The cloud has always been about promotion, marketing, content and communication. But in order to create modern business, you also need to look at how the role the cloud can play in managing less glamorous areas just as important to a business’ success, like accounting.
Jamie Sutherland, President of cloud-base accounting service Xero US, talks about how cloud-based accounting solutions are impacting small businesses today. He shares his take on how these kinds of services can help small businesses understand their customers, and help companies make better, more efficient decisions leading to better results. Below is an edited transcript of the conversation. The full interview can be heard by clicking on the player below.
* * * * *
Small Business Trends: Before we jump in, can you tell us a little bit about your personal background?
Jamie Sutherland: My career in software started with Sage. I ran a division that had small business accounting and some HR tools. But it was desktop software, and I saw the writing on the wall for that software and then came across Xero.
They were looking for someone to lead up the expansion in the US, and we hit it off. I believe in the way Xero is approaching the market, solving the needs of small businesses as well as accountants. Having them be able to collaborate easily is a winning model, and that was an easy decision for me to jump on board.
Small Business Trends: So for folks that may not be familiar with what Xero is and what you guys do, can you fill us in?
Jamie Sutherland: Xero US is cloud-based accounting software for small businesses. We take the premise of design and usability to the next level and have built the application from the ground up for the Web. Not only that, we focus in on making sure every single feature that we deliver to the market goes through a very rigorous process around design and ability.
It’s not just look and feel. We call it beautiful accounting software. It’s more about the workflow. Rethinking the old paradigms of desktop software and how a small business operates in today’s world, and designing features that just make sense for the modern small business.
Small Business Trends: How does a service like yours help an accountant build a modern accounting practice today?
Jamie Sutherland: We have a number of accountants in our network that have built their businesses on the back of Xero’s model, which is a really rewarding thing to see.
You can subscribe to Xero and see these online applications in a flash. Not only that, we provide a program to help you develop your business. What we are seeing is a number of partners of ours have gone from not having any clients up to over 100 in under a year. They can do that because the software is obviously easy.
Because we partner closely with accounting professionals, we list them on our website. What happens is, a small business that’s looking to get their taxes done, or some bookkeeping done, or some mechanic services, will come to our site and look up these accounting firms. I guess essentially driving them leads.
So a number of reasons are why being part of the Xero eco system is helpful to getting your accounting practice up and going.
Small Business Trends: Lets look beyond the accountants. How does a service like yours help a company who’s not an accounting based company, but still needs accounting services?
Jamie Sutherland: We focus on simplicity and ease of use. We’ve won some awards around our software being just that. We hear from small businesses time and time again that accounting can be complicated. So what we do is strip out all the accounting jargon for a small business so they understand the critical pieces of their business – which comes back to cash flow. It’s a clear line of site into what money is coming into the business and what money is going out.
Historically small businesses don’t keep their books up to date, and what we are seeing with Xero is that we make it easy to get information into the software through our partners. If you have a bank account and you authorize that bank account with Xero, back information will automatically appear inside Xero. So you eliminated that step around data entry, which is the bane of a lot of small businesses and bookkeepers.
Getting that information in on an automated basis and then keeping it up to date allows that small business or their advisers to help them make decisions in real time.
So the small business can save time and money, not only from the processing that needs to happen to get the data in and allocate it into the appropriate accounts, but you’ve got better information and insights into your account so you can make business decisions that are going to improve your business.
Small Business Trends: How has a service like yours given small businesses the ability to look at business a little differently, focus on customer engagement and less on important functionality, but functionality not core to their business?
Jamie Sutherland: We really see the Web as this open platform where connectivity and data flow should be seamless. I think that becomes the evolution of this.
So when you’ve got that ease of data flowing back, whether it’s your eCommerce engine, or accounting software, or CRM, point of sale, you’ve got not only real time information. But you’ve got the capability with a solid reporting tool to bring up information to make those decisions that can be key to your business. Many of those decisions revolve around the customer insight you get.
Small Business Trends: As an example with some of the stories you hear from your customers, how has that information impacted the way they view the business? Or the way they view customers?
Jamie Sutherland: From an accounting perspective, that visibility into the money owed to you and the money you owe – you can see where you’re spending your money throughout the month, and in real time so you can manage your cash flow.
Then looking at the payments that need to be made. And then looking at payments you were receiving, you can see who the outstanding debtors are and be able to keep up with that in real time.
I think it does come back from an accounting perspective, at least, because its a real time cash flow, and how you manage that. Money coming in is very, very visible inside Xero.
Small Business Trends: So where can people learn more about Xero and the services that you guys offer?
Jamie Sutherland: Xero.com, spelled with an X.
This interview on cloud accounting services is part of the One on One interview series with thought-provoking entrepreneurs, authors and experts in business today. This transcript has been edited for publication. To hear audio of the full interview, click on the player above.