Xero Raises Another $150M to Do Battle With Intuit in Online Accounting Software

This worked for Mint. I am less confident it will work for Xero, even though many startups/small businesses (myself included) want an alternative to Quickbooks.

The article didn't mention this, but one of the most important selling points is not how it looks to SMBs, but whether or not banks and accountants will work with it. I remember reading somewhere that 90% of small business accountants integrate with Quickbook files or Quickbooks Online. Getting accountants to start using a new system will be a tough sell, especially if only a small number of early adopter clients are there to begin with.

While it may be possible to encourage SMBs to switch to Xero-based banks or accountants, that's a large step for some. I use a neighborhood bank for business banking services (augmented by Dwolla) and a local accountant team that is pretty sharp. Switching is not only a PITA, there's also the risk that a new bank and accountant may be lacking in other areas, even if they support Xero.

"There is a daily limit of 1000 API calls that a provider can make against a particular Xero organisation in a rolling 24 hour period."

That is an absurdly low limit for anything but the simplest of businesses or businesses that aren't actually looking for tight integration, but rather just something to push accounting data to at the end of a day.

[0] http://developer.xero.com/documentation/getting-started/xero...

I've meet him a few times when I lived in Auckland (New Zealand) and approached him for advice when I was fresh out of University. If New Zealand wasn't such a small place getting access would have been impossible but Rod was really approachable and I was lucky enough to meet him over breakfast and get some entrepreneurial advice (this was about 7 years ago).

Some of the most memorable things he said to me at that breakfast was that entrepreneurs are fundamentally unemployable. I inferred from that statement that being an entrepreneur was going to be the only compatible career path for me (at the time I was considering going into investment banking). At the time I didn't heed his advice (well I was an impetuous youth) and I went to work for a discretionary fund manager but with the benefit of hindsight he was quite right. I really didn't like working for others.

The other thing he said was that I was probably too young for entrepreneurial success and that there's a certain element of experience needed for entrepreneurial success. I'm now a bit older and a touch greyer and with the luxury of hindsight I can now understand what he means. Now in my early 30s, my approach to launching my start up is a lot different to what I was doing in my 20s.

https://www.google.com/finance?client=ob&q=ASX:XRO

1) It syncs with HSBC bank (we chose HSBC as it syncs with Xero)

2) It syncs with PayPal (we chose PayPal as it syncs with Xero)

3) Our accountants ( http://ihorizon.co.uk/ ) use it heavily

4) It has an API

My goal in choosing an accounting tool is to have visibility and centralisation to ensure that the key people in the company have information instantly about cash flow, assets, the books, etc. And it does all of this really well.

The areas in which Xero is a PITA for anyone considering using it:

A) Expenses.

B) API limits.

C) Payroll

On expenses, the cycle is a long one and unfortunately expenses in Xero are such a mess that our accountants urge us to use an Excel based spreadsheet that we print and complete by hand, and then post to the accountant for processing. Then the accountant summarises the expenses and enters it into Xero. This sucks big time. One of our goals in choosing Xero is to ensure that we can see all of our costs clearly. We want to be able to answer questions like "How much are we spending on air travel?" and if expenses are summarised we lose that insight. Expenses in Xero are non-editable, which makes them very hard to fix when an employee enters in something wrong. We're not talking about fixing the payment amounts as payments would have been made already, but fixing categorisation, VAT (sales tax), etc.

On API limits one of the driving reasons to select Xero was to have the capability for a company dashboard in which revenue, recurring revenue, runway, etc is displayable on the single dashboard along with customer metrics, operations information, etc. We even want to eventually have monetary events in the company books charted "there was this spike of customers due to this Slashdotting, that led to this operations load which in turn did this to the revenue" (or not as is likely the case). The API limits are way too low to be useful, to the point that right now we've not actually built it into the dashboard. The limits are such that developing against the API isn't as trivial as calling it and fetching the numbers, now we'd have to build our own storage and design that schema, etc. It's gone from a quick extension to the dashboard to a more significant piece of work.

On payroll, Xero does not implement any real capability other than recording that payroll has happened. That our accountant still uses Sage ( http://www.sage.co.uk/sage-50-payroll ) to calculate payroll and generate payslips and payment instructions shows how useless Xero payroll is. It's not even fit for purpose, they built the first 80% (recording it and issuing payslips, etc) but not the ability to calculate it.

I don't know how the main UK competitor stacks up against Xero, but I've looked at Kashflow ( http://www.kashflow.com/ ) a few times and would probably try it out in parallel to Xero for a while if they'd complete the picture above and weren't using SOAP for the API.

Xero is a love/hate relationship, it's good but the limitations are awkward and inelegant. It feels half-baked in many ways, parts of Xero are nearly perfect, but other parts look like a first-stab that after 3 years of using it it has become clear that no-one is going to finish.

Anyone have any thoughts on features/prices of these?