Feeling Forced into the New QBO? Why I Prefer Xero...

Let’s talk about what’s going on over in the world of Intuit, and then I'll tell you why I prefer Xero.  

For those of you who don’t use QuickBooks Online (QBO), there’s a new version that has been recently rolled out called Harmony.  

Catching Clouds actually knew about this release last summer and requested to be converted to this new version early in the fall of 2013 because we like playing with new software, and the old version of QBO had some features that annoyed me.  Plus, we had heard glowing reviews from the accounting technology community.

[As a side note… we specifically asked about getting put on the new version early while at the Intuit booth at the Sleeter Conference in the fall of 2013.  One Intuit employee walked us to another Intuit employee who walked us to a third Intuit employee who took our information and said they’d call us back.  I told Scott that it was like being routed through telephone customer service only in human form.  They did call us back either that night or the next day, by the way, but they told us there was nothing they could do… we just had to wait until it was rolled out to our customers.  Ok, whatever.]

Well, now it seems that Harmony has hit pretty much all of Intuit’s QBO customers, and according to QBO’s blog [note: the original link "whats-new-in-quickbooks-may-2014" has since been redirected to the main QBO blog page to remove it from public view], customers are NOT too happy about it.  

Nearly 1,000 rants (and a few raves) on the blog about the changes are summarized in the following main pain points:

User Interface and Navigation - (that’s geek speak for how the software looks and works for the user) was totally turned on its head.  This far and away seemed to be the biggest issue.  Long-time QBO users, in particular, were irate about the changes that were made and found it extremely difficult finding features that existed before.  Although it seemed Intuit was doing their best to try to help the users by pointing them to helpful tips and training videos, the customers were incredibly irritated by the fact that they had to be retrained on a product they’d been using for a decade.

Check Printing - a bunch of people complained about having to spend 45 minutes to two hours trying to figure out how to print a check.   

Performance - there was a lot of negative feedback about the poor performance in general.  Beyond the issues of changes to the user interface, it seems a fair amount of functionality actually disappeared from the legacy product completely.  

I personally didn’t have the patience to read through all 944 comments, but I got through a lot of them, and here is my take on the whole situation.

READY FOR CHANGE

I think most importantly, many of the users weren’t ready for the change.  It’s not like the users went out and actively bought a new piece of software and played with it over the weekend when they had time.  Although Intuit did warn them quite a few times via email and on the console, nevertheless, many users claimed that they logged in to process payroll and were blindsided with a completely new, unfamiliar, non-intuitive system, and they had no way to get back to the old system.

I was personally ok with the changes, but changing software doesn't typically throw me.  Intuit happened to change a few of the things that were really annoying me, and with just one customer left on QBO, I didn’t need many of the features that people were complaining about the most (like check writing or timesheets).

Even so, tons of people asked how to get “the old QBO back,” and here was Intuit’s statement about the issue to a customer:

‘Hi Kristi,

We’re really sorry to hear you’re having trouble. That’s the last thing we want. Unfortunately, we actually can’t let folks stick around on the older version of QuickBooks. In mid-July, Google Chrome and Mozilla Firefox are making significant changes to their Web browsers, removing the ability for older web-based applications to display popups. As you know, the old QuickBooks has a large number of popups – more than 600. This change will break the old QuickBooks rendering it unusable.

The new QuickBooks uses modern technology and will not be affected by the change in web browsers. This is the main reason we are updating customers to the new QuickBooks without the option to return or stay.

As part of this acceleration, we are working very hard to address customer feedback we’ve received so far about where the new QuickBooks can be improved and are actively soliciting your input. We’d love to hear how we can improve search and banking. The best place to share that is by clicking “feedback” under the gear menu in the top-right corner of the product.

Best,

John”

GRADUAL IMPROVEMENTS

Now, don’t get me wrong, one of the best things about cloud accounting technology is that everyone is on the latest and (arguably) greatest version, and you don’t have to deal with installing updates and the like.  However… it’s probably best to introduce small, gradual improvements for your users rather than dropping an entirely new system on them all at once.  I think the subsequent fallout from that was inevitable regardless of how many warnings they sent out.

Anyone who knows me knows I’m a big fan of Xero.  All I could think about when reading these QBO blog comments was that this kind of software update/upgrade would never happen with Xero.  Their focus is completely on the design of the product - not necessarily on the graphic design of the product (although I think that’s good too) but rather on how the software works for the people who use it.  It’s smart and makes sense.  

And not only that, Xero started with a strong, stable product with good speed and performance and has been building features from there.  Improvements are rolled out every several weeks.  They seem to “get” that cloud technology is not the same as desktop technology.  It’s not like the days of old when you would lock programmers in a room for several months out of the year to create a whole new updated product.  You have to have foresight to see what needs to be done over both the long and short-term and make those changes today (and gradually, over time).  

It’s much easier for users to absorb one new feature at a time rather than slapping down a whole new system quickly because they finally realized that the one they built over a decade ago wasn’t going to work anymore.  If they’ve been around this long, they had a long time to make any necessary changes along the way.  I’m just sayin’.

I do hear people complain about Xero not having a few necessary features (which I am also anxiously awaiting like job costing and improved class functionality), but what they do have works, and it works well.

On the QBO thread, I saw lots of comments about how the people programming the new QBO weren’t the people who ever had to use QBO.  (I also saw a few comments about how the same people who designed the Obama healthcare website designed this software.)  Regardless of your political affiliation, those are some pretty strong sentiments. 

INTEGRATIONS

One of QuickBooks’ most highly touted selling points is its ability to integrate with add-ons, but this comment made me laugh:

"The banking downloads are atrocious. Integration with Stripe was a joke; so bad in fact, that I had to kill it and go back to entering manually. PayPal integration also does not work properly. For MC/Visa, Stripe and PayPal transactions, it would help immeasurably if QBO could discern from the data provided, the amount of the original charge, discount fee and net deposit. Having to edit every transaction does not save me any time."

I haven’t seen any of these integration problems with Xero.  Xero is just so much better with most integrations and have much better and more stable performance.

WHAT CHOICE DO THEY HAVE?

The thing that killed me the most about these blog comments is that although so many people were threatening to leave QBO, it was obvious to me that nobody knew where else they could go.  

Some wanted to go back to the Desktop version (since so many people think QuickBooks is the only small business software that exists), and I can’t really blame them for that if that’s all they know.  The functionality and features are way better on the Desktop version than the cloud version, but I feel like they shouldn’t abandon cloud accounting technology just because they are frustrated with Intuit’s version of it. 

There was one comment from a QuickBooks trainer which struck a chord with me:

“Everyone is threatening to move, but the competing online products have their own set of challenges or else they are way more expensive than QBO.”

It gave me the distinct impression that she hadn’t fully done her research.    

For most small businesses, Xero is an excellent remedy for people who hate QuickBooks.  It’s competitively priced, it’s easy to use, and it has a lot of efficiencies that QBO definitely doesn’t have.  You can invite as many people as you want to collaborate on the software (bookkeepers, business owners, tax advisors, Board of Directors), and there are no per user fees (unlike QBO who charges you for each additional user after five).  You can also customize your accounting solution by integrating with over 300 other products (significantly more than QBO which has around 50 or 60).  And it's not just the larger number of integrations, but as I mentioned before, it's the fact that Xero does these integrations well.  Just try Xero's integration with Square and then test QBO's integration with Square, and you'll see what I mean.   

There also might be other viable cloud solutions for you if you’re in the right situation (like if you don’t need a balance sheet), and all are competitively priced.  

You just need to look around and realize that QuickBooks is no longer the only game in town. 


Comments

Boomer

06/23/2014 8:38am

At least you admit you are Xero biased.


Kaydee Peterson

06/23/2014 12:35pm

Interesting article, I have heard this from many people even though I wholehearted disagree that the Harmony grudges are Intuits fault. We all had the warning and it is our responsibility to stay informed on the platforms we are using. I too was VERY frustrated with the new navigation in QBO Harmony, but now that I have it figured out we are onboarding people left and right. I love Xero as well and I think that both products have their own 'best practices and applications', it is up to us as advisors to know the products and choose the right one for the client.

'Running away' from the Harmony platform to other products is a poor business decision for any accounting company or consultant. In my opinion we all need to be educated on and servicing all platforms to ensure the success of our clients, rather than holding a grudge against a company and limiting our options.

(as a side not I think that every square sync is terrible thus far, regardless of the product)

Patti Scharf

06/23/2014 1:39pm

Hi Kaydee - thanks for reading my blog and taking the time to respond.

I want to add another perspective to your comment that “we all need to be educated on and servicing all platforms to ensure the success of our clients.” I do think that if a company is trying to hold themselves out as an expert on every platform out there… Sage, QuickBooks, Xero, MYOB, Intaact, Kashoo, Freshbooks, Wave… with new ones being added every day, you’ll quickly learn that you’re doing a disservice to yourself as well as your clients.

I would agree that someone shouldn't hold a grudge against a company and limit their options. However, I *would* say that it's smart to look at the tools available and only choose the ones that best meet their customers’ needs. We still have a couple of clients on Intuit products (until Xero figures out how to rock out the job costing piece) because they are the tools that work best right now.

The point of my article was to hopefully bring awareness that, contrary to what most of small business owners believe, the only software choices are no longer just QuickBooks Desktop or QuickBooks Online. 

There are other stellar options out there, and like you said, “it is up to us as advisors to know the products and choose the right one for the client.” Small businesses need to know their options before they can make educated decisions.

Kaydee Peterson

06/23/2014 1:52pm

I do agree that we cannot be complete experts in everything, but we do need to know enough to be able to appreciate every product for its ideal application. We do not support all platforms but we are sure to at least be open to them all and know another expert to supplement where we lack. The article implies that people are jumping from QBO to Xero because they were forced onto the Harmony platform, so my point is that they need to suck it up and figure it out ;-)

Thank you for clarification on what you were intending to say in your article as I had initially read it as a bad 'break up' letter for QBO Harmony :-D

Patti Scharf

06/23/2014 2:03pm

LOL - gotcha. 

Nope. I was just screaming at my computer when reading through the comments from all the upset users who were deciding to go back to desktop just because they didn't like QBO. I didn't want them to abandon the cloud completely just because they didn't know there were any alternatives. And I like Xero. :o)


L.Andrew

06/27/2014 2:46pm

Patti, you're micro focusing on a small part of "what's going on over in the world of Intuit" and a thread with a rightful enormous amount of complaints. 2 - 3 years from now no one will care about that thread. What's going on in the world of Intuit (in the past year) is acquiring companies (FullSlate, Docstoc, Level Up Analytics, Lettuce, Check, on and on) at an enormous pace. Rod Drury himself expressed envy if not jealously online in a tweet when Intuit acquired Invitbox. Parallel'ed with this have been swift changes in fostering 3rd party App development.

QBO is in its infancy and Intuit is ascending a learning curve as it amasses the components to build tremendous ecosystem around QBO. I know of 3 Xero add-on app develolpers in Australia that are sync'ing their add-on apps to QBO, they'll all be at QB Connect. Why? That's where the market and money is. 

Sure, you can take a snap shot today of QBO, it needs a lot of improvement. It's coming...in 2-3 years I assure you there will be more add-on Apps for QBO than Xero. I can also guarantee you Xero will still not be a profitable company in 2-5 years, never has been since it's founding in 2006 and there literally is no plan in place on how or when Xero might profit. Rod Drury pushed back his hope for Xero to finally be profitable from 2017 to 2018, and that's a huge maybe. Mr. Drury says he needs 1,000,000 customers to be profitable, he's got a little over 200,000 today (only 18,000 in the U.S.). Meanwhile there are between 500,000 - 600,000 QBO users today in the U.S. and Intuit expects to be over the 1,000,000 next year. 

I'm only pointing out you're focusing on a momentary snapshot in time, while not standing back and looking at what Intuit is amassing, the sheer numbers attracting 3rd party add-on development, the 'catch up' ball Intuit is playing at a rabid pace. You're also not talking about Xero's metrics that make no sense whatsoever (no profits, huge losses, ridiculous market cap, etc) to anyone and hox Xero is a company that is commonly referred to as a "dot. bomb" in New Zealand. Xero's actually in trouble - as their is no plan or path to support their market cap. 

So sure, if all that matters is how the software works today, Xero wins hands down. Tomorrow? I'm not sure Xero will be in business in 2-3 years...it could all easily fall apart if investors come to their senses. It's not like the H&R Block alliance is a plus, is it? Lol. 

The dirty little secret is no one is making money with Xero, not Xero, not the 300+ add on developers, everyone's kind of drinking the kool-aid and it appears you're in fact making a toast. Bravo!

Patti Scharf

06/27/2014 4:16pm

Thanks for reading my blog and sharing your opinions, L. 

Obviously, you will either be proved right or wrong with the passage of time, but I wanted to respond to few things.

1) “QBO is in its infancy and Intuit is ascending a learning curve as it amasses the components to build tremendous ecosystem around QBO.”

I don’t really understand why you’re considering QBO to be in its infancy when it was launched 13 years ago. With Intuit as large as it is, I would argue that it’s going to be a lot easier for Xero to adapt and improve its product with $200MM in the bank and a small, gifted team and 300+ apps improving the product at lightning speed. 

2) “I know of 3 Xero add-on app develolpers in Australia that are sync'ing their add-on apps to QBO, they'll all be at QB Connect. Why? That's where the market and money is.”

I’m not really sure what this proves except that there are developers expanding their capabilities and client base. Sounds like good business sense to me. But they integrated with Xero first.

3) “Sure, you can take a snap shot today of QBO, it needs a lot of improvement. It's coming...in 2-3 years I assure you there will be more add-on Apps for QBO than Xero.”

Umm… not with their current, limited API. We’ll have to agree to disagree on this one.

4) “I can also guarantee you Xero will still not be a profitable company in 2-5 years, never has been since it's founding in 2006 and there literally is no plan in place on how or when Xero might profit.” 

You can guarantee that? Wow.

Here’s my opinion. As soon as the world figures out that there’s an online alternative to QuickBooks, they’ll try Xero. When they try Xero (certainly as it is today and in the near future, compared to QBO), they’ll jump ship. Xero is going to take a big bite out of Intuit’s market share. Although Xero has been in existence since 2006, its only been in the US for about two years, and it’s already growing exponentially. It’s also the market leader in New Zealand and has a sizeable presence in the UK and Australia. The US holds a wide open market with clients ripe for the picking since Xero is (in my opinion) better than anything out there. Xero isn’t going away, and profits will come with time. They have tons of money to invest and some of the sharpest minds out there bringing their product to market.

The “growth” of 400,000 users for QuickBooks Online will be coming from cannibalizing QuickBooks Desktop users who want to move to the cloud and don’t know about any other alternatives.

5) “I'm only pointing out you're focusing on a momentary snapshot in time, while not standing back and looking at what Intuit is amassing, the sheer numbers attracting 3rd party add-on development, the 'catch up' ball Intuit is playing at a rabid pace.”

“Catch up” ball? If they are such a strong market leader, why do they need to be playing catch up? I’m just sayin’.

6) “So sure, if all that matters is how the software works today, Xero wins hands down.”

Thanks for that. I think so too.

7) “Tomorrow? I'm not sure Xero will be in business in 2-3 years...it could all easily fall apart if investors come to their senses. It's not like the H&R Block alliance is a plus, is it?”

With $200MM in the bank, a booming customer base, 300+ app developers who believe in the product, and a devoted fan base, I’m fairly certain it’ll come together. H&R Block will just help give them needed marketing exposure. So that actually helps too.

8) “The dirty little secret is no one is making money with Xero, not Xero, not the 300+ add on developers, everyone's kind of drinking the kool-aid and it appears you're in fact making a toast. Bravo!”

All the accountants I know who are using Xero are making money. I’m fairly confident the 300+ add on developers are making money (otherwise, why bother). Xero may not be profitable yet, but with an inferior product, Intuit is certainly going to help them get there.

If you’re right and I’m wrong, ring me up in five years, and I’ll buy you a beer to complete the toast.


Mike Schinkel

06/28/2014 4:03pm

I started using QuickBooks for my business about the time that QB was first released. And over the years the more I used QB the more I felt that Intuit had contempt for the needs of it's customers and was only interested in doing that which locked customers into it's closed garden ecosystem. 

And doing my research on QBO it became clear to me that although time has passed the attitude at Intuit towards locking in customers vs. meeting customer needs has not changed. 

So when Xero was released I embraced it with a passion. Not because I love Xero; I don't -- Xero ignores customer needs too -- but when compared to Intuit Xero is the lesser of two evils.

Patti Scharf

06/29/2014 8:39am

Thank you for your thoughts. 

I share your experience of Intuit, even as an Advanced Certified QB ProAdvisor (expired). However - companies can change, and maybe they’ll start stepping up their support game now that they are no longer a monopoly. 

I can’t speak to the issues you’ve had with Xero, but I haven’t had the same experience for whatever reason.


Bob

06/28/2014 9:16am

Patti,
Nice response to L Andrew's rambling diatribe. Good insight from Andrew on what they're thinking inside the hallowed halls in Mountain View. #threatened

Patti Scharf

06/29/2014 8:37am

Thanks, I try. :o)


Paul MacNeill

06/28/2014 11:11pm

Patti, 

It's great to see so many passionate views about whether it should be QBO or Xero. The reality is that it can be either platform- and it should be based on what the client needs. We have used Xero for a number of years, and have 5 entities which all have a Xero company (organization). Our cost for accounting software has quadrupled to what we were paying before, but that said our administration costs have halved, efficiencies are up and the outcomes are greater financial visibility.

There's a lot of discussion around about the focus of Xero on the accounting market (specifically to accounting service providers) and less focus on developing the multitude of functions required to compete with QBO or other online applications (Net Suite, Sassu, jCurve, iBiz). With their strategy to be the ‘accounting platform’ which frees them to be nimble and focus on the key areas which add strategic value to their partner base.

As an Xero add-on developer, we've found the integration to Xero to be painless, well documented, and easy to implement. The support has been, to say the least, exemplary. As a consumer of the product the customer support has also been excellent, with scores of documentation online to assist with the many questions that come from generally using the software. We’ve only had to contact support for a bone fide issue on a handful of occasions and they were promptly attended to.

Wise-Sync is a nice market add-on (integration to ConnectWise with around 5000 partners globally), the correlation to Xero leaves us with a very small market to slice up with other integrators. And as part of our strategy to deliver the best accounting integration to ConnectWise - it was a no-brainer for us to look to integrate with QBO.

So that's where the challenge begins. Although the experience in sign-up and on-boarding has been well oiled, the API leaves a lot to be desired. It's like the QBO API was first built to support the QBD platform, with a number of deprecated methods. There's a number of strange limitations, including invoice reference character limits, and strange requirements to create entities (such as invoices), which cannot be searched using ID's provided when the record is created.

What is clear though is that Intuits' focus is to port the QBD user base to QBO so that they can move their focus on a more agile development. What is clear is that many 'Old School' users may quickly become disenfranchised by the lack of control over updates and releases, as there can only ever be one version. 

My first impression of the QBO interface is that it’s a little confusing, but like all software (especially if you have been using it for 10 years) can be overcome with actually rolling up your sleeves and figuring it out. What is clearly evident in the Xero interface is that it was first designed for consumers, then accountants – as the way in which they have approached bank reconciliation is as we describe it as ‘Upside Down Accounting’. As a business owner, not once had I completed a bank-reconcilaition; that’s what we needed bookkeeper for. With 7 bank accounts, 7 credit cards we receive 48 pages of statements every month – over 1500 transactions lines to be reconciled. It was a task that could take anywhere from 2 – 4 weeks after the statement arrival to complete. That process is now completed daily in a matter of minutes, normally before my eggs are poached in the morning.

As for the call that Xero is unlikely to be around in a couple of years, I’d be betting on it being due to a private equity acquisition; but the price-tag is going to be hefty. They have just passed $100M in ARR, and that makes for a good FME. I can only wish that I brought the IPO (ASX. XRO) stock at $2 a share, even after the stock corrected in April to more realistic values, it’s still a pretty good ROI.

I for one am excited to see what comes of the competitive nature of both of these companies.


Paul MacNeill
Virage IT | Managing Director 
Wise-Sync | Co-Founder

Patti Scharf

06/29/2014 8:41am

Paul - Thanks for responding - it’s great to have insight into the experience from the developer’s side of things. 

When you say it was first designed for consumers, then accountants, I couldn’t agree more. However, as an accountant, I want to add that their system is great for accountants as well for the very same reason that it’s good for consumers… because you’re reconciling on a daily basis instead of at the end of the month, the month-end close is so much more efficient. It’s more like a quick double-check instead of a massive investigatory process on a million accounts at once.

I feel like QB (and most other accounting packages) came out of the paper system. They started with green ledger paper and a pencil, then moved on to Excel (or rather, Lotus 1-2-3 ;o)), then accounting packages were formed to create an actual database in order to efficiently handle how the paper system was working. Xero kind of threw all that out and said, ok… we have technology, we have bank feeds… how should this work in this century? So everything starts at the bank, not at the checkbook. You know what money is *actually* flowing from place to place, so that’s where it starts, and they created an intelligent system which can identify which transactions are coded like this, and which are coded like that so that reconciling transactions becomes as easy as clicking a button. They’ve most definitely turned things on their head.

I’m also excited to see what happens in the next few years. It’ll be fun to watch no matter the outcome, and I think the winners will be the consumers, accountants, and developers in any case.

Paul MacNeill

07/10/2014 9:08pm

Hi Patty,

We've been working on our integration with QBO over the last couple of weeks, and certainly have found that it is a more powerful product than Xero. By more powerful, I mean - more options. It is however more complex to setup (in comparison) and quite convoluted in some areas which baffles us in some aspects. Simple things like being able to create invoices with duplicate Invoice Numbers....Not sure if this is a bug?

We've run into a real whopping issue, which is just perplexing.

QBO has different regional versions, including one for Australia. The look the same (save some regional wording such as GST instead of Sales Tax).

In porting our integration to QBO from Xero (native), we've had to scour the knowledge base to work out what limits relate to QBO which are deprecated from the QBD API integration, but that's another rant.

For our US partners, they are without one function that is PRESENT FOR AUSTRALIAN QBO partners, even though they don't actually need it.

Sales Tax applied cannot be applied at an Invoice Line level.

For the US, Tax can only be applied on an Invoice Level (the whole shebang), not on an Item Level (each line taxed separately). So if you have special tax rates such as Connecticut, then you are limited to creating different invoices for different tax rates services... OH THE PAIN.

So to be clear, why they have Line Level tax option for Australia is beyond be, as we have a single tax rate (10%) and it's either taxable or not (suited to the way that the US system is implemented for QBO). Maybe this is something that will appear in the US version – SOON HOPEFULLY!

So we now need to turn off features which are natively available in Xero.


Carleton W Moten

09/09/2014 2:04pm

Do you have any experience with Wave Accounting's online products?

Patti Scharf

09/09/2014 2:17pm

Hi Carleton,

I don't have direct experience with Wave, but it's definitely a player in this market. 

Our colleague, Greg Lam, did a two-part review of the product for The Sleeter Group's blog, QuickBooks and Beyond. You might want to check them out:

http://www.sleeter.com/blog/2014/06/wave-accounting-software-video-review-part-1/

http://www.sleeter.com/blog/2014/06/wave-accounting-software-video-review-part-2/

Thanks,

Patti