Today's Technology for Tomorrow's Firm.
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January/February 2014 • www.CPAPracticeAdvisor.com 7 REVIEWS: VIRTUAL CFO PLATFORMS Zealand and Australia, and we expect to see many improvements to Xero's solu- tions in 2014. As of September 30, 2013, Xero boasted over 211,000 paying cus- tomers and the company experienced growth of over 60 percent in all of its geographic segments for the fscal year then ended. During the same period, Xero's US presence increased by over 100 percent. More importantly, Xero added 25 of the Top 100 accounting frms to its partner channel, and the US partner program exceeded 1,000 accounting frms for the frst time. Te product has signifcant momentum as a tool for vir- tual accounting services performed in real time, and is defnitely a product to watch in the coming months. The real challenge for all of these applications is providing useful informa- tion on days other than that one day in the following month when the previous month's fnancial statements are released to the client. Collaborative accounting and consulting as a virtual CFO requires accountants to maintain the client's books more frequently and to expand the amount of real-time information being presented to the client as more current data that doesn't require adjustments is available. Te real desire of all accountants is to have real time information w ithout having to perform real time work to maintain it, and some of the applications deliver better on that promise than others. Xero and QuickBooks Online can display real time bank and credit card balance information obtained from financial institutions daily, as well as automatically download and import data on the related transactions. Accounting C S a n d A c c o u n t a n t sWo r l d o f f e r accounting professionals a greater level of control by allowing the virtual CFO to limit the features, menu options, and reports which are accessible to the client and frm staf at a very detailed level. Additionally, some applications have tighter integration with applications for professional accounting firms than others. While no application performs all tasks exactly as every accountant and client would like, practitioners should select the application which will help them and their clients have the informa- tion which best meets their individual needs. Some firms may end up r unning multiple applications to meet the needs of diferent clients – Xero or QuickBooks Online for startups, Accounting CS or Accounting Power for existing write-up clients, with add-on applications to help clients meet common needs like CRM, inventory management, and expense reporting. Just as accounting profes- sionals like receiving personalized ser- vices, we do ourselves and our clients a disservice when we use tools which do not efectively meet the needs of both parties for timely, accurate information. Additional Solutions for Accounting & Write-Up We considered many other solutions for inclusion in this rev iew. Since this review is really a successor to our his- torical client write-up tool reviews, we have chosen to focus on cloud-based tools which are commonly used for client write-up, and have intentionally lef out many of the on-premises tools we reviewed in the prior year. Tere are many other products which could be used for client accounting and collab- orative client write-up, including: • FreshBooks • CYMA 13: Financial Management Systems • Micronetics Accounting E x per t Enterprise Edition • PC Sofware Client Write-Up • K a s h o o / P a y c h e x O n l i n e Accounting • Sage One • QuickBooks Accountant Edition • Intacct • Sage 50 Quantum Accountants Edition • Wave Accounting / Wave Apps • NetSuite Xero Accounting, along with the Xero Partner Platform multi-client interface for accountants, is a cloud-based platform for those working with multiple clients. Te product is best used by service-based organizations, is easy to use, and provides a platform for automating the classifcation of transactions. STRENGTHS Excellent ecosystem of add-ins created by startups or companies who have not traditionally had a presence in the US market, including third-party invoicing applications like Harvest which are sales and A/R subledgers designed to be oper - ated by entrepreneurs instead of accoun- tants. Automatically imports transactions from thousands of US banks securely and can automatically classify these transac- tions according to user-defned rules or match them to existing transactions based on amount or vendor. Xero is the only product included in this review which natively supports multiple currencies in its current US production version as of this writing (early December 2013). User interface for classifying groups of imported bank and credit card transac- tions in batches is excellent, and minimizes the required data entry. Batch data entry screens are as good or beter than any other product reviewed for focused, quick entry of large amounts of data. Includes a "Xero to Xero" function which, when enabled, automatically takes invoices from the billing Xero company and imports them in as bills to be paid in the receiving company's Xero account. POTENTIAL LIMITATIONS Product is relatively new to the US market (less than three years old), and its frst company-provided US payroll service was launched in early December. While the application has integrations with a wide range of add-on applications, its connec- tions with professional tax and accounting applications are few, and those which exist require manual intervention to accomplish the desired tasks. Many of the add-ons for this product are designed for smaller businesses and startups instead of larger mid-market organizations. User interface is a forms-driven interface designed for business owners and not accountants. As a result, accoun- tants may require some time to adjust to the menu structure. Te current version of the reporting engine is not as mature and fexible as we might hope at this point. Functions like the ability to save fltering schemes on existing reports as a new "memorized" report are not present in the product at this time, although there are reportedly signifcant improvements to reporting coming in 2014. Some Xero partner program benefts, including free use of the Practice Manager and the upcoming Workpapers application, require the organization to have 25 or more organizations (minimum of $300/ month in spending) to qualify. Tis may make Xero appear to be a beter product for high volume write up and bookkeeping than it is for practitioners with a small number of high value virtual CFO clients. SUMMARY AND PRICING Te Xero partner program and the introductory training is free, but not all benefts are available to new members. Some Xero partner program benefts, including free use of the Practice Manager and the Workpapers application to be released in 2Q 2014, require the accounting frm to have 25 or more participating clients (minimum of $300/month in spending) to qualify. Additionally, it costs $249 per employee to take the online training required to become a Certifed Advisor ($399 for the same live training in a classroom). Tis may make Xero appear to be a beter product for write-up and bookkeeping than it is for practitio- ners with a small number of high value virtual CFO clients. Xero Business plans include an unlimited number of users, and are priced from $9 per month for a starter plan with no employees up to $180 per month for a Premium plan which supports multi- currency, payroll for up to 100 employees, direct deposit, and electronically paid and fled payroll taxes. Members of the Xero partner program are eligible for discounts based on volume, and gain access to marketing resources, management tools, and special Xero service plans for accounting professionals. www.xeroaccounting.com Xero Accounting and Xero Partner Platform Read the full review and see expanded ratings for this product online at: www.CPAPracticeAdvisor.com/11294688 cpa_6-9_VirtualCFO Review.indd 7 2/5/14 11:41 AM