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.

I had intended to continue my “Xero wish list” posts all week (and probably next week too) but in this post I am going to write a few thoughts on today’s new release from Xero – it includes a lot of new features (some of which were also on my wish list).

Over Payments & Prepayments

This was high on my wish list! Until now users have needed to use a manual solution for over or pre payments.  For example the customer owes you $300 but pays you $400 or they pay you a deposit for work you have yet to invoice.  In both cases the solutions involved crediting the payment to a balance sheet account (which you needed to keep reconciled) and then double handling the payment once the invoice was created, or to pay a refund.

Now you can enter the payment (as either an over payment or a prepayment, and if you are not sure which to use please get in touch), then when the invoice is raised Xero will prompt you to allocate the payment (or you can arrange a refund).

All of this works on the supplier side also, for example if you need to make a payment as a deposit but haven’t yet received the invoice.

Grid layout on send / receive money

Whilst this is a minor enhancement it does make data entry of spend / receive money transactions easier especially when they have to be split over multiple lines.

Wish List!

But that then brings me to a wish list item that I was going to put up next week – being able to attach documents to spend money.  When a supplier invoice is entered to Xero the user can attach a PDF (or various other file formats) to the transaction, saving the supporting document in the Xero database.  But you can’t do this with a spend money transaction, which is how many smaller businesses enter their payments to suppliers.

Would you like to be able to attach documents to spend money transactions?  It seems to me that this is a feature lots of smaller businesses could use.

Duplicate AP Invoice Check

Simple, but nice – enter a supplier name and their invoice number, if it has been entered before you’ll get a warning.  This will help you to minimise the risk of duplicated payments to suppliers.

Lots more besides

There are a whole bunch of other new features released I’m not going to list them all here as I wanted to keep this post brief, plus you can read these at on the Xero blog at http://help.xero.com/#Changes_23November2011

Customer Contacts

I love the way a contact in Xero is just a contact, not specifically a customer or a supplier – so you don’t need to set the same contact up twice if you both sell to them and buy from them.

But the fact that you can’t have multiple contacts (people) on the contact (customer or supplier) is a pain.  What about when you want to have the contact’s accounts department and the person who contracts your services.  Or what about when you sell to a large organisation and want to have each of their offices set up as a delivery address.

Related to this is the fact that the contact (customer / supplier) does not currently have a code, just a name.  This makes it very easy to use but also creates some problems – like if you have multiple contacts with the same name you cannot set them up using just their name.  This can also cause problems interfacing from other solutions if your customer changes their name.

So Xero, I would love to see Customers / Suppliers with (optionally) a code, then within each the ability to link to multiple contacts (which could be either delivery addresses or people).

Would you find this feature useful in your business?

Enhanced Expenses Claims

Just one more wish list item in the area of “money going out” (for now at least) is to do with employee expense claims.  Currently an expense claim is automatically flagged as payable to the person entering the claim, and it has to be paid individually (it cannot be included in an accounts payable batch). 

Within Viridity the entire company has access to the expense claims function, myself and my team enter our expenses via iphone (and with Xero Touch we can upload receipts into Xero at the same time).  You can see what a great feature this is in this video.

But some businesses want to have one person doing data entry of expense claims, or maybe the owner or a manager wants to get his/her PA to enter these.

So in my ideal world an expense claim can be entered on behalf of any employee, and then when it comes time to make a payment the expense claim should be visible in the list of accounts payable invoices and can be included in an ABA file.

Would these enhancements help you?  Do you already use expense claims?  Would you be more likely to do so with the changes above?

Purchase Ordering

Another one right out of the accountants manual!  Whilst Xero will let you enter customer orders and convert these to invoices, you cannot do the same thing on the supplier side. 

Most organisations that use purchase orders do so with inventory, and for those clients Viridity almost always recommends Unleashed which does support purchase orders.  But we do have a number of clients that want to raise purchase orders on suppliers for services. This helps them control what they are purchasing, and get costs on projects and events (so frustrating to send out the final invoice to a client on a project and then get more supplier invoices in).  It also speeds up the backoffice accounts payable - rather than having to manually key and code invoices, your bookkeeper can just check the invoice & if it is ok convert the order.

So please Xero can you give us purchase ordering?  Would you use purchase orders in your business?  Do you think this would be a good addition to what is already a great solution?

I do so love the speed with which Xero releases new features.  So far this year we’ve had a basic payroll (with a major upgrade now just a few months away), ability to save documents as PDFs live in the database, preparation of annual account, Xero Touch (awesome) and thousands of direct bank fees to name just a few. 

Does that mean I’m satisfied?  No of course not!  I want more, I want more features in Xero, I want more features in the wonderful apps that integrate with Xero, I want better integrations.  The good news is that lots of these are on the way. 

I tried to write my top 5 wish list of new features, but a) I couldn’t stop at 5 & b) I ended up with a thousand words, which is pretty long for a blog post!  So for the rest of this week and most of next I’ll put up a blog a day on new features I’d love to see in Xero.  Feel free to agree or disagree, roar with approval, howl me down or simply add your own suggestions.

# 1 - Remittance Advises

Ok, so it’s not very sexy, it’s not one of those funky features that stretch the boundaries of what’s possible in the cloud.  But gee, for simple value-add this feature is hard to beat.

Xero handles paying supplier invoices really well – you tick the invoices you want to pay, create an ABA file and upload that to your bank account and that’s it, your suppliers are paid (and when the payment reads in from the bank the following day it auto matches as a reconciled item on the bank account).  But what if you need to tell your suppliers exactly which invoices you just paid?  If you pay lots but not all open invoices, or if you part pay some of them this is a problem.  There is a work around (printing a report and pasting it to an email to send to the supplier) but an elegant built in remittance advice would be so cool!

 If you want to see what the current AP solution looks like take a look at this video.

If you are in favour of what the AP solution could look like leave me a comment - I'll feed these back to Xero in due course.

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  . . . .

To quote Lonely Planet ‘One thing Burkina-Faso lays claim to is having the capital city with the coolest name – Ouagadougou. And here I am on my first day in the job for Viridity and our client SGSS. Hot and muggy and at 8am the sun is already high in the sky.

A driver from SGSS picks me up and he navigates the wide roads which are a chaotic mix of motor-scooters, bicycles and motor vehicles...scooters way in excess, reminds me of Rome transported to the dessert. This is certainly a long way from the ordered and reliable roads of Sydney.

Head office of SGSS is situated in a one-story spacious building which feels more like an old residence than an office. There is a full-time security guard standing outside ready to open and close the front gates, always with a beaming smile and ‘bonjour’. Outside there’s also a donkey with a cart attached full of tree-offcuts...they provide cheap labour.

We’re at the end of the wet season so everything is still relatively calm with most of the SGSS workers not due back for a few days. I have an office to myself and thanks to the wireless network I can easily work on XERO and Gmail using my Macbook. The hours of work for the office staff are 8am through to 6pm with 2hours for lunch, which is provided by the company.

I feel quite at home in this relaxed environment and after an initial meeting with the local bookkeeper I start work on spreadsheets to create upload files for the various Cash Advance accounts. Due to the nature of business in Africa, the geologists and engineering staff take cash advances with them when out in the field. Unfortunately, these various cash advances haven’t yet been reconciled in XERO but I’m relieved to find a well-ordered paper trail to support the payments and some excel summary spreadsheets. The currency in Burkina-Faso is around 450 XOF (West African French francs) to 1 USD which creates scary looking numbers from a large volume of small-value transactions - petrol, juice, SIM cards, lunch at Mummy’s Kitchen, road tolls and ‘Courtesy Payments’ to name a few. I decide to sort and sub-total by account type then use the sub-totalled amounts for my import to XERO rather than importing 100’s of transactions.

We lose the internet connection for a few hours but that’s Africa. It comes back up....eventually. Everyone seems to work at a slow pace which I find a bit frustrating - let there be no rush, besides it’s too hot. I’m hoping I can get through all the work...

The major issue in relation to my scope of work is the lack of confidence shown by the bookkeeper in relation to XERO and it’s capability to provide the necessary reports for TVA (i.e. the local version of GST) requirements. At present she and her assistant use SAGE for A/P, A/R, Payroll and reporting the TVA. One of my jobs is to train and encourage the bookkeeper to input directly to XERO rather than in SAGE but she’s very concerned that it won’t do the job and wants to speak to the Tax Accountant before committing to anything. Meanwhile time passes...

A heavy downpour belts hard on the tin roof but it’s wonderful and I stop to enjoy the sound and the smell. When I leave and walk back to Le Karite Bleu guest house the roadside verges are now muddy red with puddles of water everywhere and the humidity is at sauna-level. I have to remember to buy a bag of peanuts from one of the street vendors on my way...and another bunch of bananas.