41: Exploring Alternatives to QuickBooks: Our Journey to Xero

In this episode of Accounting with Confidence, I share our journey of adding an alternative to QuickBooks Desktop and QuickBooks Online to Xero, a cloud-based accounting solution. Discover the benefits and challenges we faced, the reasons behind our decision, and how Xero has streamlined our processes. Learn about the key features of Xero, including their integration with payroll and advanced reporting tools. Whether you're considering moving away from QuickBooks or just looking for a more economical solution, this episode provides valuable insights and practical advice.

Xero: https://www.xero.com/us/
Patriot: https://www.patriotsoftware.com/
Melio: https://meliopayments.com/
TechSoup: https://www.techsoup.org/

Transcript

 I am Beth Whitworth race car driving quilt making CPA firm owning wife, mom, and boss. I'm here to help you build a business you love by sharing all of the good, the bad, the ugly, and the excellent sides of working in this industry. It's not always easy, but after many years, I can finally say it's worth it.

Let me guide you on your journey to accounting with confidence.

Hi, and welcome to another episode of Accounting with Confidence. I'm your host, Beth Whitworth, and today I am here to talk about an alternative to QuickBooks, both desktop or QuickBooks Online, and our journey of how we got to this particular solution. I. So this episode is about zero XERO. It is a New Zealand company that has been around for a long time and has put together, they're probably one of the first people who put together a cloud-based accounting package.

A platform that, um, is. Like QuickBooks online that has the general ledger and all of, you know, accounts payable, accounts receivable, they have an integration with payroll, they have all of the reporting bank feeds, all of those things. So I wanted to talk today about how we. Ended up settling on Xero because it was not a straight line journey.

It was something that took us a little bit of time. So back in 2022, our primary platforms for our accounting. Internally and for our clients was QuickBooks Desktop, you know, pro or premier in a hosted environment. We host our inside advisory, but we also had some access into other people's computers so that, you know, into their servers by remote desktop.

And so we were. Still able to access any of those desktop files, including enterprise. So desktop Enterprise, we still have clients using that. And in 2022, we had some, we also had clients in QBO, so QuickBooks Online and those various levels. We had a handful of clients in Wave that was so we could at least have a general ledger.

You know, sometimes those were just our annual. Some of those clients were managing their own books inside of Wave. And then of course, we had a handful that we were still doing in some Excel spreadsheets because they were just. So small, had very little activity and didn't need any type of robust reporting.

We were just getting the numbers together to put them into a tax return. So we were working in all of those types of accounting platforms and we were also rolling out our. Conversion move over to Patriot for our payroll. Prior to Patriot, we were almost exclusively using QuickBooks Desktop payroll, and we had one of the enhanced payroll subscriptions for the firm.

So we were using that to manage, um, you know, 25 or 30 accounts inside of QuickBooks Desktop, whether or not they had an accounting file. In that file, we, you know, so if they were using QBO, we were probably processing their payroll in QuickBooks Desktop because QuickBooks Online payroll for us was never a strong solution and we weren't trained in it.

We, the experiences I had with it in the past left such a negative impact that I wouldn't recommend it. So unless the client was running their own payroll, we were moving them to our desktop enhanced subscription. Well, they decided they were, they being Intuit, decided that they were gonna stop selling any more desktop payroll subscriptions.

I. And they, we were grandfathered in with our enhanced payroll subscription, but for me that was definitely the writing on the wall that we needed to come up with another solution. So we investigated and we found what we're happy with, which is Patriot Payroll, and we started that conversion of those desktop clients over to Patriot in 2023 after we had gone, um, to the conference in June.

It might have been actually prior to that, we had investigated using Accounting Suite as an alternative, and we started that process of converting some clients and getting into their partner program. And I believe Accounting Suite has since changed their name to Custom Soft, but we found some limitations with how it worked for our clients and.

It wasn't something that we could easily move forward with. Felt very much like a desktop product that had been pushed into a cloud-based product. So, and, and maybe it was, it did sound better and the price points were better, but it, we. Didn't have the functionality we ended up needing. Now, it may be great for some people, I'm not saying that it wasn't, that it's not a good product.

I'm saying that for the volume that we had and for the things that we needed, we couldn't continue with them. So we knew that that wasn't a, a platform that we could use to replace all of our desktop. We knew we were going away and move some of our QBO over to something that had a better price point. So roll forward another year.

We went to the conference in June of 2024 and we talked to Zero, and we talked to them extensively, and I know some people who I have seen in the industry who are peers in the industry. I. Who are zero partner firms, and I'm like, and they've been zero partner firms for a long time. So I had always heard this software being used not as often as QBO, but as an alternative.

And people were loving it. So we talked to them extensively and we ended up signing up as a zero partner at the Scaling New Heights conference. And immediately went back and started figuring out who, when, how are we going to onboard these clients and get them off of QuickBooks Desktop. So we spent the summer and up to the end of the year figuring out that timeline.

And I can tell you that we had an excellent onboarding team. We had people that Sarah could work with as our champion of the software directly and get. All of our, our questions answered. We immediately started, she and I both got certified in Xero and included getting our migration badges and those types of things.

And the conversion app from QuickBooks Desktop and QuickBooks online were really good. And inexpensive or free. And so we were able to bring in, you know, two and three years of prior data from these files. Now what does that mean for files that have 15, 20 years? Well, it means that your file is probably too big and QuickBooks desktop anyway, and you should have purged some of that.

Done a cleanup, done a consolidation of some something, but I was totally fine with. What they were bringing forward. It had some lower price points that were very attractive because they also have unlimited users. So, whereas in some of the QuickBooks online subscriptions, you were limited to how many users, unless you were going to give them a view only to reports or those types of things.

Unlimited users, including users and your clients. Firm. So once we were ready to turn these accounts on, to release them over to the client, for them to have input, they could have any number of people, and they definitely had, you know, restrictions. So there were various levels of access that anybody could have, and so that was really good.

What I found with Xero was that it seemed easier to train than the experience we have been having with QuickBooks online. Zero is not necessarily rolling something out daily that changes the interface, changes how a screen looks. And what I found with QBO over the years is, you know, they're rolling stuff out all the time.

Xero seems to be more cognizant of doing it quarterly. Now they know and they recognize things, oh, we probably shouldn't have ruled that out during tax season. And they will learn from from some of those upgrades, but it doesn't feel like it's a constant moving target, so that as soon as you have recorded a process that you wanna share with your team or with a client in QBO, oftentimes we were going back in going, okay, well that screen changed the menu's in a different place.

They called that they changed the name of that menu. So I am feeling much more sort of stable inside of zero with just knowing that changes like that can. Really upset the apple cart when you're looking at consistent, accurate accounting. So I did find it was easier to train and their certifications were good.

Um, I felt pretty good. There was a few things that I probably need some refreshers on. They have much more robust reporting and reporting customization, and I haven't spent enough time yet on really learning how to. Make those reports something that I am really good at, but that's also something that's always been a weakness.

Um, doing reports and generating reports, doing all of that report writing, that's always been something that has never been my strong suit. So, but it's not hard, it's just I haven't had time to really circle back to it. Now what we haven't been using inside of Xero is any of the payroll. So they partner with Gusto, and like I said, the year before, we had already started converting our clients over to Patriot.

So the way we handle that is we set up a recur or memorized ki type of journal entry that we. Essentially take that payroll register, plug those numbers in, and you know, away we go. And that is a lot of what we were doing before in QuickBooks Online Now. I know they say they have the ability to, you know, push Patriot Journal entry into QBO, but payrolls are not always exactly the same.

And so what we would run into is that there was something different. There was a reimbursement, there was somebody added something, and so that was never, we still had to go through that journal entry and review it. So now we're just having to, we're entering it. But what I do is take the last one, copy it, so all my accounts are there, change the date and put in the numbers.

So I, to me, that's not that much work. It's definitely not changing anything of what I was doing when my file was in QBO. It does change what it's doing. When my file was in QuickBooks desktop, because QuickBooks Desktop, I was still using the internal payroll. And obviously that all posts directly to where you want it to.

The other things, um, that I kind of haven't touched on with them is, but are out there, and I am going to dive into that. Next is their analytics and their kind of their business dashboards. They are now actively working with a purchase SIFT, which. Was a reporting platform and you have access inside of Zero to get to SIFT reports and the just the basic dashboard is showing great stuff.

Stuff that I would normally be trying to run a report to get. It will give me that on their dashboard. Your gross profit percentage, your net income. Amount and percentage your highest revenue customers, your, your revenues, you know, over time, all of those things are built into these dashboards and are super easy to see and look at and find.

So sometimes, you know, in some softwares, you just can't find the analytics that you want. I'm really looking forward to being, to able to put some of those in place for our clients and start these dashboards and, and invite them into the file where they can see those dashboards, and I'm excited about that.

Now, we're still having, most of our not-for-profits use QuickBooks online, and that is because. Through, uh, tech soup.org, they have a client program where they essentially provide subscriptions to software on an annual reduced cost basis for not-for-profit. So you have to prove you're not-for-profit, and then you can get your QBO subscription for under a hundred dollars a year.

And so that. Value right there is why we are continuing to put our not-for-profits in QuickBooks online because there's really no place else we can get that value. And so there's other third party apps in that, in Tech Soup, there's, you can get Adobe subscriptions or Microsoft subscriptions for not-for-profits.

And since we work with so many not-for-profits, it is always our goal to minimize their accounting costs. And if we can get them into a subscription that is something that is so vastly cheaper than what you can get on a monthly basis, then we do that. So as we went through and did all of the setup on Zero and converting, we converted all of our internal clients.

So ones that we were maintaining a QuickBooks desktop file of their records quarterly or month, once a year, just to get tax returns filed. Those were the first to get converted over, and I know you're gonna say, Hey, but QuickBooks Desktop, you can put all these companies in there and you don't get charged per company.

Do you get charged per company for zero? Yes, but when you're in the partner program, there are some options of platforms that are vastly reduced. It's like a general ledger program, and so that's exactly what we were using that QuickBooks desktop for. So yes, there's now a minimal monthly cost. But I can start to give up my desktop subscriptions that are skyrocketing.

So the price increases we've seen on QuickBooks Desktop. Yeah, that's great. You can have as many companies as you want, but the prices are. Going up by 50% every year. And so you're spending so much more on this desktop software. Your clients can't get into it. You don't, you know, there's less functionality.

Eventually we're gonna cut those licenses and be spending a whole lot less on zero for our internal files, and it's great for a general ledger. It's great. You can still get good reporting out of it. You can have bank feeds on one of those lower levels and so. For me, it was kind of a no brainer. So we moved all of those and then gradually started moving desktop clients who.

Did get into their files and QBO clients that didn't get into their files because we were maintaining a QuickBooks online file, but they just never accessed it. And some of that was our investment companies, our personal people that we did personal accounting for. We started moving those into zero and it was a process that was.

I won't say that it wasn't complicated, but it was apparently very well laid out in how that worked because Sarah was able to convert all of these companies. Um, we now have probably about 25 clients in, um, zero and including some of our internal ones, and I moved our file Accounting Solutions group file.

I moved it to zero at the beginning of this year. I had been in desktop for. 15 or 16 years. I made the move over to QBO when we moved to Canopy so that we could have some push into QBO and then, and I hated it. I hated my live file being in QuickBooks Online. And so I was ready by the beginning of the year to put our books on zero.

And so I've been using that as my learning tool and really like it and have been. Way less frustrated than I was for the year that I was on QBO. So that's just kind of the background of what we've been doing, how we've been doing it. We will continue to grow our zero usage as an alternative to QBO. The price points on QBO continue to go up, and I'm not gonna say that zero's not gonna have price increases, but Intuit is.

Kind of on a mission. I'm not sure exactly what the outcome of that mission is supposed to be, but how it's impacting us is that files with minimal use, even price is just going up and up and up. So if we can move some of those files over to zero, I think just from a cost standpoint, we're in a better place and we're not losing much functionality.

So there's a new price increase from Intuit that is going. In place July 1st for client build, if it's directly billed to you. And August 1st for it is being billed through our wholesale account, and it's anywhere from eight to 50% depending on what subscription, what thing you're in and what you're using inside of.

Of the Intuit products, including Desktop Enterprise payroll, QBO Payroll, TSheets, which is now QB time, every version of QuickBooks online from advanced on down. Now Intuit still has their new release of their Intuit Enterprise Suite, which is actually a online. Version, it's supposed to be something that is going to start to have a solution for your construction clients, your people that need job costing and some higher end things that the other QBO solutions have not provided in the past.

I haven't seen it except in, in passing you have to talk to a rep to get any pricing on it. And my understanding it is a really. Pricey. So you're comparing it to a NetSuite. You're comparing as far as pricing, you're getting into the tens of thousands of dollars, not the $2,000 and less. So that product is something that I haven't investigated very deeply because I really.

Don't trust that it's really gonna encompass all the things I need to replace my enterprise clients that are on Enterprise Desktop, because then you are forced also into their QuickBooks Online payroll, which I have recently been working in with a client, and it's still a very. Painful process for me when I look at how they have things set up.

Like you, you have to do things that I, I think is a bad workflow, and so I still don't wanna recommend QBO payroll. So with that price increase coming, I encourage you to. Take a look at Xero. Now I have yet to get my partner program profile set up, but that is on my to-do list. So if you are, if you're in even considering it, I would love it if you would reach out to me and I will help get you set up into Xero.

And I am one who likes to pass on any savings that I'm getting. I wanna pass it on to my clients because they want the most economical. Accounting platform that they can have and sometimes that you don't get that great of a deal if you're just buying it straight out at the retail prices, or maybe it's a discount for three months.

Sometimes I can get deeper discounts, those types of things. So if you're even considering Xero, or if you want to see more about Xero, I would love it if you reached out to me. I know there's some timeline here that we are still not privy to what it exactly is for the sun setting of some of this desktop.

Programs, but it's still coming. And so finding you a solution is something that we want to do. Now, I still feel like for the larger entities, there's thing people who need job costing, who need job cost and payroll, who need WIP reports, who need a lot of these things. We may or may not see a great fit inside of Xero, but I will say that we don't have experience in it yet.

So as we get some of these clients into it, we may find that it's a great fit. Now, I mentioned that Xero, they purchased a SIFT, which gives the analytics and reporting a big boost. They also. Purchased, I wanna say it was Deere, which is an inventory system. And so those types of things are getting kind of incorporated into their higher package, you know, their higher levels.

So they're growing or established, have some of this inventory in there that is taking advantage of products that were really good inventory systems and now they're being incorporated in here. Then just last week we heard that Xero purchased Melio, Melio, however you wanna say that, which is a, what we use it for is for bill paying.

So we have, you know, vendors that go into QBO or Xero, and then we push them into Melio for them to send the ACH or the paper check. And now they just purchased Melio. So that's also going to really lift up their. Product to have some of that more established processes that were built by these standalone packages be part of this whole system.

And I'm really looking forward to what that will look like for us. Because like I said, we are already using Melo, so now to have it inside of Xero makes it seem even. Even better for me. So, so that's what I have to say today about Zero and our journey to how we got to Xero as our alternative. And also, you know, things that you could consider in making decisions about moving from QuickBooks Desktop or if you were just, Hey, do I really need to pay as much as I'm paying in QBO?

Is there a more economical solution that does what I need it to do? I. And we'd be happy to talk to you about it. So shoot me a, an email, send me a dm, do whatever, you know, put a, a note in YouTube and we will, we will get back to you because this is something that is top of mind for most people right now in thinking about, um, making a switch out of the desktop platform for QuickBooks.

Or it's a good time of year to start figuring out what does a conversion to another software look like Now, you don't wanna be waiting until November and say, Hey, I really wanna change softwares. We need to, even if we're gonna do a January 1st. Switch over. We need to start planning for that now. So I would love to talk to you.

Like I said, I'm gonna get that zero partner program profile done and hopefully before this episode comes out so that I can put that link in the show notes. Okay, everybody. Remember, I am here to help you build a business that you love, so I hope that you enjoyed listening to this. Tech update and I will talk to you next time.

Bye-bye.

Thanks for listening to another episode of Accounting with Confidence. My hope is that my experiences can help you navigate the realities of owning and operating your business. Please subscribe or follow the podcast on your favorite podcast listening platform so that you never miss an episode. Feel free to leave me a text by using the, send us a text message link in the show description and let me know how I'm doing.