The conglomeration of New Zealand Government agencies now called MoBIE (Ministry of Business Innovation and Employment) has produced an information-dense infographic about small business that is worth wading through (more info on MED site):
It’s excellent to see the government putting a focus on the small business sector, not just because it’s Xero’s target market, but because, as the results themselves point out, 97.2% of enterprises in New Zealand fit this category. If we want to really grow our economy then making this sector more efficient will make a big difference.
Of course just because small business dominates every industry by number of enterprises doesn’t mean they’re producing the most GDP. The larger companies still dominate the stats, including with respect to innovation and exporting. However, the infographic shows that enterprises with less than 50 employees are creating nearly half the jobs in the economy and a third of the GDP. Also, while the amount of innovation is pretty static in this group over the period 2009-2011, it actually fell for larger firms.
It’s been almost a year since I left Intuit and put on my Xero T-shirt and oh how great that year has been – beautiful online accounting software, wonderful people, incredible growth and, most importantly, amazing customers. The days of desktop accounting software are behind me (more like a sunset), and online accounting has been the dawn of bigger and brighter things.
But there are times that I am brought back to my past – a past where I spent over eight years driving a desktop vision. Fortunately this does not bleed into what I do at Xero, but I notice the differences when I talk to those that are looking to switch.
One of the things I talk about is that as a business you only use one version of Xero and you access it from anywhere. This has been particularly relevant over the past few weeks, with Intuit contacting users who are on a 3-year-old or older version of Quickbooks and telling them that online services associated with their software are being discontinued.
The Xero community has spoken and we’ve listened. We’re pleased to have ticked off 16 of the most requested new features and updates today based on feedback in the threads in Xero Community.
Of those requests, one has a certain … history.
Since I started at Xero over 3 years ago, it’s been the itch in the middle of my back – the one I can’t ignore but is difficult to reach. The issue I’m talking about is the much discussed Unreconcile button on the Account Transactions screen. A seemingly simple problem to solve but one that spawned many a whiteboard session to find a solution we could all agree on.
One of our team caught up with accounting partner Martin Dowse at last month’s Xerocon in Auckland, New Zealand, to discuss Martin’s thoughts on the subject. Martin has been particularly persistent and inventive in trying to get this issue sorted – his latest attempts include vote rigging and smuggling his son into our development team!
I’m sure you’ll be glad to know that amongst the features and updates we’re releasing today we’ve done more than just update Martin’s pet feature request.
Read more about Accountants
Our recent survey to over 400 accounting professionals reveals that Spaghettios, weddings and dog clothes are just some of the tax deductions people imagine they can get away with. Which shows that if you’ve ever tried to claim an unusual tax deduction, you’re not alone!
This year’s survey provides an update to a similar survey we commissioned last year. The year-on-year data provides interesting insight into changing perceptions of the cloud as well as where small businesses are going wrong. As well as the fun responses, the research highlights just how much pressure small businesses are under in the US this tax season, especially due to the demands of changing government regulations and tax policy.
We’ve put together an infographic to illustrate the key results:
A key output of the survey is the biggest mistakes that small businesses are making. Top of the list is not keeping financial records up-to-date, followed by a lack of understanding about tax obligations.
In February, the talented team of Josh Farmer and Nadim Malvat introduced Xero Business Essentials, a series of videos explaining, demonstrating and generally enlightening users or potential users on the operation of Xero for business. Now they bring their same dry humour, radio voice and beautiful animations to these videos for Xero Australian Payroll.
These videos will be incorporated directly within the application in an upcoming release, allowing users to get extremely useful video content, directly relevant to their current page.
Shortly after the recent horsemeat scandal broke in the UK, predictable changes in buying behaviour started to surface – such as a 43% drop in frozen burger sales. Now, while the follow up story is hardly surprising, what’s interesting is the speed that this data was captured, analysed and published.
Anecdotal evidence suggests that local butchers are doing quite well out of the whole mess – but that’s all it is – anecdotal. There’s nowhere near the same infrastructure around small businesses to give the equivalent insight. The reasons why are obvious, but it doesn’t mean the need isn’t there among SMEs for up-to-date, contextualised information.
What’s exciting about the space we’re working in, especially as an ex-accountant, are the sophisticated services we can now offer to small businesses – partly through software previously only available to large organisations and partly though accountants no longer working with one hand behind their backs.
Using current affairs as an example, a well armed accountant would be in a good position to give their butcher clients some support right now. Is it right to hire more staff? What do we do with this extra cash? Are we gaining as much business as other shops? What’s the tax hit going to look like and what can we do about it?
Some great news today in respect to storage of data offshore. New Zealand’s Inland Revenue Department has released its Statement of Standard Practice on the “Retention of business records in electronic format, application to store records offshore and application to keep records in Maori” (SPS13/01). We’ll link to this document when it becomes available online.
Of course at Xero we are particularly interested in the offshore storage aspect of the document. This has been a topic of discussion for some time and was a classic case of the legislation lagging behind the technology.
For those newcomers, the Tax Administration Act 1994 (TAA) was amended on 2 November 2012 to enable the Commissioner to authorise “persons” (like Xero and other SaaS providers) to hold, on behalf of taxpayers, records outside New Zealand.(see Section 22 of the TAA). The IRD have now released the Statement of Standard Practice setting out their requirements to enable them to provide authorisation under the Act.
As many of our users – small business, bookkeeping and accounting professionals – experience, we’ve built Xero so it’s dead easy for a small business to understand their cashflow, but we’ve also built a full double-entry accounting system and client management system for accounting professionals. We truly believe that small business are more successful when paired with accounting professionals, and our software design reflects this.
As many small businesses know, the accounting professional you work with is in the best position to be the trusted advisor for your business. It’s not your bank manager, nor your lawyer, it’s your accountant. They are there to help. They are there to get you more money back on your tax return, help when you need to get a loan, turn around a cash projection, and some will even collect debts.
I always encourage small businesses to work with accounting professionals and get some good advice. It’s tax time here in the US and with the March 15 deadline looming, I was asked to do an interview on Fox Business Online. You’ll see more of the same message about linking small businesses with accounting professionals across the globe in here (1 minute in for 7 minutes).
For those small businesses that are looking for a high-quality, forward-thinking accounting professional, check out www.xero.com/advisors.
We’re proud to announce that CPA Practice Advisor, one of the USA’s most prominent accounting publications, has given Xero a glowing 5 star review. The only other online accounting application to receive 5 stars was Quickbooks Online. Xero has been going for 7 years and on the ground in the US for just over a year, while Quickbooks Online launched back in 1999.
CPA Practice Advisor notes “The investments Xero are making are causing the entire online accounting small business segment to be much more competitive than in prior years.”
Whether you choose Xero or another solution, moving to the cloud is making small businesses at large more efficient, and that’s good for everyone. In the US, more than 95% of businesses are classified as small businesses. Together they contribute to over half of annual GDP.
Read more about Accountants
There’s been a lot of back and forth this week following the news that Yahoo’s new CEO Marissa Mayer, had invoked a company policy change which in general terms required all Yahoo’s remote workers to relocate back to the company’s headquarters and other primary locations.
If the first part of the edict wasn’t interesting enough, the implication of not relocating – regardless of the basis upon which you were hired by Yahoo – was that employees would be advised to seek alternate employment.
The key paragraph from her memo says:
“We need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.”
The general reaction to this news has ranged from:
- A confirmation of a long lingering suspicion that working from home is the productivity equivalent of The Emperor’s New Clothes and Mayer is right to call it thus.
- Yahoo has totally lost it.
I think there’s another, more plausible justification which I’ll share in a paragraph or two’s time.