Kiwiblog

The Dom Post reports:

Wellington web start-up Xero has announced plans to spend A$1.5 million ($1.9 million) buying an online payroll company. …

Xero chief executive Rod perDrury says Australian-based Paycycle is one of a number of companies providing payroll software that integrates with the Xero software and half of Paycycle’s customers already use Xero.

“Feedback from our Australian partners and customers is that we need to provide a fully integrated Payroll within Xero to win Australia,” says Mr Drury.

That would be great. I use Xero for both my business and personal accounting, but still use MYOB for our payroll. If Xero can integrate a quality payroll package into their system, I’ll be very very happy – both as a customer and a shareholder.

My favourite new feature I have discovered in Xero is that if I code an expense in Xero Personal as a business expense (ie paid for a work expense on my credit card), then it automatically creates a draft expense reimbursement claim for that expense in Xero Business. So no more manually entering in my expense claims. Yay.

Rod Drury has blogged:

We put out our first half operating update this morning.

Xero Operating Update to 30 September 2009

Xero has over 12,000 customers and now has customers in 50 countries. How cool is that!

Very cool. I say that as a user and shareholder. I also calculate $600/year income per customer and estimate income is now around $7 million a year.

Just 12 months ago we had 2200 customers. As you can imagine there has been a huge amount of work going on behind the scenes to ensure that we scale all aspects of the business to deal with this level of growth. With the additional capital raised in May we’ve been able to gas up on development as well as build out our sales team with senior people in NZ, the UK and Australia.

Wow that is great growth.

We’re delighted we’ve been able to lock in our growth rate after our seasonal high of March and feel that we’ve put the foundations in place for the next step up.

Selling software to the vast and fragmented small business market is really hard. There are few companies who have cracked it. The way people are using the web is evolving quickly and we’re all just starting to understand the impact of social media. Over the last half we’ve experimented with a number of marketing and sales approaches to find what works in our space and in each country. I’ve really enjoyed this stage of the business and I think we’re evolving sales models and processes that work. There is no doubt we are still learning.

Our entire team have worked really, really hard over the last half. There is a buzz inside Xero as all the hard work we’ve been doing is beginning to pay off. We just love the feedback and hearing how people enjoy using our software.

Thank you to our valuable customers and partners. We really appreciate your support and the great ideas and feedback. Our list of things to do has not got any smaller. And thank you again to our shareholders who have given us the opportunity to build a company that we all at Xero are proud of.

For those interested, there’s a thread from earlier this week on Xero’s new pricing plans, and some Q&A with staff.

I’ve been a shareholder in Xero from its initial float (and before they had any customers!) but only been using it in my own business for six months or so.

We were using MYOB and as I had paid for that software, I was a bit resistant to going to a monthly subscription but my business manager, Anna, actually convinced me of the benefits after she had used it elsewhere. So we went ahead and subscribed at $49/month.

I can’t describe how great it has been. The synchronization with online banking has saved hours of time, but most of all I can just login to Xero from anywhere in the world and see what bills have been paid or need authorisation, what invoices are going out to our clients etc, and most of all our profitability.

Xero have announced to the share market yesterday, and are advertising the changes – a new pricing model. Currently it is $49 a month for everyone, but now there are three options:

1. $29/mth – ideal for contractors and freelancers with a small number of transactions
2. $49/mth suited to most business
3. $64/mth for businesses that need multi- currency conversion

Xero is keen on feedback from readers, especially those who are freelancers, contractors or in a small business, about how you currently do your accounts (do you just use spreadsheets), what features you most want, is the new price level attractive and is the transaction limit okay?

Details of the packages have been blogged by Rod Drury.

Xero’s product manager (Andrew Butel) and communications manager (Helen Matterson) will be part of the conversation, and I expect Rod D will pop his head in also!

I am a Xero shareholder. I invested in them early on because I thought there was a small chance they could go big. It was a risky investment as they had around 40 staff and only 100 customers in their early days. I was quite prepared to lose my investment, so kept it at a level where I could.

Since then they have kept to their targets, and I have been thinking “Hey, I may even get my money back one day”.

Then a couple of montsh ago I decided (upon urging from my staff) to transfer my business accounts from MYOB to Xero. I was a bit resistant as MYOB is a one off software cost and Xero is a monthly cost and when you own a business you don’t like extra costs.

But then I started using Xero, and my God it was a dream. The setup is easy, but the integration with the banks is seamless. Xero receives the bank statements directly so you just have to go through and code them. But even better it remembers your previous coding, so you can get to a month end and most of it is already coded.

And the invoicing is great. I am away from the office a lot. My staff can prepare an invoice, I log in from anywhere in the world, approve it, and then they can turn it into a pdf and e-mail it with a click.

It is so good to use, that my business manager said she actually is looking forward to doing the first monthly set of financial reports on the new system.

So am now a very happy customer as well as shareholder.

And very nicely, Xero has just done a deal with British Telecom who will resell their service. This put the share price up to $1.70 (initial price $1). And looking through my e-mails I see I have an option to buy more shares at a rate of 90c as a foudnation shareholder. Yay.

I can’t wait for Xero to hit the US market.

Meanwhile I love being able to log into Xero every few days and see my latest accounts – don’t even have to wait for month end anymore.

Over at Public Address, there are guest posts and discussions on surviving the recession as a small business.

The first post is by Scoop’s Alastair Thompson and a second one by Xero’s Rod Drury. Xero are sponsoring the discussion about business survival strategies, and advertising its existence on this blog, and others.

We also had a discussion at Foo Camp (I’ll explain later what that is) about business surivival strategies, and it is fascinating how many good and practical ideas there might be out there. So if you have ideas, or are interested in the area, go on over to Public Address and join the conversation.