I first wrote this in July 2011, but have been updating it ever since. I increased my Xero clients 155% in July 2012 and more than a 100% in August. I tell clients it does not matter what programs they want to use (many use QuickBooks, so I have BestQuickBooksCPA.com and Best QuickBooks CPA, Inc.). However, I insist on using Xero to cut prices 25%+, check work and do far more during the year, instead of rushing after the year.
Even QuickBooks clients agree to use Xero when told that I have been miserable my entire career, due to grossly excessive year end work, vastly more chance of errors and the fear that I will miss deadlines and tax savings. My punchline is, "Why keep making me miserable and wasting your money?"
(The blog version of this is widely followed. On July 2012 and August 2013 Google had it first among 1.2 to 1,8 million web links for OMG Xero future.)
It is good to see this. The more our challenges, the better we often do.
QuickBooks made me a prominent CPA. I helped give Intuit tech-support-backed user-to-user forums (better and faster answers, while Intuit cut a seventh of staff). I also helped push Intuit into QuickBooks add-ons, which grew explosively when QuickBooks was near static. However, the proprietary, limited QuickBooks add-ons interface, changes and expensive charges are killing these add-ons.
Xero add-ons are growing fast, due to a free, simple, industry-standard RESTful interface, open multi-company data tables and its beutiful appearance. This is helping Xero small businesses improve on an old U.N. Committee projection (trillions in annual savings from uniform forms and electronic data interchange).
Xero uses Yodlee bank and credit card feeds, not crippled (read-only) Mint feeds. Yodlee ahs 35+ million users, major bank support and 12,000+ automatic daily bank, credit card, mortgage, loan, investment, insurance, PayPal and bill feeds. It could have been a dangerous Xero competitor, but recently said Xero was a preferred partner, so it should soon grow far faster than its recent 119% a year.
To the contrary, Intuit bought Mint for $170 million in 2009, to defend Quicken Online, only to drop Quicken Online without transferring user data. This was a waste, after my long 2005 talk with the top QuickBooks download person. He enthusiatically agreed with my suggestion to automate downloading all bank, credit card and other financial institution entries daily, as Mint and Xero did later, but we still do not have this in QuickBooks.
Intuit also bought Digital Insight for $1.35 billion (2006). It provides online banking for mid-sized and small banks and credit unions. Yodlee provides this to far more banks, including 300+ top banks, 5 of the top 10, plus 35 million individuals. That is why Intuit recently sold Digital at a $300+ million loss.
It also is why Xero is revolutionizing accounting. The Xero automatic daily bank feeds mean you never make checking, credit card, savings, mortgage, loan and other entries. Xero also has an easy interface, invoicing, extended reporting, expense claim approval, e-pay (and bulk e-pay), automated rules to classify imported entries, easy transfers between accounts, support and a multi-currency option.
This will soon give Xero far more users than the terrible QuickBooks Online (I prefer time with a dentist to QB Online time). Even if QuickBooks soon automates bank feeds for its desktop version, it has separate out-of-sync code bases for its seven international versions, so it was a shock to learn that Xero is already in 100 countries.
Here is one great way to understand the future of Xero. Intuit CEOs wrote this to me, “You’re fantastic Mike. Absolutely fantastic!” and “Keep raising hell when Intuit does something wrong!” They also let me post it to my website. My lead person has an MBA in finance from a top school. She has been an outstanding QuickBooks user, teacher and professional consultant for MANY years. Her initial reaction to Xero was,
She did not know I also concluded that, after reading an article by Doug Sleeter, the most prominent teacher of QuickBooks professionals, and doing my own reserach. This can only lead to continued explosive Xero growth. That is why Xero stock is up about 300% this year and far more in recent years.
Xero is near free automatic accounting, with real power. It should soon have more users than the very weak QuickBooks Online (I would rather spend an hour with a dentist than 15 minutes with QuickBooks Online). This is the first time since 1983 that every Intuit flagship product has not had a commanding lead teh in number of users. QuickBooks Online is adding users but has about half the percentage increase of Xero. Moreover, the Intuit CEO recently said he did not expect to upgrade it to match the features in the desktop version of QuickBooks.
Here is one more way to understand the future of Xero. The head of the Intuit QuickBooks ProAdvisor program (the top program for tested QuickBooks CPAs and other QuickBooks experts) recently left Intuit for Xero. He left Intuit because, as he said (and I say), Xero puts accountants first, "… it comes down to core competency… for Xero, it's the accounting professionals who are more forward-thinking, with clients who can appreciate Web-based bookkeeping… A year or so ago I checked what Xero could do… they are one of the few that had accounting professionals in mind… the time was right for change… I didn't want to lose the investment I made in myself, in helping small businesses thrive and helping the accounting community grow… Xero was a chance to be part of something amazing and change the industry for the better."
OMG! Xero is the future of accounting!
Later related posts on Xero, the future of accounting:
Daily CPA Accounting with Payroll: $125/month
(and many more)