The low end accounting software market in Australia, dominated by MYOB and Reckon’s Quickbooks, has received a major shakeup in recent months, with New Zealand based Xero signing up over 100 new users a day.
“Nearly half these are people who previously had no accounting software at all,” Australian managing director Chris Ridd told iTWire. “They were using spreadsheets or having their accountant do it all, often on MYOB or something similar. Now they can do it themselves on an online subscription basis.”
Ridd ascribes Xero’s success to its SaaS cloud-based model. “Small businesses are beginning to accept cloud, and our competitors are late to the market. MYOB has a clumsy hybrid model which still ties the software to a particular PC, and Reckon are still months away from launch.”
Xero has three subscription levels: small ($29 per user per month), medium ($49 – the most popular) and large ($64). It also has a personal finance package.
Xero was formed in New Zealand in 2006 by well known Kiwi IT entrepreneur Rod Drury and accountant Hamish Edwards. It has been in Australia since 2009, and also has offices in the UK and the USA. It has 300 staff, 75 of them in Australia.
In 2011 it acquired Australian payroll specialist Paycycle for $1.5 million, which enabled it to add payroll to its functionality. It listed on the New Zealand Stock exchange in 2007, and also listed on the ASX in November 2012. A major backer and board member is Craig Winkler, who founded MYOB in Australia in 1991.