Philip Fierlinger, Xero Yammer (2:44)
Henry Ford, the pioneer of what we recognise today as Lean Manufacturing, introduced a revolution centred around the elimination of wasteful processes more than a century ago. In his autobiography he explained the essence of it as:
I believe that the average farmer puts to a really useful purpose only about 5% of the energy he expends. Not only is everything done by hand, but seldom is a thought given to a logical arrangementhis whole idea, when there is extra work to do, is to hire extra men. He thinks of putting money into improvements as an expense. It is waste motion waste effort that makes farm prices high and profits low.
While I wouldnt suggest that Fords farmer is perhaps the best proxy for accounting, take a moment to look around your desk and office. Aside from the odd PC, Id bet that paper still rules the roost. But more than that, repetitive paper based processes and workflows still dominate the world of accounting and bookkeeping.
So, in a few weeks well be rolling a new capability to our UK customers which securely imports daily banking transactions straight into Xero. While weve had this running for over twelve months for the hundreds of Xero UK customers who bank with HSBC, the UK bank feeds release will enable this ability for most UK banks, credit cards and financial institutions. Around eighty new UK feeds will be added all told.
Cash is king. Providing the capability to check your live bank balance and cash transactions from within Xero not only means theres one less website to visit every morning, it also means that cash based businesses have a fully automated mechanism for loading, analysing and reconciling their cash. Instead of sitting down once a fortnight if youre lucky with a paper bank statment and then repeatedly manually keying, matching, marking and reconciling payments and invoices for each statement line, Xero will will enable you to do a bank rec in minutes every day. Not only do you save time but, critically, you get the benefit of complete, up-to-date visibility of cash.
Eliminating the need for accounts staff to manually capture, key and reconcile their clients accounts not only benefits the clients, but the internal practice efficiencies are multiplied many times over.
No. While every business will benefit from automated bank feeds, it stands that the more cash based your business is the more you will benefit. But we believe that loading and coding with automated bank feeds, coupled with the full accrual accounting capabilities already present within Xero, will eliminate huge amounts of wasteful re-keying of cash movements, as well as providing hyper realtime management reporting that is sourced from the real, current cash position not what it was weeks ago when you last did a full bank rec could be transformational for many small businesses.
We are really excited about finally bringing this service comprehensively to the UK market, stay tuned for more insight as we get closer to launch.
Part of our US strategy is to work with the best people in the Industry. Over the last few months weve had the opportunity to connect with some of our heroes a group of people that we believe are the global leaders in Internet. Were really proud that they are enthusiastic about our business, understand what were doing and that they want to help us.
Today we have a big announcement
Leading online accounting software provider Xero Limited [NZE:XRO] today announced that Peter Thiel, the San Francisco based investor and Silicon Valley authority, has agreed to invest NZ$4 million to support Xeros expansion into the US market. He will also join Xeros US Advisory Board.
Mr Thiel co-founded and led PayPal, the online payments company, which was acquired in 2002 by eBay for US$1.5 billion. He was also the first external investor in Facebook, and serves on its board. He is currently President of Clarium, a San Francisco based global macro fund manager.
The investment in Xero will be made through Valar Ventures LP, Mr Thiels New Zealand investment firm. Valar Ventures focuses on helping New Zealand companies in the post-revenue phase move into global markets. The Xero placement is the firms inaugural investment.
The capital raising, made via a placement, is expected to close next week and will be priced at NZ$1.4918 the volume-weighted average share price of Xero over the thirty trading days prior to 20 October 2010.
Millions of small and medium-sized businesses need an online accounting solution, especially in this time of increasing regulatory and tax complexity, said Peter Thiel. Xeros tight focus, robust product, and strong team should enable it to expand tremendously in the United States.
We are delighted to welcome Peter and his team at Valar Ventures as strategic investors in Xero, said Xero CEO Rod Drury. Access to their extensive networks will provide a major boost as we take on Quickbooks in the vast US small business market. We have taken a measured approach to our US market entry so far. With the support of Peter and his team, we believe we are now strongly positioned to enter the US and capitalise on the opportunity that this market represents.
In our home market of New Zealand weve been dialing up the awareness of a Single Business Number (SBN). An SBN is a public unique identifier for each small business.
Australia already has a Single Business Number (called the Australian Business Number ABN) as does Canada, the US (Employer Identification Number EIN) and a number of other countries. Where a Single Business Number exists, these have normally been created by Government departments for the purpose of making it easier to collect information from small business.
In a cloud computing environment, a Single Business Number comes alive for the small business owner and is a key building block for a number of new services.
One of the key differences between cloud computing compared to desktop software is your data can be linked to other information. Take for example entering a new customer. You have to know their name and address and if they move you may not know for several months. In the cloud it would be great to be able to connect to that customer and have their latest address details load automatically into your system, and if these ever change, have them automatically updated.
If a new customer approaches you with a large order, wouldnt it be great to do an immediate credit check. If they come back with a less than clear bill of health then you still might do the business but insist on a cash payment up front. Both parties win.
Another example is sending electronic invoices. It seems crazy that a small business creates an invoice in its own accounting system with structured data, then flattens that data into a paper invoice, which is essentially a picture, and then the customer has to retype that invoice back into structured data in their accounting system. (Weve started on this at simpleubl.org)
Wouldnt it be useful to have as the last page of your monthly management accounts an anonymous benchmark of similar companies in your space. You can see how well you are doing against your competitors and peers. That 1% growth youre achieving might compare with an industry average of -2%, showing that your strategies are working and you are gaining market share in a tough market.
The Single Business Number is a key building block for all these scenarios.
So what could the Single Business Number be? In New Zealand its likely to be the GST (Goods and Services Tax) number as its already a number that each business uses to interact with our Inland Revenue Department. There may be a suffix or prefix to make it match other international numbers like the ABN. There is some Government policy work required to enable the GST Number to be used for this purpose.
But that may be a too literal interpretation of a Single Business Number. Another candidate identifier might be the physical address of head office. Essentially this is a physical key that already exists for many businesses and can be easily populated using a geo interface like Google Maps.
Another alternative is the Companies Office record. In New Zealand the Companies Office has recently implemented a new Companies Register which could generate a unique url for each business. (e.g. business.govt.nz/company/xero2006). The problem is the Companies Office does not have a register of sole traders and partnerships and is therefore missing the majority of small businesses. A policy option might be to allow sole traders to (initially at least) voluntarily register themselves to obtain a validated listing in the Companies Register. We believe that providing certainty over who you are trading with is an accelerator for most businesses.
As anything involving Government can take a while, the industry can potentially just get started with some of these candidate keys and match them up later, but that is not as powerful as having certainty. We believe the traction cloud computing vendors are achieving creates the business case for businesses themselves to get interested in SBN. That leads to a massive opportunity for productivity gains and increased commerce for small businesses. We think thats important.
Let us know what you think. Were keen to understand if there is any resistance to SBN so we can talk through those issues.
Automated bank feeds are one of the joys of using Xero with no manual imports to worry about, bank transactions are automatically brought into Xero for you to reconcile.
With our first release of Yodlee integrated bank feeds, we can now offer automated feeds for even more banks in Australia and these feeds will be even easier to set up. With no forms to fill out, youll be up and running in minutes.
Heres a list of the additional banks and financial institutions from which bank feeds will be possible into Xero from today:
Over the next few weeks well be adding support for literally thousands of banks across Australia, the UK, Canada and the US.
Check out this video to see how easy it is to set up one of the new bank feeds.
We hope you find adding bank feeds really easy. Weve worked hard to hide the significant complexity behind the scenes to make these feeds as reliable and secure as we can. These new feeds use our secure banking integration environment, already approved for use by some of the largest banks in the region for direct bank feeds.
To learn more about how Yodlee works read one of our earlier posts. We are also releasing a new notifications inbox that provides an easy and convenient way to receive updates of any important changes in the status of your bank feeds.
Be sure to read our release notes for more details on the new feeds and a couple of other features weve added.
PayPal cofounder Peter Thiel is to invest around $4 million in New Zealand online accounting software provider Xero to enable the Kiwi firm expand into the United States. The San Francisco based technology entrepreneur and investor will be injecting the amount in aide of the Kiwi firm’s planed foray into the US market.
Peter Thiel is also a director with Facebook and will be joining Xero’s US advisory board. According to Xero, Thiel’s investment will be made through his New Zealand investment firm Valar Ventures. The capital raising, to be made via a placement, was expected to close next week, with shares at $1.4918.
Thiel, who helped set up online payments company PayPal and later sold it to eBay for US$1.5 billion, will buy about 2.7 million shares in Xero in a private placement to help support the company’s expansion into the US, giving him about 3 per cent ownership. The shares climbed 3.6 per cent to $1.54 in trading Friday, and are down 8.6 per cent this year.
With the support of Peter and his team, Xero reiterated its believe that it is now sturdily placed to enter the US and capitalize on the opportunity that this market presents, chief executive Rob Drury said in a statement.
Access to PayPal’s extensive networks will provide a major boost as Xero takes on Quickbooks in the vast US small business market. Xero entered the US market last year when it appointed Dell executive Andy Lark to be its first member on the company’s US Advisory Board.
In January, Xero entered into an arrangement with American online banking services provider Yodlee Inc. to offer its accounting system. PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. PayPal serves as an electronic alternative to traditional paper methods such as checks and money orders.
Thousands of individuals use PayPal to process their finances online. A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The recipient of a PayPal transfer can request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account.
With such an existing client base and network, the Kiwi firm is hopeful of increased business as it intends to use such established networks to garner additional business in the US market.
I have been working over the last few weeks on setting up ‘rules’ inside the Xero banking module on my own practice accounts and a number of clients. Today for the first time when I imported a bank statement I did not have to categorise ANY transactions. There was a rule in place for everyone.
All debtor and creditor payments were applied to the correct accounts. The credit card payment was transferred to the credit card account, the loan repayment went straight to the loan account and the bank charges were posted straight to the P&L. In busy offices I have often spent a full working day at a bank reconciliation with my pen ticking away at every line when I posted it and then again highlighting every line as I reconciled it. This bank rec involved no pink highlighters, no inky fingers and no half day bent over a paper bank statement. It was fully automated.
Does this mean book keeping is dead? For technology savvy clients the answer is yes. For the old fashioned Irish accounts ‘clerk’ with his red ledgers and tippex we could be waiting a few decades.
If you are interested in automating your accounts process please contact
firstname.lastname@example.org or call Ralph on 0863336665