Telstra's Xero - the price is wrong?

Stephen Withers
Tuesday, 28 July 2009 09:06

Opinion and Analysis

Small businesses are prime targets for a new feature of Telstra's T-Suite SaaS portal, but they are also cost sensitive - especially in the current climate.

Accounting and cloud computing are a pretty good match, as long as you trust the provider to keep your data securely.

To start with, changes to tax rates occur most years. Software providers generally refuse to provide updated tax tables (even though that could easily be done from a technical perspective), using them as a lever to force many users to pay for an upgrade every year or two.

This means accounting software is practically a subscription business anyway. (Very small businesses with no employees, or so few that they are prepared to handle the payroll manually, are the exception and may be able to keep using the same version for years.)

Cloud accounting also means you can easily do some of the work in the office and some at home in the evening - or anywhere else, for that matter.

It also simplifies use by multiple people. If you want your accountant to have ad hoc access to your books, that's easily achieved. Cloud systems can allow selective access, so you can limit people to just the areas they need to do their jobs, such as creating invoices.

So the arrival of the Xero accounting application on Telstra's T-Suite sounds quite promising.

Until you see the price: $54.95 per month.

There's no payroll, so it is comparable with QuickBooks Accounting 2009/10 which sells for around $250, or MYOB Accounting v18 which is just a little more expensive.

That's around $10-$15 per month if you buy the software every time a new version comes out, versus $55 per month online.

Do you see an extra $40 of value?

There are other online accounting services. Saasu, for example, is free if you do no more than 15 transactions per month (admittedly, that would be a very small business), or $25 per month for up to 2G of data (approximately 50,000 transactions, according to the company).

So despite some attractive features such as automatic daily importing of bank statements (ANZ, Commonwealth and NAB), Xero's not for me.

I'll stick with QuickBooks 2002 for now. It has cost me about $3 per month, and that figure keeps falling the longer I use it.