Xero. The Future.
It's hard to believe that the web has been around for 20 years, but it's only in recent years that technology solutions that are changing the way we do business have been in existence. Xero has been at the forefront of harnessing the power of the internet to manage financial information, making the process simpler, faster and much more accessible. At the Xero conference on Friday 4 February, they outlined some of their development plans for the future. Key trends clearly show a move to a green virtual world with simplified electronic information transfer and delivery of more value-added services to users in the future. This post is to give you some feedback on planned developments for 2011 and beyond.
The ability to create your own reporting formats. The December release has paved the way to being able to develop customised report packs, although it will be while before they are fully customisable. This will enable users to produce individualised reports and will also lead off into other areas, like being able to produce farm accounts (these are complex, believe me) and also to produce consolidated accounts for groups of companies.
Xero is starting on their entry into the US market, so they've had to think about how they get banks onboard to enable bank feeds. They have done that through Yodlee - the world leader in online and mobile personal finance management and payments solutions. This will in turn allow for auto bank feeds from credit cards, and presumably also other banking institutions.
There will also be the ability to easily manage prepayments and overpayments by customers without having to do the gymnastics currently needed because the debtors ledger does not manage credit balances. This will all be done at the time you are reconciling cash receipts, in the reconciliation screen. Along with that, will also come the ability to manage discounts.
Budgets have always been an issue, but there are plans for multiple budgets, budgeting by tracking category (great if you're using them as cost centres), and two-way synchronisation with excel. I'm really looking forward to this!. By being able to do budgets by tracking category also means that you can keep your chart of accounts really simple, and use the tracking categories to be able to break your results down in more than one way.
There will be a very simple payroll function, but it won't have a lot of smart features (Xero has a number of partners than can provide great fully functional payroll systems) and is aimed as businesses with a small number of employees who get basically the same pay each pay-run. The point of this development is to start on providing fine-grained employee information within the accounting system, because wages are the biggest cost of most organisations.
Xero personal is also getting smarter - you will have the ability to manage business expenses paid personally & export those directly into Xero Business. They are bringing in labels , which is basically a tracking code, so that you can classify by type of spend and also across a category - eg find out how much you really spend at Christmas! Xero personal auto feeds currently are only available if you bank with the BNZ, but the Yodlee deal will increase the catchment area much wider.
There is already a Xero mobile app (m.xero.com) available, but not the ability to do anything other than view information. Xero is developing a new mobile app with the ability to create transactions or amend existing data. This app will be great for those with a mobile workforce who wish to remit expense claims remotely. Not only that, it can be completely green, but still meet all tax requirements. Imagine - you can prepare your expense claim, take a photo of the receipt, attach the receipt to the expense claim, and store the pdf in the cloud!
Xero is working with NZ Post to be able to address-verify businesses. One of the key trends addressed by Maurice Williamson was geo-spatial technology, and this fits right in with that. And the benefits for users? Quite simply, it's the ability to recognise other Xero users and have auto key swaps, so you can send invoices Xero-to-Xero. If you aren't already doing this, let us show you how it is currently managed. And the other benefit is that you know there is a real business at the other end of your transaction, and where you can find them.
A single business number, much like Australia's ABN, is also gaining traction, but it makes sense that it is in line with international standards . What's this got to do with managing my business finances, you may be asking. Well, a single business number will ensure that you know you are dealing with a real business, but would also include an industry classification. So if you wanted to join an industry benchmarking group you could get up-to-date, real-time benchmarks. And wouldn't it also be wonderful if you could provide and gather statistical information through an online business portal. And one of the areas where electronic filing of financial data would be useful is the ability to file PAYE and GST returns directly from your accounting system.
And finally, an app that we already have invested some time into - Spotlight reports, which graphically show where you have been and where you are currently going to. We've been beta testing these, so we know how good they can be. With full integration with Xero, you can see how your business is going, what trends are apparent, and focus on what needs to be done. We will certainly be a subscriber of this.
If you weren't already convinced that the internet is changing how we do business, then hopefully this brief summary of Xero developments will make you start thinking otherwise. There are increasing numbers of Xero partners who have developed applications that directly integrate and improve the quality of business information and therefore also business decision-making. Consider things like: retail & online point of sale/stock systems, wholesale/stock systems, service-based job management systems, customer relationship systems, payroll systems, time management systems, direct integration with website management and many more. And the wonderful thing is that many of these providers are NZ based and in the process of building international recognition of the kiwi-ingenuity brand.
In New Zealand we do have some impediments to being able to go fully cloud-based. Not least of which is ultra-fast broadband. But imagine, if you will, a world where you don't need to invest in servers, or face the high up-front costs of putting software on to desk-bound computers, upgrades are managed for you seamlessly, data is backed-up and safely stored offsite (on server systems), everything talks to everything else and you don't have the arguments about whether it is a hardware of software fault, and you just have a fixed fee subscription capable which can be upgraded as you grow, at the click of a mouse. Now, that's value.
P.S. Having an iPad at the conference sure made taking notes and shifting them to our intranet really easy. I love it!!!