Xero Pricing Changes for Australia (Commencing 28 September, 2018)

As mentioned in our email, Xero have recently announced they will be increasing the price of a number of their monthly plans, so as a Xero user it is important you are aware of the changes including how it will impact any invoices from CapitalQ and direct debits if you have them in place …

Xero Announcement

Xero announced in July 2018 that prices changes would be coming for Australian subscribers. Their justification for the increases include –

Continual improvements to features such as reporting, payroll and the mobile app
Additional regulatory compliance (ie. Single Touch Payroll)
$250 million spent on R&D since 2016
Prices have not been adjusted often, but there comes a time when they need to be reviewed to ensure they align with the value delivered.

When do the changes take effect?

The changes take effect from 28 September, 2018 which effectively means for the month of October and moving forward.

Is there some good news?

Yes, if you are on a plan that currently costs $50 per month or less, you WILL NOT be subject to a price increase!

To clarify, this will be businesses who account on a “cash” basis only (which are generally only small, simple businesses) and businesses who have only one employee utilising the payroll function.

So what is the damage for everyone else?

The table provided by Xero (with our mark ups) is below …

Xero Australia Price Changes (September 2018)

As you can see, there is no price change for the $25 and $50 per month plans (nor the Partner Only $11 and $22 per month plans some of our Clients are on which are not shown).

And for Premium 5 and 10 plans the increase is a modest $5.

But for the larger plans (which are primarily used by Clients with large teams of employees) the increases are more significant including a substantial increase of $50 per month for the top, Premium 100, plan!

How will the changes work?

So, if you pay for your own Xero the amount deducted from your Credit Card during the month of October will reflect the new price.

If we cover your Xero and then on-charge you via invoice, or if your Xero is included in an agreed Service Package, our next invoice (likely to be issued in early October) will reflect the increased price.

If we also Direct Debit your account to pay your Xero invoice, the Direct Debit will reflect the new price on the usual date bieng the 10th of the month (October and thereon).

Is there anything you can do?

Well, first things first, check your number of employees, and if you are on a higher plan then you currently need to be, let us know so we can make the change (yes we do our best to monitor that for all Clients, but with team numbers constantly changing for many Clients, we may not catch all scenarios straight away).

Other than that, we are afraid the answer is ‘not really’! Despite the increase, Xero remains by far and away the best small business accounting package in our opinion, and even with an increase in price, the value it brings to your business (and your life) far outweighs the cost.

However, if you have any doubts in that regard, please get in touch and let us know? It is likely we simply haven’t adequately conveyed the real benefits to you, or you need a reminder. But you never know, for one or two Clients, maybe things have changed and alternatives could be worth considering.

Duncan Melbin’s firm first became the business accountants for Exploration Data Services, and my Family, when he was still a Graduate Accountant some 24 years ago. Myself and my late business partner have followed him ever since! In the early days Duncan was very proactive in regards to fine tuning our business structure and the benefits of getting the structure right early are still flowing today. Throughout my time working with Duncan he has played a key role in ensuring our tax affairs have always been in order and our tax obligations have always been minimised and well managed. Duncan has also played a key role in ensuring my Family and I have adequate wealth protection in place and that we have maximised our wealth creation including through a regular superannuation contribution strategy and the use of a self-managed super fund that keeps us engaged, in control and to a large extent free from the perils of the GFC. More recently we took the opportunity to outsource our entire back office accounting function to CapitalQ including switching our accounting and invoicing to Xero. I now spend barely any time at all on my monthly accounting and Activity Statement lodgements, as CapitalQ have it all in hand. This allows me to focus on running my business better, and frankly to have more time to enjoy the spoils of a life in business. I work closely with Kapil Bhasin, our Client Manager, and Peter Melbin, our outsourced Bookkeeper, and they are clearly very valuable assets for CapitalQ. Working with Duncan, Kapil and Peter is very easy, they respond promptly to any queries I have and most importantly I have complete trust in the advice they give me and that my business affairs are being well looked after. I would recommend CapitalQ to any potential client without reservation. So if you own a small business or are looking to grow your wealth I highly recommend you speak to the CapitalQ Team. They will give you good advice, and ensure you are on track for a sound business and financial future (and outsourcing your back office accounting process to them, and switching to Xero, will be two of the best business decisions you will make).