The Xero Roadshow London was held at the British Museum. The attendance was more than 400 people, almost twice the number that attending the main conference Xerocon in 2012. If it had been much higher even the overflow auditorium would have filled. The event allowed Xero partners the opportunity to learn about the latest news from Xero, the future of Accounting and to network together.
Gary Turner kicked off the event speaking about the latest results and how Xero is maintaining its growth trajectory. Xero now has 164,000 UK subscribers and a network of over 25,000 accountants and bookkeepers. Impressively at least 1 in 7 software filed VAT returns are now done by Xero. While this statistic sounds impressive even Turner admitted that the majority are not submitted using software.
In one of the few references to rival Sage, Turner was keen to point out that in Google Trends searches, Xero now outnumber Sage.
Making Tax Digital
Turner spoke about the Making Tax Digital initiative, something Xero are involved in, and which will eventually arrive. In theory the first quarterly tax filing for companies is in April 2018. He acknowledged that there is still a lot more work for HMRC to do though. Turner also commented that it might not happen in 2018 especially as the consultation period only closed this week. He was also keen to point out that while Xero are working closely with HMRC they are not employed by them. It is the accountants that Turner feels responsible to and he will look out for them in the discussions.
Machine Learning in Xero
One of recent enhancements to Xero that was greeted by cheers when it was originally announced was “find and recode”. That this was the one feature mentioned during the education element of the event that all the room had all heard of and used. It also says something for its success. Turner mentioned that every month accountants use the feature on 3,000,000 transactions. This brought gasps from the audience as prior to the feature existence, accountants had to do the double entry work manually to correct client errors
Turner then said that rather than making it easier to fix the problem the next step was to remove the problem completely. The challenge is how Xero and most other companies present what is called the chart of accounts to users. The chart of accounts is a list of codes that are mapped against every type of expense, revenue, asset and liability. It is what controls the double entry bookkeeping system, that accounting packages used.
The problem is that users often incorrectly code their transactions not understanding that they have selected the wrong code. This often arises as the descriptions against codes, understood by accountants are misinterpreted by users. Often wondered what those three numbers mean against an expense line? It’s part of the code for the chart of accounts.
Xero intends to use machine learning to identify which coding should be applied to each transaction. This will be based on the details such as historical entries, supplier name, customer and other criteria. The goal is simple, remove the chance of an error being made in the first place by the application of what accountants (and probably only accountants) would call common sense. Accountants would still have access and no doubt some transactions would be wrongly coded but this is about continue to reduce the manual labour for accountants.
New partner program
The new partner program has taken time to arrive. It was developed with the help of 3,500 surveys and 300 workshops with 350 beta users across five countries. There is a new adviser directory that Turner encouraged the audience to apply to join. This was not it appeared an onerous task but one that would allow small businesses to find the best adviser based on expertise and locality. The new adviser directory is due to go live later in the year. Currently only 1 in 4 Xero partners are actually on it, potentially missing out on business.
There is also a new points system that gauges where partners are. Partners can also earn the moniker ‘Xero champion’. Xero champions are those companies that bring in even more customers and businesses. Like the standard partner programme there are bronze, silver and gold levels. The system was trialed successfully in Australia and is about to roll out across the UK.
Turner also spoke about Xero HQ. This is launching at the end of November. The portal provides partners with a single view across all their clients. That list can be filtered by industry or other criteria as well. They can run reports on the data using analytics to identify trends in industry and geographic sectors they work in. There is an activity feed that will identify which clients have unreconciled bank transactions. This allows work to be prioritised and addressed before it becomes a major problem at the end of quarter or year. Future enhancements will come in 2017 and are likely to include notifications from the system.
What really excited Turner was the move from Rackspace to AWS. It was a major project lasting several months and Turner is clearly pleased that it is nearly over. Xero have migrated between 20 and 30 thousand customers each weekend and they are only now completing it. Turner explained that the benefits are not just a faster platform with greater scalability but that there are extensive add-on solutions. Access to AWS analytics and an IoT platform are things that Turner expects Xero to leverage in the future.
One of the few gripes in the room was about live Bank feeds in the UK. They have watched announcements about Australian and even US banks having live feeds into Xero and clearly want them in the UK. This is a problem that Xero are aware of. In Fact Rod Drury, CEO was in the UK the previous week and talked to all the major UK banks about direct feeds. The biggest pain point was Lloyds bank according to an audience comment. Edward Berks UK sales Director at Xero said that for the first time Lloyds were not just receptive to the idea but wanted to move forward. The reason for that is the fact Xero clients have been very vocal about wanting the feeds, far more than Quickbooks or Sage clients.
Berks did acknowledge that it would take time, probably months for the work to be complete. In a side conversation with Xero, Enterprise Times understood that this is more to do with the architecture and age of the banking systems in the UK than Xero.
With only half the afternoon gone, the audience were well informed and educated about progress at Xero. The mood in the room was buoyant. Those present clearly agreed with Turner that they were ahead of their competition in being cloud ready.