It was interesting to observe the bookkeepers and accountants at February’s round of Xero Roadshows.

I’ve been to a number of roadshows and Xerocons, but this year I was there as an exhibitor, and got to talk to a lot of the attendees. And it didn’t take long to discover they fell into one of three main groups:

  • Newbies just starting the journey
  • Those using Xero with their clients
  • Those with practices well advanced on the Cloud journey – either using the Practice Manager platform or about to make the transition

However, the majority of people in all three categories are still overwhelmed by the number of add-on partners and the role they play in the Xero ecosystem. It was just as confusing for me when I attended my first Xerocon. I can still remember wandering around, looking at all the options, but not sure where to even start.

As time went on we realised that these add on partners fell into several categories. And once we’d identified the structure and where they fitted in, it was quite easy to work out which add-ons we wanted to learn about for our practice, and which were more suited to our clients’ needs.

Here are the three categories we came up with.

1. Add ons for accounting practices

Some add ons are designed to improve the efficiency of an accounting practice itself by streamlining operations such as:

  • marketing and onboarding new clients
  • processing the clients’ work
  • providing reports and advice for the client to improve their business.

Some of the add ons we like in this category include:

  • Practice Ignition.  A Xero Accounting Partner of the Year designed this add on to simplify, automate and alleviate the tasks involved in preparing proposals and engagement letters for clients. With the ability to do bulk re-engagements, this add on saves hours in non-productive time spent preparing proposals and re-engaging clients each year.
  • Zerobooks. We designed this to remove data processing from the office, so that accountants can focus on servicing clients and providing value-adding advice for their clients’ businesses. This means fewer write-offs, improved productivity and a higher average hourly rate.
  • Document management systems, such as those designed by HubOne. These are based on their own experiences in an accounting firm.
  • Reporting packs such as Crunchboards and Fathom. These allow accounting practices to develop a range of reports on which they can base and present their advice. They have easy to understand formats that the clients can grasp.

In most cases, the services these add ons and partners have developed alleviate pain points identified from the founders’ own experiences as business owners and accounting professionals. Used in combination, they can help deliver efficiencies and productivity improvement within an accounting practice, by removing unproductive processes.

2. Add-ons for all clients

Often called the ‘horizontals’, these add-ons have potential applications for all clients.

By far the most popular add-on in this space is Receipt Bank. (It’s the backbone of our own bookkeeping services.) It removes the data processing functions for accounts payable, giving small businesses more time to build their business. The developers have won the Add-on Partner of the Year award for the past three years in the UK, and the past 2 years here in Australia.

A new kid on the block is exsalerate. I only got a brief look at it during the roadshow, but I’ll definitely be looking at it again soon. It’s a simple-to-use CRM that integrates with Xero Practice Manager (WorkflowMax) / Xero and Mailchimp, and should meet the CRM needs for both clients and accounting firms. I expect to hear a lot more about it as time goes on.

Another all purpose add-on we like is Chaser. This simple but flexible partner automates following up debtors by sending automated email reminders to the clients. From our own experience, these reminders have reduced the number of debtor days and improved cash flows by more than 20%, for both our clients and our own business.

3. Add ons for specific clients

These add ons are designed for specific purposes or client types, and are usually industry focussed. Also known as the ‘verticals’, they have specific functions and a narrower target market.

This crowded space can seem quite daunting. But we’ve found some add ons in this space that we like, such as:

  • Deputy and Tanda for staff rostering and managing payroll
  • Cin7, Vend and Kounta for retail and hospitality clients
  • Smartm8 for managing a mobile workforce, in particular tradies
  • Re-leased for managing commercial properties
  • Sharesight for keeping tabs on investor clients’ share portfolios.
  • WorkflowMmax for professional services businesses

This space is quite complex, and so we’ve developed relationships with Cloud Integrators such as Tradiepad, Rype and SMB Consultants to keep up to date with the latest releases. It means we can call on their high level of expertise and up to date knowledge when advising and implementing business platforms for our clients.

Unless you’re going to develop your own advisory services for a specific vertical (industry), we recommend getting support from a cloud integrator for these front end apps.

Summing it up

By adopting this classification approach, we can now quickly identify the add-on partners that better meet the needs of our clients, whether they’re accounting firms or business owners.

So next time you’re trying to navigate the eco-system for suitable add-on partners, ask yourself these questions:

  • Am I looking for this partner to help my accounting practice, or a client?
  • Is the task industry specific, or more general?

Once you’ve started analysing your needs, it’ll be much easier to deliver the right solution for your client or practice.

And that’ll make everyone happy.