A quick look on the Xero partner page today yielded some interesting results. Only a week or so after having released its API, Xero already has four partners (plus their own Xero to Xero transaction ability). I took a look at a couple of the offerings (the other two are specific real estate industry solutions).

iPayroll  

iPayroll is a New Zealand based payroll solution. It’s a little disappointing as the initial payroll solution to be partnering with Xero – their site is pretty amateur and the pricing is steep. As an example, for my manufacturing business with 10 or so weekly pays, we’re looking at over $25/week. That’s over $1200 per annum for something that has no real value add (it’s SaaS/s as opposed to SaaS/v).

If we do a direct comparison between Xero and it’s competitors we see that Xero costs around $600 per annum. This is slightly more than it’s installed software competitors (MYOB v17 is selling for $469 on TradeMe). For this we get some real value adds like direct bank feeds, Xero network value adds and lots of goodness to come from their open API strategy.

iPayroll on the other hand costs nearly 5 times what the competing product does (MYOB Payroll on TradeMe is going for $250) and, as far as I can see, offer no real bonus (other than the on-demand aspects). It’s hard to see where iPayroll could really add value – payroll is a pretty generic offering.

I’d be surprised if we didn’t see a Xero payroll product in 12-18 months – they could create it easily using some of their existing code, make something that worked really nicely with their accounting offering, and could generate significant extra revenue. Even undercutting the other SaaS payroll products, the could create a 100% revenue boost from companies needing payroll (iPayroll is around $110 per month for 10 staff – if Xero could do it for half that they’re doubling the revenue they make from the accounting users – win/win)

WorkflowMax  

WorkFlowMax is a job and project management offering. It provides timesheeting, job tracking, project management as well as pricing andinvoicing functionality. Priced at $90/month and an extra $20/month for extra users, it’s also a pretty heftily priced option.

It’s a pretty fully featured offering, there is a bit of double-up with stuff Xero already does, invoicing, AP, contacts and the like, but it seems to be pretty substantial.

I can imagine WorkflowMax adding some value to the sort of users that need it’s functionality – perhaps software companies with lots of project planning to do, or Architects and the like.

Other than the double up on some particular functions – WorkflowMax (and other offerings of its ilk) seems to be a reasonably good fit with Xero

Summary

The API has always been the secret sauce for Xero that will provide the real value-add that they’re promising. It’s great to see it rolled out, and even better to see partners start using it quickly. I can’t comment on the real estate solutions but they would seem a great way for Xero to target discrete verticale. The project management functionality makes sense and is sufficiently outside of Xero’s core busienss as to be a good fit. As for payroll – Rod, get a few of those hot shot developers onto it soon!

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

9 Comments
  • Presumably the API itself is still private at this stage? I can’t find any mention on the Xero website. As a developer I’d love to see what they’ve implemented and made available through the API and whether integration with any of our offerings is viable at this stage. I’m sure there are plenty of others who would too.

    I suppose I best go off and pose this question to the people themselves 🙂

  • iPayroll does offer a number of bonuses over products like MYOB. For example, we do the banking and tax-filing for our customers – no transmitting files to the bank (or re-keying information into Internet banking), and no PAYE and KiwiSaver reconciliations, returns and payments. All of our customers would rate these as big “value adds”, and as a service we offer a number of such additional features over payroll products.

    Your pricing comparison ignores these services we offer over in-house products, and excludes the hidden extras in those products – typically annual licence/upgrade fees and per-event support charges. Our prices are certainly competitive.

    Every month we get many new customers who are sick of the shortcomings of competing products – including MYOB and see real value in the services that we offer.

    Like you we are excited over the Xero Network, we’ve been doing SaaS for over 6 years now and its great to be now able to partner with other complementary web services.

  • For something completly free you could try MYOB’s Payroll Startup. It’s a full version of their other software but for a small company of 3 or less employees it’s free.

    Easy to use and there are no hiddens costs. It has full HMRC accreditation and you can do your yearly filing online and keep track of sick, holiday pay, etc.

    http://www.freepayrollsoftware.co.uk

  • Phil – Give Rod an email and he’ll sort you out

  • Cary

    Granted tax filing is a bit of a bonus. As for the banking part it’s a one click option in other offerings so not overly onerous.

    My pricing comparison was an attempt to point out the extra cost of the move to SaaS. iPayroll has a much higher multiple than Xero, regardless of hidden extra costs. I’d be the first to agree that SaaS is beneficial as all costs are upfront but this wasn’t the comparison I was making.

    Glad to hear you’re picking up new customers and best of luck for the business

    Ben

  • @Phil: Xero’s API is nice and RESTful. You HTTP POST an XML document fragment (preferred), JSON or CSV text and the API will return normal HTTP responses.

    They currently accept invoices and will write custom parsers for other document types, as required by their different partners. With iPayroll we are posting GL journals.

    Every partner is issued with an API Key from Xero, and each of their customers also has its own key which must be embedded in the posts.

  • Falafulu Fisi |

    Datacom has one called Nettpay. Nettpay has been around for 8 years and I am not sure how they (Datacom) market it, since it is not widely known. The development of Nettpay started in 2000 (when I was still working at Datacom) using Microsoft technology.

    So, there are a few payroll apps. available today in the country competing for the same market.

  • iPayroll certainly does have many benefits compared to other payroll apps. Just a few of these benefits are:
    1. Customers have free and unlimited helpdesk support where the helpdesk staff can login to their payroll and help them fix up any errors that they may have made.
    2. They have the ability to have the payroll set to automatic if they have standard pays which means they don’t even need to login unless they have leave to record or if they have 1 off payments to make to their staff.
    3. Customers can have different access levels setup, an example being an access set for a junior staff member to complete the data entry for the pay runs but they can’t view any dollar values that the employee’s get paid.
    iPayroll cuts down the time it takes them to do their payrolls considerably. Time is money and when these business’s add the time it takes to run the pay, do the banking, file the tax, and sending forms to IRD, then they add up their hourly rate times the amount of time they spend doing these chores, more often than not it’s cheaper to pay for iPayroll, also it’s ease of mind that their payroll is always done correctly and they never have to worry about getting penalised from IRD.

  • Datacoms NetPay is definately the tried and tested payroll for small and medium sized businesses. As its completely online it can be done from anywhere and is updated constantly to be fully complient with NZ payroll laws. It has a free help desk and Datacom will set up your employees details so it is ready to use immediately. Print your pay slips and full reports as well as have your PAYE and IRD E-filing done for you also. Its and award winning product for just $20 a month! http://www.datacompeople.co.nz

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