Total Cost of Ownership of Xero compared to a traditional desktop accounting software

Kelly Migro - Monday, September 19, 2011

So do you think that using xero and the monthly subscription fee is going to cost you more money than buying a software package off the shelf? Think again check out the below table which compares Xero with traditional desktop accounting software like MYOB or Quickbooks, there is not only savings to be made in terms of dollars but also a lot of time saving!

Xero Online

Desktop

Issue

Impact

No software installation

New feature release installation every year, and compliance release (tax tables)

Minimum 2-3 hours per year installing software

Your time & $$$$

Unlimited users

Pay per user

Reduces efficiency in your business

$$$$

Performance not linked to computer

Speed linked to computer

No need to replace workstation or file server every 3 years or more frequent reformatting to maintain performance

$$$$

Automatic backups

Manual backups

Time, consumables, incorrect storage and manual processes.

Your time & $$$$

Secure, bank level security

Unsecure

Data not secure held on desktops and local servers etc. File passwords easily cracked.

$$$$

Upgrades monthly

Upgrades yearly

Delays in product enhancement

Your time

Unlimited free 24 x 5 support

Paid support

Time on phone, support cost itself

Your time & $$$$

Single Ledger

Easy collaboration with accountant and bookkeeper

Disconnected, poor collaboration, data always out of sync

Industry average is 25% of accountants billing time due to moving data-files to/from SME

$$$$

Easily produced monthly management reporting to allow better business decisions

Traditional accounting report

Potential for poor business decisions due to inaccurate or delayed financial data

$$$$

No product activation or confirmation

Product activation and confirmation every 6-9 months

Your time

Your time

Work anywhere

Workforce has to be at the site

Flexible workforce, work life balance

Your time & $$$$

Free unlimited bank fees

Manual data entry

Pay for bankfeeds

Your time & $$$$

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Total Cost of Ownership of Xero compared to a traditional desktop accounting software

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Xero Online	Desktop	Issue	Impact
No software installation	New feature release installation every year, and compliance release (tax tables)	Minimum 2-3 hours per year installing software	Your time & $$$$
Unlimited users	Pay per user	Reduces efficiency in your business	$$$$
Performance not linked to computer	Speed linked to computer	No need to replace workstation or file server every 3 years or more frequent reformatting to maintain performance	$$$$
Automatic backups	Manual backups	Time, consumables, incorrect storage and manual processes.	Your time & $$$$
Secure, bank level security	Unsecure	Data not secure held on desktops and local servers etc. File passwords easily cracked.	$$$$
Upgrades monthly	Upgrades yearly	Delays in product enhancement	Your time
Unlimited free 24 x 5 support	Paid support	Time on phone, support cost itself	Your time & $$$$
Single Ledger Easy collaboration with accountant and bookkeeper	Disconnected, poor collaboration, data always out of sync	Industry average is 25% of accountants billing time due to moving data-files to/from SME	$$$$
Easily produced monthly management reporting to allow better business decisions	Traditional accounting report	Potential for poor business decisions due to inaccurate or delayed financial data	$$$$
No product activation or confirmation	Product activation and confirmation every 6-9 months	Your time	Your time
Work anywhere	Workforce has to be at the site	Flexible workforce, work life balance	Your time & $$$$
Free unlimited bank fees	Manual data entry	Pay for bankfeeds	Your time & $$$$