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Is Xero killing Accountancy Firms?

After all, video killed the radio star…

In recent times there has been an explosion of the use of Xero software from New Zealand to undertake accounting. Xero is pretty revolutionary in terms of the service it offers to small and large businesses in every type of industry and profession. It has revolutionised the provision of accounting tools and has pretty much wiped the floor with just about every other accounting solution there is on the market when being utilised by non-accountants.

Why is Xero so amazing?

The answer to this is that it can be used very simply by non-accountants who appreciate the system that enables them to understand their accounts, deal with day to day tasks and be able to interpret the accounts without the need to constantly refer to an external or internal accountant.

Furthermore, if you make a mistake in Xero you don’t have to worry about it because you can go back in and amend it very simply.

Compare this with the somewhat antiquated and dated operating system used by Sage, one of Xero’s closest rivals. Sage is from the North East of England and, in our opinion, never seems to have moved on from the day it was invented. Sage seem to have sat back on their laurels and let their software simply age without actually bothering to update it for the use of a modern audience.

We were recently on a Xero training course because our company has switched after many years from Sage to Xero. It was fascinating to hear on the course from accountants who were also undertaking the learning, and making comments such as “I really don’t like this and I much prefer Sage”. Or “Sage is so much better at dealing with this and you know where you are with Sage.”

By the Accountants, For the Accountants.

And this is primarily why Xero is so much better than Sage. Sage was written by (we think) and for accountants. This is pretty obvious if you have ever had the pleasure of using it. The language is accountancy speak, it is set up pretty much in the same way as manual bookkeeping and it allows no easy solutions to just about every task in the system.

Xero on the other hand was written for small businessmen to simply deal with day to day tasks, whether this is posting bills, issuing invoices, producing quotes, reconciling a bank statement and getting as much as possible to be done automatically, including sending invoice reminders and producing VAT returns.

Where does Xero leave Accountants?

So where does this leave accountants? Well we have noticed in the last 12 months quite a drop in the number of firms of accountants looking to recruit. It is possible that this drop is linked in with all kinds of external factors including the political climate, upturn and downturn in the markets, and many more issues.

However we have also noticed that when companies are looking to recruit, they tend to want someone who has Xero experience. They don’t seem particularly bothered about Sage, and occasionally are very interested in Quick Books experts (Quick Books is another accountancy package similar to Xero).

Firms of accountants are starting to hold themselves out as Xero experts and are promoting the use of Xero on their websites.

Has Xero killed off Accountants and does it represent a threat to future business?

We don’t think so. Although Xero has speeded up dramatically some of the accountancy tasks that before took quite a long time, there is still a role for accountants to play, and it is quite a large one. Not only do companies need someone to oversee their Xero accounts, they also need their annual accounts producing, and there are almost always quirky bits to every type of accounting that require expert assistance and advice on what to do with it. It may result in lower levels of hourly fees available, but if you are an accountant on a retainer with an annual charge for producing the various accounts then provided you remain competitive with other companies for these figures, there is no reason why Xero should represent a threat to you, but rather think of it as an opportunity. Whatever you do, do not try to encourage your clients to remain in other pieces of accountancy software. It is likely that all you will succeed in doing is driving them to use the services of another accountant, because they will invariably discover how utterly fantastic Xero is and decide that you have given them duff advice in encouraging them to use other software.

If you do not know how to use Xero now, then you may want to consider getting trained up as quickly as possible as it is going to become bigger than it currently is, and you are going to find it affects your services if you do not know what it is and how to use it.

To recruit Xero experts for your company or accountants with extensive Xero knowledge, please visit as we are specialist accountant recruiters. There is a real shortage of Xero-trained accountants and we are happy to assist.