Xero’s framed itself as the default choice for millennial SMEs. It’s techy, trendy and sleek, with a cult-like following of accountants singing its praises.
Being a Xero accountant has become, to many firms, a shortcut to showing the world that you’re modern, different and forward-thinking – not your stuffy accountant with a spreadsheet, but someone who’ll streamline your accounts and shake up the way you do business.
But does using Xero automatically make you modern? And these days, is its culture really any different from the likes of Sage or Intuit?
I’m not so sure.
The Xero story
Xero emerged into the accountancy software market in 2006 as a disruptor.
It was the first to seriously kick off the cloud accounting trend, bringing small business accounts out of the slow-paced, office-bound world of desktop software and into an era of real-time information, stored online.
Xero saw the potential of the cloud before its competitors, who had been producing desktop-based software for years. And for its customers, this new way of accounting was a revelation.
No longer did they have to install their software on one computer and come back to it any time they wanted to check their accounts. No longer did they need to copy information over from bank statements or remember to back up their files.
Many of the tasks accountants and SME owners had been doing manually for years were automated away, giving them time back to focus on what they wanted to do – spending time on hobbies, with family, or developing their business.
What’s more, the immediacy of the information pulling through automatically from bank feeds or add-ons meant accountants could give businesses a better service and deeper insights, based on accurate information.
In the years that followed Xero’s launch, other cloud solutions began to appear on the market. Intuit had actually launched QuickBooks Online in the US in 2001, but it hadn’t focused heavily on the product and take-up had been low – it only brought this package to the UK in 2011. Sage released Sage Business Cloud (then known as Sage One) in the same year.
Just a Xero reseller?
Now, here’s a disclaimer. I use Xero. I think it’s good software that saves a lot of time compared to the older packages.
But it’s not a brand-new idea anymore, and it’s not unique. There are plenty of accountants who work with Xero, but who are in all other respects the same old-fashioned, traditional accountants they were before they started using it.
The problem is that Xero and other providers have effectively made many accountants into software resellers. They’re rewarded for peddling the software to their clients, but there’s no guarantee that they themselves are progressive or forward-thinking.
They might be saving some time on manual input, but are they passing that benefit on to their clients, too? Do they proactively look for opportunities to achieve their clients’ goals and offer advice, or do they only get in touch once a year when it’s time for tax returns?
At this point, using cloud accounting software is really nothing to brag about – it should be the baseline. Beyond that, a truly modern accountant needs to think beyond Xero.
They need to be involved in the wider fintech world, understanding how new and emerging technologies can help their clients. They need to be able to add real value through data-driven advice, without waiting to be asked.
What’s more, they need to relate to their clients as human beings, supporting them and offering reassurance, but challenging them when it matters.
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