Mutiple ledgers multiply costs

When it comes to Xero, there’s a lot of talk about the ‘single ledger’. But what about multiple single ledgers?

calculator (Medium)Earlier this year we made the decision to pull back on promoting Xero to our clients while we focussed on bedding our internal systems down. This means to some extent that we haven’t yet promoted the great benefits of Xero as well as we could have. Marketing Xero as a client solution, as opposed to using it internally, has taken something of a back seat.

But we’ve still been talking about, and implementing, Xero whenever we can. So far the response has been almost all positive, even from those who are either not yet ready or happy with their existing software.

With one exception…

As a practice, we do a lot of larger business enterprises that have a number of entities as a part of their group. If they move to Xero, they need to pay a monthly ledger subscription for each of those entities, and those costs quickly escalate.

Employee of the month for ten straight years.

Employee of the month for ten straight years.

If clients are using QuickBooks or MYOB, they pay (at the most) a few hundred dollars a year in upgrade costs to stay with the latest version. For those who don’t use payroll, the upgrades may be needed even less often. The coveted annual tax scales are the prod that compels the goose to continue laying golden eggs for QuickBooks and MYOB. Without them, annual upgrades for these products are often more bloat than benefit.

In return for a single subscription fee, clients get to create as many different accounting entities as they like. This works well for those who have large groups where many of the entities involved actually conduct business. There is no additional cost involved in creating ledgers for extra entities.

To illustrate the difference with Xero, we have a client who has one large trading entity with employees, and a number of other entities that also invoice. We assessed their needs to be:

  • 1 x large entity ledger @ $64 per month (because of the many employees)
  • 3 x medium entities @ $49 per month (all three of which invoice)
  • Total monthly cost = $211
  • Total annual cost = $2,532

We’ve had even larger examples, but this one is probably the simplest because the  needs here are so absolute. We couldn’t, for example, consider downgrading any of the medium ledgers because every entity had to issue invoices.

This client was already using MYOB for their software and paying their annual subscription, so what we were asking them to commit to with Xero was an increase in annual costs of around $2,000 a year over a competitor product. And we couldn’t even offer them inventory management without the additional cost of an add-on! That makes Xero a pretty tough sell.

We love Xero. We think it has the potential to deliver significant savings to SMEs. But from a client’s perspective, Xero’s competition is really QuickBooks and MYOB. Clients see Xero as SME accounting software, and in terms of feature-set, they’re right. Its main competitive advantages are in providing a single ledger for clients and accountants, and in being accessible anywhere. These are great benefits, and it’s certainly easier to use too, but beyond these distinctions the functionality is similar, and in some cases more limited than the competition (again, inventory, for example). Yet when multiple entities are required, the dollars involved quickly move Xero up to the next level, competing with more expensive modular management accounting suites.

We’ve raised this issue with Xero before, but it’s not something that is high on their list of priorities. To some extent, I get it. If they’re giving away software to accountants, then on the client side they need to make every ledger count. But couldn’t there be a group discount of some kind? In our example above, Xero might lose a thousand dollars or more per annum in making such an offering, but at the moment they’re losing the entire subscription.

Xero may be easier to use. It may deliver efficiency gains. It may be ‘beautiful’. But in the end, for savvy people in business it’s a simple cost-benefit consideration. Sure, Xero is more efficient, but in this case that efficiency comes at a price. If you have to pay a significant premium to move all of your entities over to it, you’re going to have to weigh up those benefits against a very real and substantial cost.

It’s a bit like buying a diesel car. You can’t just say that a diesel is more fuel efficient and therefore better value, because the up-front cost of a diesel is usually much higher than its equivalent petrol counterpart. You have to quantify any potential future savings at the same time as you’re evaluating the cost, and work out how long it will take you to recoup the initial outlay. It may be the case that in many situations you’re better off sticking with petrol.

It does appear a little steep from here but you're just looking at it wrong.

It does appear a little steep from here but you’re just looking at it wrong.

With Xero, whatever the outcome of that analysis, the up-front costs when multiple entities are involved create a much steeper gradient for larger clients to make the switch. In particular, the comparison is often between real dollars in subscriptions and the mere opportunity cost of a person’s time, who is likely getting paid regardless. Like I said, it can be a tough sell.

So maybe we, as Xero resellers, could absorb some or all of the cost of some client ledgers by bundling up Xero as a part of an overall accounting solution? There’s a problem with this strategy too. Xero dangle a big carrot to entice accountants to switch over their practices to the Xero model – the promise of ‘free’ software. But this future hope is predicated on one significant assumption – that what you make on supplying Xero to clients pays for everything else. If we’re absorbing some of the cost ourselves each time, then the free software objective becomes a whole lot more difficult to achieve.

The solution?

Our suggestion would be that Xero adds another tier above ‘Large’ – let’s call it ‘Enterprise’ for now – that offers a certain number of entities included under the one registration, at a discount to buying each ledger separately.

Ultimately this isn’t about whether Xero delivers value. It’s possible that in the final analysis a large client is still going to be better off. But five or ten times the annual cost for an SME accounting solution represents a pretty big up-front barrier to adoption, even if it is only perception. Perception often is, after all, reality, especially in terms of the impact that it has on buying decisions.

But we want our free software now!

But we want our free software now!

From a firm point of view, we’ve already seen some huge gains with WorkflowMax, and to think that a capable practice management solution can be had at no cost in return for such a small commitment is incredible. There’s still significant value here for an accounting practice. So we’re not complaining about the value for ourselves.

But we’re also trying to document our journey as honestly as possible for those who might be thinking of doing what we are. The value equation for clients with larger groups becomes a lot more difficult to quantify when multiple ledgers are required, and if these clients can’t be won over, this will have an impact on the feasibility of going all-Xero in a practice. Whatever you may hear, Xero isn’t free, and for practices that do a lot of large groups with multiple entities – particularly where those groups are already using QuickBooks or MYOB – the promise of free practice software could well remain a pipe dream.

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Document mis-Management

We’ve reached a point in our journey to the cloud where some of our other systems are going under the microscope. Document management is one of them. If only we could find what we’re looking for.

DocumentsA few months ago we were effectively given an ultimatum by our tax software provider: upgrade to our new offering or move on.

This year (2013) will be the last year that a tax product will be developed for our platform. After that, we have to upgrade to a new and improved version of our software to continue preparing and lodging tax returns. Ostensibly, this ‘upgrade’ is supplied as a part of our ongoing maintenance costs. But it requires more than just the installation and implementation of a new system. We need new servers and if we want our environment to be supported, quite possibly news desktops as well.

It’s not a prospect that fills us with enthusiasm. But perhaps the most grating aspect of this news is the way it’s being delivered to the many accounting practices affected around Australia – “if you want to continue lodging tax returns, you’re going to be up for tens of thousands of dollars. No biggie, just let us know when you’re ready to proceed.” Uh yeah, we’ll get back to you.

It highlights more clearly than ever what is perhaps the most compelling argument for moving to the cloud. In the end, I don’t care where our data is stored, so long as it’s secure and readily accessible. It’s about breaking away from this perpetual hardware upgrade cycle. In the model we’re working towards, if you have a web browser, you’re good to go.

DANGER: Exorbitant compulsory upgrade costs ahead!

DANGER: Exorbitant compulsory upgrade costs ahead!

This imminent support cliff has also prompted us to think more about our document management solution. DM and Tax are supplied by the same developer and are, in some ways, intricately connected. They are really the last two major applications tying us to our old servers (if we exclude Exchange, which we already know we can move to the cloud anytime). If we have to find a replacement for Tax, why not just fast-track this thing and rid ourselves of server dependence once and for all? We planned to ride these old workhorses for as long as we can and then put them out to pasture. If “as long as we can” turns out to be a year or two earlier than we thought, all the better!

With document management though, It’s not proving to be as easy as we thought. Admittedly, our experience so far is shaped by a fairly limited range of applications – General Ledger (Xero) and Practice Management (WorkflowMax). In both cases, while there has been some adjustment, we were able to see early on that we could adapt these products to fit our needs. Document management seems to be a different story though.

One of the more significant barriers to documents in the cloud is bandwidth. I don’t want to get all political on you, but to anyone who thinks that the NBN is nothing more than a popularity project, hear my tale! We work in the Greenhill Road precinct of Adelaide – essentially the secondary business district of our city. If not for the apartments outside of my window, I could see the CBD. I could walk there in 20 minutes. And yet we can’t get decent broadband. On a good day, the best download speed we can hope for is around 11 mbps using a microwave type solution, but the guaranteed minimum for our service is only 4 mbps. The copper is so old in our neighbourhood that ADSL is even worse – around 3 mbps – which is why we don’t use it.

We still considering other options for achieving faster transfer speeds in our district

We’re still considering other options for achieving faster transfer speeds in our district

None of that is great when you have, say, a large set of scanned working papers you want to open. But when it comes to document management, upload speeds become a lot more relevant too. Without going to some kind of expensive bonded ADSL solution (which even then, with bad copper, isn’t great), ADSL upload speeds are much lower than the potential download speeds even in the best of cases. With our WiMax connection, the maximum upload speed is 1mbps.

So the reality for us is that as long as we’re shackled to such antiquated infrastructure, off-site storage simply isn’t an option. It might work for backup (if we could send an initial image off-site first – to upload our entire server at those speeds would take months!) but when you need a document fast, those speeds just aren’t going to cut it for immediate storage and retrieval.

Even if they did though, there’s more to the problem than that. What we’re finding is that many of the alternative applications on offer simply don’t seem to be true document management solutions. Sure, WorkflowMax integrates with Dropbox and Box. These are potentially great storage and collaboration options, but at the end of the day, they are nothing more than that – glorified folder structures. It’s the same as having a shared server drive, only it’s in the cloud.

True document management is more than that though. Ideally, you want your document management system to replicate (in some respects) a paper system. So let’s say I want to pull out the 2012 tax file for a client. I should be able to search in a way that allows me to restrict my search to certain criteria. This is done using metadata – additional information used to profile a document. In a true document management system, whenever I save a document, I do more than simply save it to a location – I profile it. I give it a year, a client code, and some other tags – like what general area of operations it relates to (for us, ‘compliance’, ‘consulting’, ‘admin’, etc.) and then within those groups, a more specific descriptor (for the ‘consulting’ group say, ‘CGT advice’, ‘estate planning’, ‘succession’, etc.). I also profile what type of document it is – a letter, a form, a file note and so on. This is all information I can then later use to replicate that process of ‘getting a file out’, from which I can then search for the specific document I’m looking for. Full text searching is useful sometimes, but on other occasions you want to refine your sample to reduce the number of documents you need to look through..

As far as I’m aware, Dropbox and Box don’t do this (I’d be happy to be proven wrong though). They are document storage solutions, not document management applications. And what’s more they don’t provide the extended capabilities of a document management system. They don’t allow you to set up standard templates that can be populated from your database for mail merges and standard letters. They don’t proactively prompt you to profile documents (email is perhaps the best example – how do you make people store their client emails in Dropbox?)

I may be wrong, but it seems like there’s a big hole here (in Australia at least) – and an opportunity. To me the solution seems relatively simple in theory (the actual implementation may be more complicated, I concede):

  1. Store your documents locally on a shared NAS drive for quick and easy access.
  2. Sync that drive to an off-site storage location for backup purposes (perhaps even use Dropbox or similar for this, though there are potentially jurisdictional issues if the documents are going to be stored outside of Australia).
  3. Use a web-based document management application to profile, index and search your local drive, as well as providing other functionality.

Is it as simple as that, or am I missing something? Essentially what I’m getting at is using a cloud-based application to profile, index and search, but with local storage.

It’s really not going to take all that much to impress us

The only other criterion I’d add is that that it needs to be cost-effective too. I’m not expecting miracles or anything – I know there will be some hardware and setup costs for the storage component. But after that, all I’m looking for really is an online tool to help manage documents. I should add here too that I’m setting the bar on cost-effectiveness pretty low. We’re used to paying $8,000 – $10,000 a year in ‘maintenance’ for a product that hasn’t been maintained of developed in almost five years. If there’s something out there that can do better than that, it’s already ahead!

I guess in the end what this amounts to is a plea for help. I may be a little off in the specifics of how something like this could work. And maybe there’s an alternative logic to it all – a methodology and solution that I haven’t even considered. I’m open to anything, but the question I’m asking is simply (can I still use the word ‘simply’ at this point?): how do we get document management to work in this new 21st century cloud paradigm…in Australia?

Help! I need somebody! (Not just anybody…)

One of the biggest concerns we had when we started looking into what it would take to switch systems was tech support. We were used to having phone support on demand, whereas Xero and WorkflowMax only provided email support. Was it going to cut it?

Tech supportWhen it came to working out whether email-only tech support would be enough for us, there really was no way we could ever have been absolutely sure. We tried to do our due diligence as best we could. We made some investigations. We spoke to people who were already using Xero and WFM. In the end, we found out as much as we could. Beyond that, the only thing left was to experience it for ourselves. We took the plunge.

We’re in a great position now to compare our new tech support with our old, since we haven’t dispensed with our old accounting software entirely yet. We’ve kept it around while we wait for a suitable tax and document management solution.

Firstly let me say that email-only tech support isn’t as bad as it sounds.

It all comes down to the nature of the product. When you’re experiencing some kind of paranormal activity in your desktop application, there are a number of different possibilities. Perhaps it’s a programming glitch, sure. But maybe it’s your system. Maybe it’s something unique to the data file you’re working on. Maybe you just need to turn your computer off and on again. All of this makes you anxious and uncertain, and you want to talk to someone. But when you’re working in the cloud, you have (almost) complete confidence that any problem you find is unlikely to be at your end. Everyone is using the same application and the same data files. So immediately your mind starts shifting to how you will work around it or what help resources there are available. That’s somehow more reassuring. No one needs to remote access your desktop. There’s no uninstalling and reinstalling.

Help file for our old software.

Help file for our old software.

Good online help resources play a big part too. We’re used to the existence of a Help menu, but ours was structured more like a game walkthrough from the late 90’s. The term ‘help’ in this context is somewhat deceptive. It’s  something really to be consulted only by the truly desperate.

But good help resources are not enough on their own. You still want to know that when you do have issues, someone is there for you and that when you need to call on them, you’re going to get a prompt response.

It’s great to be able to report that for any given technical support incident we’ve experienced with Xero and WorkflowMax so far the time from reporting the issue to resolving it (or getting an answer as to why it can’t be resolved) is at least about the same as it was previously. And it’s often better.

How can that be?

The problem with phone support (or ours at least) is that it’s inherently inefficient. It takes a while to actually get to someone who can help you. Maybe you start out on hold for 20 minutes. When you finally get through, the initial response usually is something along the lines of ‘it can’t be replicated at our end’. You’re usually instructed to do the same basic routines again – uninstall and reinstall the product, reindex the database, reapply the most recent patches and so on. Incidentally, if ‘reindexing the database’ is always an early possible solution, doesn’t that say something about the stability of the product in the first place? How can I ever rely on the integrity of the data at any point in time without first reindexing? Ideally do I need to reindex every day then? Every hour? Shouldn’t this be a last resort rather than a first response? But I digress…

At this point you may or may not be escalated to a supervisor. When you finally get through, you’re often taken through the same things again, before you’re allowed to get into the good stuff. Maybe at some point after this you are able to resolve the problem. But it’s quite often the case that after all of that you end up only confirming what you kinda suspected from the beginning anyway – there’s a bug in the product. So you start thinking about workarounds.

So phone support doesn’t necessarily mean you get your problem resolved any faster, and the end result often ends up the same anyway.

The thing about Xero though is that there really aren’t a whole lot of bugs in it anyway. There are occasional functionality issues – things we wish it could do better – and they have tripped us up as we learn how to make it work for us, but when it’s essentially the same setup running on every desktop around the country, bugs don’t tend to stick around for long.

Contrast that to our old software. We’ve been finding more and more bugs in it lately, particularly in our tax product, and when we call for support it increasingly seems like the person on the other end is just flipping through knowledge base articles as we speak rather than knowing the product intimately. What’s more, the release of tax this year was late, after the end of the financial year, and even then the superannuation functionality was completely removed while they continued to work on it.

"Yeah, the ride is a little bumpy, but it's fine - it's by design!"

Yeah, the ride is a little bumpy, but it’s by design.

We had an incident recently that took a number of weeks to get ‘resolved’, and at one point while we were waiting to be called back with an answer, we received a message telling us that the case had been closed because they hadn’t heard anything from us! Once we were able to get the case re-opened, they were finally able replicate the issue, but we were advised that this was by design. It was pointed out that an incorrect tax calculation would never be ‘by design’, so once we were able to agree on that the ‘resolution’ was that it was a bug and that we would need to wait for an enhancement at some point in the indefinite future. You’ll notice I used a lot of quotes there when referring to the solution, because ultimately there wasn’t one.

Now all of that is fine when you’re talking free support for some app that came with your printer. You get what you pay for, right?

But the last quarterly maintenance invoice for our tax and document management product was over $3,000! That’s quarterly in case you missed it, and that’s after we significantly cut our licensing back now that we use it a lot less.

So yes, Xero and WFM only have email support. And yes, so far they don’t have a tax product, which would dramatically complicate things. To date, most support emails we’ve sent have been responded to within the hour. But maybe that will change as these products become more popular and especially when there’s a tax product that needs to be wrestled with. Who knows?

I want to emphasise that before I continue because I don’t want to seem all preachy about it. Sure, we need good, reliable tax software to do what we do. But tax is complicated, and the Tax Office doesn’t make it any easier either. Each year, changes are abundant and deadlines tight. Sometimes this results in bugs. I get that.

Clown Customer Service

I can assure you we’re taking your problem very seriously.

But the thing is, we’re paying a pretty huge premium for our old software. And for that we get long hold times, no product development (our document management product is essentially exactly the same as it was five years ago when we rolled it out) and quite often no solutions. And on top of that, we have to support an internal server environment that costs us tens of thousands more every few years. If you’re paying that kind of money, you want to know that people are moving mountains to get your problems fixed. Or at least making you feel like they are.

To be fair, we should compare apples with apples. WFM and Xero are not free. We just made Silver status with Xero, which means WFM is now free. But up until this point it has cost us $199 a month. Even at that price it’s pretty cheap for a practice management solution, but free is even better. Silver status also entitles us to a range of other add-ons at no cost, including (as I understand it) the future tax solution. Plus, because we’re using Xero as our internal general ledger product, we need to pay for Xero ledgers even where clients don’t use them – the so-called ‘$5 ledgers’. So there is a cost, and at the moment it’s in the thousands of dollars a year.

But it’s still a lot less than what we were paying, and for that we get regular updates and prompt response times. There are also user-friendly and abundant help resources available. Plus Xero have a development team that listens to and implements enhancement requests.

But more than all of that, being in the cloud means there are less environmental factors that influence reliability and so therefore, simply, less support calls.

So – great support for a lower maintenance cost and no server demands whatsoever? Or $3,000+ a quarter plus server costs for the kind of support that at times resembles what you get with an obscurely-named mp4 player from eBay? You can probably judge for yourself whether or not we’re worried now.

A cure for the WorkflowMax job list blues

So you’ve got those ol’ WorkflowMax job list blues? It’s time to turn that frown upside-down. Here’s a cure for what ails you.

Too much work

Out of the box, WorkflowMax forces you to create way too many jobs. A job isn’t merely a work code, like a description of the activity you undertook. It’s a project that has a start date and an end date. It has team members allocated to it and can be used to manage the workflow of individuals, teams and the practice as a whole. Turns out, accountants in public practice work on a lot of jobs!

What that translates to is clutter. It makes your job list unmanageable, because everything that you’ve ever worked on becomes a job for you. Most accountants we know want a job list just to manage the major tasks they are currently working on. They don’t want, for example, to start a job simply because they made a phone call that went a little long.

Breakdancing

Like most accountants, we enjoy breakdancing and recording all of our time.

For those of us that still kick it old-school, it’s not that you want to bill every unit of time you allocate to a job. But you at least want to record it for job costing purposes, not to mention for identifying capacity, monitoring productivity and so on. Maybe it’s just a case that old habits die hard. Perhaps we will completely revolutionise the way we record time and bill our clients sometime in the future. Even so, let’s do one thing at a time. Let’s get the software bedded down first and replicate what we’re currently doing. Then we’ll talk.

So for us, WorkflowMax was reduced to a time recording tool and nothing more. Jobs lists became too long and unwieldy. Even though it had promised so much, we weren’t using it to manage workflow at all. It was WorkflowMin.

We needed a solution. So the FGS team went into their laboratory to concoct a formula for making our work lists more manageable. This is what they came up with.

It isn’t a perfect solution still because ultimately we’re limited by the functionality of the application. We’re waiting for the day when some of the changes we’ve requested are implemented, so that WFM is a better fit for more traditional practices. We made a shortlist late last year of the major improvements we’d like to see. But for now, this works for us.

We’ve introduced two new jobs states which can be included in any job.

New job statesThe first is Time Accumulation. This job state usually appears near the very beginning, though it may not always be used that way. The point of it is to have a separate phase in the flow of work which is not attributable to a specific task.

The second job state we introduced is For Invoicing. This is usually the last job state before a job is set to completed. It reflects precisely what it says – that often a job may be finished but not invoiced until later in the month or beyond.

On the face of it these jobs states may seem neither here nor there. It’s what comes next that makes the difference. Because of the way WFM can notify staff about changes to a job, we have these two new job states set to notify our accounts manager when a job is changed to one of these states. She then goes into those jobs and makes herself the manager of them while at the same time removing the names of anyone else who might have worked on the job and is associated with it (more relevant for jobs that have been in the system for a while and are ready for invoicing than new jobs that have started with the Time Accumulation state).

Sometimes you have to jury-rig things to get the result you're looking for.

Sometimes you have to jury-rig things to get the result you’re looking for.

This may seem awkward and clunky (and to some extent it is) but it’s a serviceable workaround that achieves what we want. Our accounts manager does very little chargeable work and so doesn’t use her job list. And this is an admin task so it helps to move an administration intensive activity away from our chargeable people. From their perspective, it all happens automatically, making their lives easier. Any job where one of these states is used is removed from our accountants’ job lists, which become far more reflective of the actual state of their current workload, i.e. jobs they are actively working on.

What’s more, the For Invoicing job state, with its accompanying notification, proactively tells our accounts manager that an invoice is ready to be raised, instead of her having to chase it up or wait for someone to let her know. She can log in each day and immediately see a list of bills she can raise.

This is a great example of how (with a little lateral thinking at times) WFM can be made to work for traditional accounting practices like ours, and even help to improve them. The question is, could we have ever worked this out for ourselves? I’m glad we didn’t have to find out.

Windows 8 – give it a chance to make you love it

I love technology. I especially love it when I find something that not only solves a problem but also helps me do things I hadn’t even thought of. With that in mind, I present part one of my very first product review – Windows 8 on a Dell Latitude 10 tablet.

Windows 8 Start Screen Angled

I’ve never really been attracted to the idea of a tablet.

I use a laptop for business purposes, and I have an Android smartphone for quick browsing, email, etc. I could never really justify the case for a tablet to sit in between those two devices, since it felt to me like I didn’t really gain much extra functionality.

But I have to confess that one of the things that attracted me about the ‘practice of the future’ was the promise that you could do it all on your tablet. I just needed to find something to change my mind about actually owning one. And recently I did. It’s a 10.1″ Dell Latitude 10 with Windows 8 Pro. It’s less about the particular brand of hardware though, and more about the operating system

No, it’s not a Surface. But it uses the same operating system as the Surface Pro.”

So begins every conversation I have with anyone who asks about the hardware I’m rockin’. From there I have to launch into a convoluted discussion about the various options you have when choosing a Windows 8 device. So I suppose I might as well get it out the way now.

The original Microsoft Surface RT (released late last year) uses an ARM processor – the kind you find in many smartphones and tablets today. A bit of rewriting of Windows was required to get it to work with these processors and as a consequence, you can’t use any old Windows applications (like, say, Office pre-2013). It looks like Windows, but it’s more a mobile operating system like iOS (on Apple devices) or Android. The advantage though is that it gets tablet-like battery life and doesn’t heat up too much.

Proposed new icon for the Windows 8 App Store

Proposed new icon for the Windows 8 App Store

To be honest though, to me there just isn’t a compelling reason to choose this Windows ‘lite’ over the established players if all you want is a tablet to consume web content. Especially when you can only install apps from the Windows 8 app store and that is still a bit of a ghost town. Windows RT confuses the market and requires drawn out explanations like this one to put it into its rightful place.

If I’m going to buy a Windows tablet, it’s because I want to do something more.

This year Microsoft have released the Surface Pro. This is a full blown Windows machine, using an Intel Core i5 processor like you’d find in a regular laptop. Great news for those wanting full Windows like me.

The non-RT version of Windows 8 (i.e. regular Windows) now gives you the best of both worlds – two interfaces. There’s the new ‘Modern’ interface which uses touch scrolling and live tiles, and allows you to consume content via web-connected apps. Microsoft have intentionally set out to do something completely new here. It’s not an iOS rip-off. It’s altogether different, and that can be infuriating. It really takes some getting used to. But once you do, it’s not only effective, it has a couple of killer features that make iOS and Android tablets seem like over-sized smartphones. So if you stick to the Modern interface, any Windows 8 apps you install will work without you ever having to see the ‘old’ Windows. I’m not convinced yet that Microsoft are right to force this interface onto desktop users, but in a tablet it works well.

For older Windows applications, it drops you back to the familiar Windows desktop. To the Apple zealots, this might be a point worthy of derision. Windows desktop on a tablet?! And to be honest, the experience on a touch-only device isn’t always what one might call smooth. So perhaps it deserves some mockery – until you want to use a full blown desktop application for something. Then it’s irreplaceable.

But there’s a problem with the Surface Pro. Because it uses laptop hardware, it gets laptop battery life  – abysmal relative to a tablet. And the heat is such that it still uses fans to cool itself! I’m not sure about you, but I can’t imagine using a tablet and putting up with fan noise as hot air blows all over my knees!

This is why the Surface Pro is more of a laptop replacement. I like the idea, but I would wait for Surface Pro 2.0 or 3.0.

What to do?

Well, as it happens there is a third category of Windows tablet. I’m surprised that Microsoft haven’t made more of a big deal of this category. Remember the old Atom processors that were popular for a while when Netbook computers had their 5 minutes in the sun? They were mostly terrible of course. The processors that powered them are still around though, and they’re now much better – power-efficient, low heat and dual core. And best of all, they use the old x86 architecture which means you can run full Windows 8!

The Dell Latitude 10 - hot air ballooning optional

My new pride and joy – they’re so cute at this age!

That’s where my Dell fits in. Other devices to use this processor include the Samsung Ativ and the HP Envy x2. For me at least, this is where it’s at for Windows 8 tablets. Little to no heat, great battery life and full Windows 8 Pro. It’s like a tablet, only I can do laptopy things with it. I can put it onto a Windows domain. I can print from it. Because it has a full-sized USB port (hallelujah!) I can plug an ethernet cable (using an ethernet to USB connector) or a USB stick into it. And I can run any legacy Windows applications I like, without the need for a permanent internet connection.

The other day, for example, I needed to make a change to a PowerPoint animation on the road. No need for a VPN or a feature-barren app that’s not up to the task. I just dropped back to the desktop and opened PowerPoint. No catches. I can even sync an iPhone to it!

I’m not going into a comprehensive review of the device and the OS in this instalment. Microsoft’s unnecessarily complicated product strategy means that I need an entire introductory post just to explain what it is I’m reviewing! But let me try to summarise.

I’m a person who’s reasonably OS agnostic. In our house we have both Windows and Apple computers, as well as iOS and Android smartphones. So I hope it counts for something when I say that for me at least, a Windows 8 tablet is the best tablet for business use.

The Modern interface is a complete break from the iOS/Android way of doing things. Yes there’s a learning curve, the app store is pretty barren for now and when you do have to drop back to the desktop, it’s a little clunky. Each element on its own is not best in class. But put together, a Windows 8 tablet is the best compromise of all worlds.

Thankfully, days like this are now behind me

Thankfully, days like this are now behind me

I ride my bike to work as many days as I can. When I first bought my tablet, I assumed I’d leave it at the office and use it for meetings and so on, and continue to take my laptop home each night. Of course, this is pretty heavy in my backpack, but what can you do? Turns out what I can do is leave it here and take my tablet home instead. In fact, I’ve taken my laptop home maybe twice in the last 2 months. I can do everything I need to on on my tablet now – including playing a few retro games from the early 2000’s (Half Life 2 runs great on low detail).

Coupled with the great productivity features in the new Modern Interface, Windows 8 as a business tablet makes an iPad seem like a consumer toy.

And of course, when it comes to using Xero and WorkflowMax, it really doesn’t matter what you use.

Time for a sitrep…

You may have noticed we’ve been a little quiet lately. More likely you don’t really pay us that much attention. Either way, it’s probably time for a situation report. What’s been happening over the last few months?

war corrrespondent

After the initial invasion of Normandy during World War II, the Allies were forced to pause and regroup. They’d moved forward at such a rapid pace that they had stretched their supply lines too thin. They needed a break. Without that pause, they risked undoing all of the good results they had so far achieved. Troops were tired, limited resources were needed in too many places at once, and morale was depleted as the initial enthusiasm of early victory waned.

We’re no war heroes, and this is not exactly the liberation of a continent! But in the last couple of months or so we’ve had the opportunity to take stock of everything we’ve done so far, and we’ve come to the realisation that we also may have moved a little too fast.

2012 was quite a year for us. This time 12 months ago we were (un)happily plodding along with the same software we’d been using for more than a decade. Now here we are using a cloud based SME product for practice management and general ledgers. And blogging about it!

We had big, bold plans to change everything. And as soon as possible! The truth is it hasn’t been without its difficulties which, when you really think about it, is to be expected. Sure, Xero and WorkflowMax are essentially products for small to medium businesses. We should be able to get our heads around them pretty quickly, and in that we feel pretty comfortable with using these products with and for our clients. But at the same time, internally we’re discarding a pretty complex practice management system and some long established processes and practices, and as we’ve progressed, we’ve learned a lot more about the magnitude of the task.

Even the office gossip mascot needed some respite.

Even the office gossip mascot needed some respite.

So where did we get to? By the end of 2012, troops were tired, limited resources were needed in too many places at once, and morale was depleted as the initial enthusiasm of early victory waned. We needed a break.

For us this means putting aside some of our wider aspirations to radically transform the practice – just for a short time – to focus specifically on the day-to-day functions that make our practice tick. Instead of doing many things passably, we need to concentrate for a while on doing the important things well – tasks like recording the time that it takes to do our work, managing our workflow and invoicing and monitoring the performance of the practice. This is all taken care of by WorkflowMax.

We gathered the whole team together late last year and met with Tim from Focus Growth Strategies (FGS) to go over some of the problems we were having. What wasn’t working and why wasn’t it? We discussed the rollout and associated problems in three main areas:

  1. General usability;
  2. The invoicing process; and
  3. Practice management.

Here’s what we learned.

Tim Callcott from FGS .

Tim Callcott from FGS working on his manifesto while we vent.

General Usability – For our users, the main issue is (as it has always been) the size of each person’s job lists. This develops primarily because all time in WFM must be allocated to a job, and accountants in public practice tend to work on a lot of jobs! It’s not ideal, but it happens. What we learned was that our job lists had become so unwieldy that any purpose for WFM beyond the basic task of entering time was being largely ignored. We know that WFM is capable of so much more, and yet after six months all that our team is doing with it is recording time. It serves no workflow management purpose at this stage, mainly because people are too discouraged to bother using it this way.

Invoicing – From an invoicing perspective, we’ve found WFM to be pretty flexible. We’ve been getting our bills done, and for the most part we’ve been doing it more efficiently than with our previous system. The big problem we had though was in tracking which jobs were ready to be billed. Team members were setting jobs to ‘complete’ to get them off their lists, but then because these were ‘complete’, they weren’t showing as being ready to be billed. There are some minor reporting gripes too, especially in not being able to set date ranges for individual WIP reports (which was discussed in our ‘All we want for Christmas‘ post late last year). There was also some difficulty in getting accurate WIP reports because of fixed fee invoices that were being prepared in Xero. These were coming through to WFM to show as invoices, but weren’t reducing WIP balances, so balances in WIP soon became meaningless. We fixed this last issue by moving our fixed fee billing back into WFM.

Practice Management – Finally, from a practice perspective, we aren’t really using WFM as we’d dreamed we could have. As directors, we need information about how the practice is performing. Because our previous system had very little reporting capability in this regard, we had developed quite complicated monthly reporting systems using Excel to give us all the KPI data we needed for the practice. We dispensed with that when we brought in WFM, but we’ve never really worked out how to get that same information out of WFM.

Again, practice-wide the overall conclusion has been that we are using WFM to the bare minimum level.

This whole process has illustrated again for us the advantage of having a partner working with us who knows the terrain. After giving the team an ‘open mike’ session to air their grievances, we’re starting to develop workable solutions in conjunction with FGS. I’ll detail some of those solutions in later posts.

It’s also be great to have Xero listening. We know that Xero has big plans for WFM, and we’re looking forward to seeing many of our problems addressed as WFM becomes more and more tailored for the specific needs of accounting practices.

So it’s not perfect. But what system is? It’s been worthwhile going through this process and realising that with some tweaking, even in its current form, we can get WFM to work as a practice management solution.

Two things we know for sure. Firstly, this is costing us a lot less than a dedicated accounting practice suite, and not only is it no worse, in many respects it is much better. And secondly, in 100% of cases so far where we have discussed the Xero approach with our clients, they’ve been blown away. On the client-side, the hype is justified and the marketing material is not exaggerated. Clients do love it, and it does bring economies to the whole relationship that allow for better service delivery. That alone makes it worth the effort.

Can Xero really replace your accounting practice software?

Xero is great for bookkeepers. But does it work for accounting practices? We take some time out to think about that a little more, now that we’ve been using it for a while.

It’s one thing to make great software for small-medium enterprises, and Xero do just that. As an SME ourselves, we love the efficiencies Xero brings to our internal bookkeeping procedures.

It’s another thing altogether for an accounting firm to use Xero ledgers to replace a practice level general ledger system. We’re trying to do just that. Does it work?

Hopefully over the coming weeks and months we’ll approach this very question from a variety of angles. This time around though, I want to consider it from a data entry perspective.

In Xeroland, you can run your practice from the beach and every client is a tech-savvy twenty-something with perfectly reconciled books. We hope to visit there someday…

There is a Xero utopia where the client is getting most of their data in automatically using bank feeds, and collaborating with their accountant to make sure that the result is accurate and meaningful. The accountant then uses that same ledger to prepare statutory reports at the end of the financial year. If every client can do that, you’ve got it made. That’s the dream.

We have a number of clients where the ‘dream’ is already working brilliantly. There is a real sense in which Xero is fundamentally changing the landscape for accounting firms.

There is one thing we’d like to see though that would make Xero even better – because as we all know, there’s another kind of client. Their particular style will be many and varied, but there is one trait that consistently defines them. They don’t use software to keep their records. This can be a problem for Xero.

If your client doesn’t use software and you can’t get a CSV from the bank, there’s no easy way to get data into Xero. Even if the client could get CSVs, some banks don’t provide a year’s worth of transactions in CSV form anyway, and if you’re depending on the client to get them for you, may lose your window of opportunity. This may even be a problem where a client is committed to using Xero. Perhaps they are a new client and have only just made the switch, but you still need to prepare financials for the period prior to Xero. Or maybe they use Xero for their main trading entity but have a few side projects that you also need to prepare accounts for.

The bottom line is that we accountants sometimes still find ourselves in any number of situations where we have to do some old school manual data entry. We don’t like it, we would love to never have to do it again. And Xero is certainly a big part of our ticket out of there. But sometimes for a variety of reasons it still happens.

Xero is, at its core, an SME accounting product. That’s what makes it so easy to use, and we love that. But that also means that you input transactions individually, one at a time. You write a cheque, prepare an invoice, and so on. Xero makes this process easier by using feeds, and then pre-coding and reconciling much of your data for you. There is also a general journal area for advisers. But none of this is conducive to rapid-fire data entry.

We can’t seem to find a button to import this into Xero.

Our old software, for example, has an area called ‘Bank Statements’ where you enter transactions from statements, line by line. All the major applications have something along these lines. Unless there’s another way of doing it, we’d like to humbly request that Xero add something similar.

It’s important to note that this isn’t a request to change Xero’s MO. Fundamentally, the Xero formula is the future of data entry and we’re committed to it. Our request would be something along the lines of a back door for advisers only, for those times where there simply isn’t any other alternative. The client experience of Xero would not be any different, but Xero would have an area for accountants where effectively, you would create your own CSV by only entering basic data line by line

Our current workaround is based on this same idea. We create our own CSVs in Excel and enter transactions line by line. We then import the CSV into Xero. It’s ugly, but it ends up being a lot quicker than entering individual transactions using Xero’s functionality. Where you have a lot of transactions that don’t go through a bank account, such as items from a personal credit card, you can create a dummy bank account in Xero and import the CSV to it. Because it ends up balancing to zero, it doesn’t show on any of your reports. It would be so much better though if this functionality could be available in Xero.

We get that Xero is a management accounting tool for SMEs, and that means it’s geared towards helping businesses do their bookkeeping. But we’re accountants, using it as a practice level general ledger product. And as far as we can tell, we’re a core part of Xero’s strategy for market penetration. Can Xero really replace your accounting practice software? From a data entry perspective, the answer is still ‘yes’. But there will be times when you’re really not going to like it.

We’re relatively new to Xero so if anyone has any ideas they’d like to share, we’d love to hear from you. How do you get a year’s worth of transactions into a ledger quickly when you don’t have anything to import from?

The bookkeeper’s perspective

This time around we fire six questions at our internal bookkeeper.

Sometimes new things come into focus with a change of perspective, which is why from time to time we’re asking some of our team members to offer their reflection on the Xero journey. If you’re considering whether Xero can work for your accounting firm, you’re almost definitely going to want to find out how it copes with your practice accounting.

Just another day at the office for Lauren.

Lauren Degnan wears a lot of hats at Dewings. She’s the kind of person you can pretty much throw anything at – we often do – and you know that it will get done well. She manages all of those regular practice management things that need to be done in order for us to function, she remembers when things are due and frankly, she helps to make people like me look more capable than I really am. We don’t want to say she’s perfect – just that we’re yet to to find any kind of fault. In short, every firm should have a Lauren.

One of Lauren’s responsibilities is management of our internal bookkeeping. She makes sure that all the data is in so that our practice reporting and planning can get done. Lauren also prepares our budgets. So naturally the transition to Xero affects her directly – we now run our practice accounts through Xero and this means that Lauren has to get all the information in there.

Our first ‘Six Questions’ post looked at things from the product champion’s perspective. We directed those same six questions to Lauren, and here’s her response. Hopefully there’s some encouragement here for anyone considering the impact that Xero will have on their internal accounting processes.

  1. What do you love about Xero/WFM so far? Once all the setting up is done, everything is more automated which will make doing my jobs much quicker and will also allow me to keep on top of everything.
  2. Is there anything you hate? I don’t hate it, but the timesheets are a bit harder and more time consuming to use for someone who does lots of small tasks during the day.
  3. Can you see it making a difference to the way you work? It will make my job quicker and easier because all the facets of our accounts are now in the one package which means less reconciling between information from different software and sources. As mentioned before, I will also be able to keep on top of things more, rather than having a busy start to each month, my workload will now be more evenly spread over the month.
  4. If you could only make one enhancement request what would it be and why? I’m not sure that it’s really an enhancement, but speeding up the rate that the screen refreshes each time. When I’m working quickly through things, the pause that I get while the screen refreshes can be a bit annoying.
  5. Is there a moment on the journey so far that stands out for you? Probably the point when I had everything finally set up for the accounts and started using it on a day to day basis. My workload is so much more even now because instead of having to code hundreds of transactions at the start of each month, I now code the entries daily as they come in through the bank feeds. Has taken the pressure off the start of the month for me..
  6. Overall, if you had to choose, old system or new system? Once all the setting up is complete, new system.

Xero room to move

Have you ever felt like you knew someone, only to discover that maybe you’d been misreading the signals? When we started this blog, we conceived the name as a little play on words, and thought it would also give Xero some free publicity. It turns out Xero thought otherwise. We’ve now got a new URL, thanks to the Xero legal team!

One of the things about this blog that I hope will resonate with firms nervous about undertaking a journey to the cloud is how uncool we are. As a firm, we have our share of issues to tackle like any other normal accounting practice. We’re not part of the new wave glitterati. Social media is still something we’re relatively new to. We’ve never blogged before. And we’re not caught up in the Xero hype. If there’s any encouragement to be taken from that, I like to think it’s that if we can do it, anyone can!

Perhaps it was that wide-eyed naiveté that got us into trouble recently. When we first decided to move everything over to Xero, we were looking for some real testimonials from firms that had been through the same thing. It’s very difficult to find anything beyond the nauseating gushiness of the Xero fanboy and fangirl clique. So being all giddy on the prospect of our impending transformation, we came up with the idea of blogging about the journey – as it was happening. Not only would this provide a more realistic resource for firms that might consider doing the same as us, but as I’ve said before, there’s a certain catharsis in writing about your experiences – especially when things aren’t going as well as you’d like! Plus, we thought, “Xero are all about the new paradigm of vendor/customer interaction and collaboration! Surely they’re going to eat this stuff up!”

And at first they did. Not having much experience at this, we figured Twitter was the best way to get the word out, so after doing some research online and reading a couple of books, we started writing and then tweeting our posts. The Xero team were soon retweeting us and directing traffic to our blog. It was all rather intoxicating. Heady times!

Does my bum look big in this?

It’s been said a few times before in this blog, but just to be totally clear, let me repeat – we love Xero! But we also intend for this story to be as honest as possible. We don’t buy into the cult of Xero, so we’re going to call it when we think the emperor is wearing a little less than he should be! And I have to say, no one here was prepared for what came next.

After developing a little following of our own, I was contacted by Xero and advised that we were no longer permitted to use the URL ‘approachingxero.com’. It turns out that Xero’s Terms and Conditions for partners precludes the use of the ‘Xero’ name in a URL. The explanation given was that Xero protects its brand very aggressively and that using the Xero name in a URL makes it difficult for visitors to determine whether this is an official Xero communique or not. Let me say here that I accept that this is entirely our fault – had we read the T&Cs initially, we may have avoided this from the beginning.

I guess we interpreted our posts being retweeted by the Xero team, right up to the very top, as being an endorsement of what we were doing – retweeted URL included. Perhaps sites like http://www.xerousers.com/ or Twitter handles like @thexerohero led us to believe that there was some grace extended to partners using and affirming Xero.

We were wrong!

It was suggested that perhaps we change the URL (and the blog name) to ‘Approaching Cloud’. Really? Not exactly catchy! Did the Xero peeps really believe that Approaching Xero was a single entendre?

And anyway, changing the URL would break all of our links. So we decided that perhaps we should find out whether they were serious or not. After asking what the implications for leaving the blog as is would be though, we were advised in no uncertain terms that the path to resolution would be swift and litigious.

OK, we were bluffing. So how do you play this game again anyway?

Ouch Xero! We thought we were friends! In the words of Kenny Rogers though, you gotta know when to hold ’em, and know when to fold ’em. And being risk averse accountants, we’re not much for gambling. So from here on this blog will use the URL https://approachingx.com/.

We know that some will defend this action on the grounds that Xero is just trying to protect its brand. Do you mean the same way that possibly the most carefully managed and protective brand in the world allows sites like http://www.appleinsider.com/ and http://www.macrumors.com/ to continue? Or how about the way another marketing behemoth chose to take a collaborative approach and embrace a Facebook page that had already been set up in their name? Isn’t the 21st century ethos for client relationship management more about the spirit of the law than the letter of it?

We always thought Xero was in this same league and looking to disrupt the status quo. But like I said at the beginning, we’re new to all of this. So maybe it’s us who don’t really get the new paradigm?

Don’t worry though – we still love you Xero. You just need to lighten up a little. And we hope we can still be part of the family. Think of us as that awkward Uncle who always says what he thinks. Sure, he’s a bit of a crackpot. But sometimes he might be just the person you should listen to.

The future is now

People can talk about the future, and you can think you get it. But sometimes you need to experience it to truly appreciate it.

My timing may be a little off here, but I think it was sometime around the early 90’s. People in Hypercolor t-shirts were talking about an ‘information super-highway’. Preparations were being made. Infrastructure was being laid. The future was on our doorstep.

I remember very clearly thinking something back then that seems ridiculous now – what do they mean by ‘information’? What do I need ‘information’ for? I have the TV. If I need to know something more, I can always go to the library. What other kind of ‘information’ is there?

Today, it’s hard to imagine life without the internet. How did I work out which hotel to stay in? What did I do when song lyrics weren’t printed on the CD (or cassette!) sleeve? Did I really get most of my news from the Advertiser? And how did I find out what my friends were eating for dinner every night?

In the 50’s people of the future were expected to be immune from the effects of the sun.

Of course the problem (for me) back in the early 90’s was that I didn’t really have any context to put the concept into. I could only use what I knew at the time to inform my picture of the future. It’s kinda like those crazy future concept cars you see from the 50’s and 60’s. It’s laughable in some respects to see what they came up with back then, but in another sense you can kinda see what they were getting at. The best they could do was take what they knew then and try to project it into the future.

So since I already look a little slow off the mark, I might as well keep going. For me it was much the same with the ‘cloud’. I first heard the term a few years back, and again I really didn’t have much context to put it into The best way I could picture it was having all of your apps running through your browser, which to some extent wasn’t completely misguided. But it struck me as a way for software vendors to get more money out of you by charging a subscription fee rather than a one-off payment for a license. Perhaps there’s an element of that that’s true too.

But even once I understood what it was, I couldn’t really conceptualise how it would help me. What do I care in the end whether my software is hosted locally or on a remote server somewhere?

Today of course I could list all kinds of benefits. Reduced server costs, less dependence on backup routines, increased security – they are many and varied. But there’s nothing like experience to really drive it home, and at least one of the more significant advantages of the cloud hit hard for me recently.

A couple of weekends ago my car was broken into. Nothing too severe in terms of loss or damage – just a smashed window, a stolen wallet and a stressed wife. But it meant that on the Monday, I really needed to get that window replaced.

After sorting out the insurance I was ready to track down a replacement window, but it turned out there was only one available in Adelaide (from the approved suppliers anyway) and I had to take a bit of a drive to get there. So I threw my laptop in my bag and headed off, prepared to write-off the day to annual leave. After all, repairs of any kind to a car never go as planned. It turned out exactly as expected – what was meant to take an hour took around five.

After I dropped the car off I was stranded, so I went for a walk. Conveniently, some 50 metres or so down the road was one of Adelaide’s finest coffee shops (it’s The Coffee Barun, for my fellow coffee fanatics out there). I’d been meaning to check out their new premises for a while but it’s a little out of the way from where I live, so this was a good opportunity to visit and drown my sorrows in coffee. Turned out they had free Wi-Fi.

What started out as a day to be written off turned out to be one of my most productive in a long time! Away from the distractions and interruptions of the office, and with an endless supply of fine coffee, I was able to get so much done. In fact there was nothing I couldn’t do.

I checked our bank balance and debtors situation, and looked at how our billings were going for the month. I customised some reports. I sent and responded to a few emails and wrote a new blog article. Then I prepared our bi-monthly newsletter and sent off a draft for review. The fact that my car was taking five hours rather than the promised one was almost of no consequence. And I did it all with my headphones on listening to my playlist on random.

This may not be my only office of the future. But it’s at least part of the future. And most significantly of all, it wasn’t until a couple of days ago that it really hit me just how radical that day was. Ten years ago I could really only ever have dreamed of turning such a disaster of a day into something so productive. Ten years ago of course, my desktop computer was less powerful than my phone is today. You can’t really conceptualise the future until you’re in it. More than ever before, I’m finally starting to get it.

One of the best things about the cloud is that the office is never too far away. Oh wait…

Want to know what the best part of all is? I’m on holidays right now writing this post from Bali! Don’t worry – I get the whole work/life balance thing. The kids are by the pool with Mum and I’ve just ducked away for a few minutes. I’ve checked a couple of things and looked at a some reports. As a director of your own business, you can stretch the cord very thin, but you can never totally break it, if only because you worry about how things are going while you’re away. And that’s ok. After all, I’m hoping to do this a lot more as I get older so a healthy – and accessible – practice is a vital part of the plan.

So this is what they meant by the cloud! I’m a convert! Now if you’ll excuse me, it’s beer o’clock (somewhere in the world) and there’s a pool chair calling my name.

STOP PRESS: We’re changing the URL of the blog thanks to the legal boffins at Xero. It will be happening as soon as I’m back from holidays. Stay tuned for more information.