Xero roadshow: SMEs are the lifeblood of the world's economy
“We are at the beginning of a huge shift; a digital transformation washing across ever country as the power of computers and network computing takes hold,” said Gary Turner MD EMEA of Xero. Turner was speaking during the Johannesburg leg of the company’s South African roadshow. The MD added that, with 350-plus eager finance professionals in the audience before him, the South African market was one of the most exciting for the company to move into. It is little secret that South Africa is a nation of small businesses. In fact, there are more small businesses in the country than there are big. According to recently undertaken research, the contribution of small businesses to GDP in South Africa is 52%. Interestingly, as many as 40% of these small businesses don’t use accounting software. “South African businesses don’t help themselves. 23% don’t sell online; 58% work 10 plus hours a day; 40% don’t use any technology,” said Turner. Xero hope to change this, and rewire the small business economy, he added.
"By harnessing the power of data you will soon see Xero becoming a powerful business insight tool, thanks to the cloud. It's so much more than just an accounting product."
Xero began in mid-2006 with the idea that there was something in the cloud for small businesses and accounting. Today, there are more than 700 000 Xero subscribers across 180 countries. "The scale of the opportunity we have is that there are 65 million people around the world who could use a product like Xero," said Turner. "There are 200 million small businesses worldwide. Xero can transform what it means to be a small business."
Tuner spent a few minutes talking about what a world in the cloud looks like, and how the increasing pace of innovation is bringing about enormous changes. "The cloud is one of the new ways that innovation and disruption is being felt across industries, and this wave of disruption is washing through everything that we do," he said. "You want to find that disruption before it finds you. You don't want to be an offline accountant in an online world."
Craig Hudson, EMEA Territory Manager for Xero, took the floor to explain some of the exciting nuances of the software, including that it can be used on smartphones via an app; the clever 'Pay Now function', which he says is helping people get paid up to 14 days faster; the helpfulness of real-time data, which allows you to see immediately when someone opens an invoice, for example, and the invoice reminders function, which can be automated for regular follow ups. Another innovative tool is the 'recode' function, which allows users to quickly and easily find and fix errors. To date, 11.5 million transactions have been updated and recoded, Hudson explained, effectively saving endless hours of time that would otherwise have been spent manually fixing those things.
"South Africa needs SMEs for job creation and revenue growth. Imagine the possibilities if every business increased productivity by just 2%?"
Oliver Furniss, GM Product, and Neil Sheehan, Partner Consultant, took the audience through a live demonstration of the software, both on a computer and on a smartphone, showing everyone the various functions; from the simple and every day to more complicated processes such as profit and loss, asset registers, and financial reporting.
According to Furniss, there have been more than 1,500 updates to Xero over the last 12 months, including design tweaks, user experience improvements and performance updates. Most of these are automatically updated, without the user even being aware anything has changed.
Another clever feature recently released is a contact service with Xero as the hub, which integrates into Gmail and Outlook 365 and allows users to follow up on payments by way of an invoice reminder. Xero also shows an activity stream for contacts and brings in the emails that match with that particular contact, importing only the relevant correspondence. Pretty neat.
A panel discussion rounded out the afternoon, comprised of Colin Timmis from Real Time Accounting and BDO South Africa, Guy Krige from DiGA, and Shane Prinsloo from BPAG. The three - all early adopters of Xero ? spoke about the challenges of implementing change in a business. They also spoke about their experiences with Xero.
"As accountants we are a conservative breed and are reluctant to change things or do things differently," said Prinsloo. "But don't be afraid. There's nothing to lose and everything to gain. If I consider the efficiency we've seen in our business, and we've been able to benchmark it, the improved collaboration between staff, and collaboration with clients, those steps towards change empower you to make other steps and make other changes in your business. All you've got to gain is peace of mind, a more enjoyable work environment, more time on your hands, and greater efficiency. Who knows, you might find you fall in love with accountancy all over again."
Timmis also spoke to the value added by Xero's culture of sharing and collaborating. "We need to connect with others and follow each other's blogs. We need to entrench ourselves in learning about this culture; because I cannot stress how important this culture is. If you're going to see your clients as the bane of your existence, you're not going to do well. You need to have a passion for what you do and allow tools like Xero to help you do that," he said.
Krige commented on the danger of being left behind: "It's the network effect - your businesses must become networked. You cannot have yourself on an isolated platform."
Summing up the discussion, Turner added his own thoughts on change, saying business owners need to have a clear sense of their own culture and values in order to pull that through into their business. It comes down to people, he said. He also spoke to the overall business landscape, and how different this is to even just a decade ago. "Business is becoming scientific. There's no excuse today for not knowing what's happening in your business. I think the role that professionals and finance professionals are playing is to help small business with data and to help them understand it. It's getting more complex by the year," he said.
Xero, with its ability to provide massive business insights, and its collaborative nature, is perhaps a perfect vehicle to help business to understand themselves and the landscape, and ultimately, to grow.