can adapt Xero to provide the required local information Rhys can go on-line and look at the company I’m working with to see first-hand the situation.  Thankfully Xero is very adaptable so for example when a supplier invoice requires both VAT at 18% and WHT at 5%, Xero handles it well and the in-house accountant is very happy with the resulting invoice which can be printed and attached to the cheque.

Yes, everything is paid via a handwritten cheque here in Ouaga…that is unless it’s paid with cash of course.

An African weekend

My stay at Le Karite has been made more enjoyable with the company of Telse, a German woman who has lived and worked in various African countries for 10 years.  Telse has bought a car which means we can have a look around Ouaga.  Saturday night we decided to go into the centre of town to find the live music venue in a park somewhere that one of my local colleagues had recommended.   This is definitely the climate to eat and relax outside and we took advantage of the beautiful balmy night to order wood-fired pizza and a kir (French aperatif  of sauvignon blanc and crème de cassis).

Monday

Started in the office late on Monday morning as I was feeling a bit poorly, but I had contacted the accountant and by the time I arrived she was in the process of reconciling the Petty Cash account in Xero.  At the same time Judicael, her assistant, was preparing upload files for other various Advances.  Things seemed to be progressing well and it seemed beneficial that I wasn’t there the whole day.

By the time I arrived Sidonie had questions for me so we worked through a variety of things including creating bank rules in Xero, adding more details to transactions whilst in the process of reconciliation, creating new general ledger account numbers and generating bank reconciliation reports.  All really easy to do, and covered in just an hour or two of training.

Being in the same office as Sidonie and Judicael created a much more relaxed working environment and they love to joke and laugh about things as they work. It becomes more fun and due to the slow internet connection it doesn’t really interrupt the work.  I think this is pretty common in Africa and quite different to some of the offices I’ve worked in in Sydney.

And now to my last day in Ouaga - unfortunately my last dinner at le Karite Bleu was low-risk (tummy still not too good), so no Dorade, or Merou or the Capitaine which are all beautiful fish served BBQ’d with a sauce.  It’s plain white rice with some peas for me followed by peppermint tea.  But it was so lovely eating outside with Telse in the tropical garden after having enjoyed a magnificent full moon rising earlier in the evening.

Flying back to Sydney tomorrow, from where Viridity will continue to support this client on Xero.  It really is amazing to see how well Xero copes with what is a large and complex business – the owners love it, as they can keep on top of their business whether they are in the office, elsewhere in Burkina Faso, or (as at present) back in Aus. 

Not every new client comes with a trip to such a wonderful destination, so this one really was a bonus.  So much of the work we do with clients on Xero we can do remotely, but sometimes nothing beats getting on site, and I know this trip has laid the foundation for working with the client ongoing.  And best of all the cost of the trip (in both time and money) has been validated by getting such great feedback from the client, who is delighted with the work we have done. 

Now if we could just find a new client who needs onsite training in Paris  . . . .

Well sort of . . .

One of the things that I love about using cloud solutions is being able to provide services to clients anywhere, anytime.  In most cases this means providing them a far better (lower overall cost / much higher quality of information) service without necessarily needing to go to their offices.  But sometimes nothing beats getting on site, even when that means travelling half way round the world!

A few months ago we were approached by a client based in Burkina Faso (no, I wasn't sure either - click this link to see a map of West Africa) who had set up Xero for his business.  They were struggling to get their accounts up to date, because:

• They have 2 related companies with a large number of intercompany transactions
• The 2 companies are in different currencies (which makes dealing with all those intercompany transactions a lot of fun)!
• Much of the set up costs of the business had been incurred by the business owners (usually money spent in yet another currency), and had to be entered via a series of shareholder loan accounts
• And as if that wasn't enough, a whole range of other complicating factors!

Apart from numerous African languages, the official language of Burkina Faso is French.  Fortunately Elizabeth, one of the team at Viridity, speaks French fluently so has been able to work closely with the client's bookkeeper.  Over the past few months we have completed a large project to update their accounts, reconciling bank and other balance sheet accounts, preparing end of year accounts and so on. 

But now we want to help get their local staff working more efficiently with Xero - and sometimes nothing beats meeting face to face.  As I write this Elizabeth is en route to Burkina Faso (via a stopover in Paris, which she is very happy about).  She will be spending the next 10 days on site with the client implementing procedures, working with their bookkeeper and their local tax accountant to help them get the best from Xero.

So apart from clients in every state in Australia, we now have clients in half a dozen countries including Burkina Faso - and at least one member of the Viridity team has visited one of those overseas clients in person.  Does that qualify Viridity as a global business?  Ok, maybe not - but I think it does at least demonstrate one of the great benefits of using cloud solutions.

I have asked Elizabeth to write a post for this blog, part travel diary / part feedback on the project.  If you would like to read more of this please check back in a few days.  Hopefully we will get some pictures up also.

The whole team here at Viridity is excitedly finalising preparations for CeBIT which starts in Sydney tomorrow (and runs till Thursday).

We will be co-hosting a stand with our good friends from Wendy Field Business Services, and showcasing a whole range of solutions aimed at small and medium business.  So if you are interested in:

• Xero (for bookkeeping / accounting)
• Unleashed (inventory)
• Dremus (e-commerce)
• Paycycle (payroll)
• Any combination of these
• Or a range of other related solutions (such as reporting and CRM)

Please call by and talk to us - we will be at stand K43. 

If you haven't got a ticket yet you can still get in for free, as long as you book by midnight tonight and use a promo code.  If you don't have a promo code click on this CeBIT Sydney link, type "CeBIT promo" in the other comments field and we will forward one to you.

Looking forward to seeing you over the next three days!

A few days ago I blogged about new reporting options available in Xero from the last release – in the medium / longer term I think these will be a huge benefit to users.  But today?  Well I have just had an awesome Xero experience!

I have been running my accounts with direct bank feeds for ages now (can’t imagine being without this), but until today I have been downloading / importing my business credit card once every month or so.  But no longer!

This afternoon in Xero on my credit card account I clicked this button:

Which opened this screen:

I clicked Ok, and within 1 minute all my credit card transactions since Christmas were imported.  And within a few minutes they were all coded.  Magic!

And as of tomorrow all new transactions will feed in daily. If you think this would be useful in your business please get in touch, we would love to help get you up and running in Xero.

Forgive me for distributing a tweet thorugh a blog post!  There is a reason for this, first the tweet:

Heading off to the Xero dealers conference in Taupo, really looking forward to it! #Xero

So why blog it?  Well if you are interested in Xero, in what Xero can do for your business right now or what it might be able to do in the pretty near future please keep an eye on this blog or sign up to follow me on Twitter (Rhys2011).  I will try to Tweet throughout the conference, and within a few days will certainly post a blog of all that is new in the Xero world.

I am looking forward to meeting lots of other Xero dealers, to being able to hang out and chat with the guys from Unleashed, to taking a look at all the other third party applications which integrate with Xero.  It's gonna be a blast!

More to follow, or see you on Twitter.

So what happens if my internet access goes down?  This is a concern I often hear voiced with regard to cloud computing solutions, such as Xero & Paycycle.  But no one has ever asked me what happens if they get a power cut. 

I am writing this blog from a cafe 5 minutes walk from my office after – for the second time this year – my office experienced a power cut (this time it seems to cover a whole block of North Sydney).  But getting online was as easy as opening my laptop in a cafe in the next block.

Right now I can access all the data I have in the cloud: in the last few minutes I have logged into my Xero account, accessed a file a client left for me on Dropbox and have now uploaded this blog post to my website.  All whilst my office has no power – the only data I can’t access is on my office server!

So if you are worried about adopting hosted solutions because of concerns about internet access, maybe you are concerned about the wrong issue.  Based on my experience today locally stored data is harder to access, with something as simple as a power cut.

So much confusion about what is and what is not a cloud application – in just the past week I have seen two email newsletters suggesting that just because a your data is in a different place to you and can be accessed remotely this makes it a cloud app.  It doesn’t, it just makes it an application you can access remotely! 

And yes, this is an important distinction – let me illustrate this with a couple of examples of what are not cloud applications, then I’ll explain why this is important (to you, the user).

If you take a copy of a desktop application – for example one of the Microsoft Office products or a desktop accounting package – and install it on a server, then provide remote access via remote desktop or terminal services this does not make it a cloud application – no more than if you put it on a server in your office and access it from the building next door (or invite someone else – such as your accountant) to log in from their office.   So when you see someone advertising “hosted MYOB AccountRight” as a “cloud accounting solution” it’s not, it can’t be because AccountRight is a desktop package (a really great one, but a desktop package all the same).  Ditto with Quickbooks online – it is a desktop package, even when you access it via the internet.  

Not sure why this matters?  Ok, let’s see what this all means.  Last week I listed a few of the features of cloud applications:

• There is no upfront cost for the software, just a monthly subscription which helps with cashflow.  
• You do not need to install a server or any other IT infrastructure, again a big saving in cost plus this is a much simpler solution for those small businesses without an in-house IT team.
• You are able to access your data from anywhere, which is a great solution for the small business owner who wants to log in from home, or for businesses that run virtual offices.
• The functionality offered by many of these applications for a small monthly cost rivals what you could get from desktop solutions costing 10s of thousands of dollars.
• The ability to invite other users in to your application can provide you high levels of on-demand support at a very low cost (for example from you bookkeeper or from your account).

To these I would add a couple more when highlighting what the impact is for the end user of a employing a cloud application as opposed to a hosted desktop application.

• You can access your data from any machine – from a PC, or a Mac, from an IPhone or IPad.
• Many online solutions are designed to allow access from other “add on” solutions, using an “API” (or Application Programmer Interface) – whilst this is also possible with desktop solutions, it is in practice harder to achieve economically.
• One special instance of this is direct bank feeds – in the case of most desktop accounting software getting data into your software is done either by manual keying, or at best by a download and import process.  With hosted solutions bank transactions feed in directly

So what does all this mean for the user?  Well let’s narrow this down slightly to talk about cloud accounting solutions, rather than the host of other cloud applications.  For the user having their accounts in the cloud (rather than on a hosted server) means:

• Not having to buy software
• Not having to pay for annual upgrades
• Not having to pay additional licence files because you need more users
• Not having to run Windows software on your Mac (so that you and your accountant can share the same file)
• Not having to pay to large sums to have other applications integrated into your accounting system – examples of the types of systems that can integrate to Xero include payroll, inventory management, workflow management, e-commerce and so on.
• Never having to key another bank transaction (this is my personal favourite)!

For the user of one of these applications some of these differences will be critical to how you use the software.  For example if you work on a Mac but your accountant works on a PC you will not both be able to access the same file at the same time.   By having a direct bank feed (rather than having to download a file once a week, or once a month) and then importing this your data is always up to date.  Suddenly you can start to get some information from your accounting system to help you run your business better – or retain your financial advisor to provide this information for you, knowing it will be timely and accurate!

If you are interested in looking at a cloud based accounting solution MYOB have recently launched LiveAccounts, an entry level product, with a reduced range of functions at a lower price – perfect for the micro business.  Or for businesses that need slightly more from their software we recommend Xero.

Not sure which would be suitable for you?  Call us for a free appraisal.