Online accounting software provider Xero (XRO) announced that it now has more than 20,000 paying
small business customers. This compares with more than 17,000 reported at 31 March 2010 and 2,000 back on 21 August 2008.

The short of it is xero is changing the way accounting works, disrupting the 'norm' or 'standard' and creating new practices.

Traditionally accounting practices have been set by a few big players in the software market, they dictate how accountants and clients interact regarding their books, You might know them as Quickbooks and MYOB, the good news is that xero is here to break that mould.

All of this comes from their cloud based solution, a single ledger online that allows multi-user access including your accountant at the same time.
No more sending your books to them to process, or them making corrections that never get entered back into your company file.

From a recent blog post on xero's website - http://blog.xero.com/2010/06/20000/

The first disruption was having a single ledger that reduces the cost of sending data between accountant and customer. The $200-500 in fees just to get the data has trained small businesses not to use their accountant for management advice. It’s fantastic to see accountants taking advantage of being connected and really becoming the trusted advisor that small businesses want.

The second disruption we’re starting to see is client-side and accountant-side products coming together. Under the desktop model a small business buys its own software, and the accounting firm buys some very expensive final accounts and practice management software to reprocess the books. With a single ledger that goes away. As the ledger has already been paid for, turning off accountant-side software cost is compelling, especially as these are set to increase for the desktop software model. Some of the established software products for accountants will require upgrades to server hardware, including running their own SQL databases which accounting firms need to pay for and maintain. Right now we haven’t totally replaced the accountant-side features but we’re getting there and are committed to ensuring our partners continue to benefit from joining the SaaS (Softare As A Service) movement. So we see 2011/12 as a big period of change for practices.

This is just a small sample of what's possible using xero to automate bank feeds.
(How to dramatically reduce the time you spend reconciling bank accounts)

Automatic Bank Feeds from Xero on Vimeo.

So the questions to now ask yourself are:

• Does my accountant know about xero?, If not why not?
• How much do we currently pay for software that requires constant upgrading & licences?
• What about the hidden costs to support that software (Servers, Backups, Etc)?
• Would having remove access and management reports from anywhere, even from my iPhone/iPad empower me in my business?
• When will I be making the switch to xero?

My Answer...
Right now.

Clint Davis
CEO, Greymouse Teleconference