Accounting firms must sign 20 customers to Xero first.
Cloud accounting software vendor Xero announced at its customer conference in New Zealand today that it would give away practice management software to accounting firms that signed 20 businesses to Xero.
Xero revealed yesterday that it had bought job and time management software Workflow Max for $6 million in cash and shares. Workflow Max would form the basis of Xero Practice Manager, a version customised specifically for accounting firms.
“It’s a real disruption to the market,” said Xero CEO Rod Drury. “We think accountants are the powerhouse of the economy. We want to take the cost out of their software and give them the best tools to make them more productive.”
Xero was running a promotion for accounting firms where “if they give us 20 new customers they get practice management (software) free for life”, Drury said.
Building a practice management edition of Xero was a strategic decision that lay behind the acuqisition, Drury said. Xero now had a product that could displace MYOB Accountants Office and QuickBooks APS in smaller accounting firms, he added.
“The way that the accounting industry works is at the moment the small business buys QuickBooks or MYOB and the accountant has a few copies of it, all different versions, and then they have to buy a very expensive accounting firm software to process the same set of books.
“We’re writing out not just the accounting but their practice management software which is so intertwined. so it eliminates the double charging of software,” Drury said.
Drury claimed that New Zealand accountants were flipping quickly from MYOB Accountants Office and Accountants Enterprise to Xero and Workflow Max, which can upload electronic tax records to the New Zealand Inland Revenue Board.
Xero would use independent software vendor LodgeIT to upload electronic tax records from Xero and Workflow Max to the Australian Taxation Office, which operated under a different standard to its New Zealand counterpart.
Drury acknowledged that the Xero-Workflow Max-LodgeIT solution could not yet upload electronic tax records for personal income (known as I-returns) in Australia, a stumbling block for firms looking to move to the cloud-based suite.
“We’re working with LodgeIT to plug those holes,” Drury said, although he was unable to give a timeframe.
The Workflow Max acquisition gave Xero another software development centre in Auckland with the addition of Workflow Max’s management and staff.
For more coverage see Five questions on the Xero-Workflow Max acquisition