AndrewR

Another point that is missed in the Xero/MYOB/etc analysis..... for the practicing accountant, the functionality to process through to final accounts within the client Xero ledger is a significant time saving benefit over a Myob client ledger. Myob has the legacy client base and is a cheaper option for large payrolls, but factor in the accountants processing time to the client's overall accounting cost and Myob is dead. Unless there's some major product improvements to catch up to Xero, more and more accountants will recommend Xero over MYOB simply because Xero clients are more profitable because the job can be done faster...clients will only pay so much for compliance tasks.

Daniel Carter

Thanks for the analysis Nick and I agree the upside potential outweighs the short term risks. Q: Do you think the payments accountants receive from Xero for each client they recommend is a potential problem? My concern is they have the flavor of a commission, and if banned, may reduce subscription growth rates.

AndrewR

Hey Daniel, accountants don't receive payments (commission) as such from Xero. Rather they get a lower subscription rate than the client pays if they go direct to Xero. It's then up to the accountant to recover the subscription fee from the client either directly or building into their fee structure. Myob on the other hand pays a commission to the referrer for 5 years. In a way Xero respects the relationship the accountant has with the client. Myob on the other hand, sees the client as theirs once the referral has been made. AndrewR