Xero slashes discount for second companies to 15 percent

Takes effect on 15 September.

Cloud accounting vendor Xero has announced it would cut the discount given to users who bought a second business subscription to 15 percent from 25 percent starting 15 September.

The annual subscription price for two companies on the medium plan would rise to $1087.80 from $1029.

“We have not changed our plan prices since we launched in 2007. In that time we have added and continue to add more and more great features and functionality to Xero at no extra charge,” a Xero spokesperson told BoxFreeIT by email.

“We have announced a partner program for the accountant channel that goes live on October 1 globally. We need to keep direct discounts aligned with partner margins to prevent channel conflict issues.”

The change to the second-company discount only affected new customers. Businesses which bought a second subscription before 15 September would keep receiving a 25 percent discount.

“This change to discount for multiple organisations doesn’t impact our plan prices. Existing direct customers with more than one organisation will continue to receive the 25 percent discount to their total subscription,” the Xero spokesperson said.

“Today’s communication is to inform customers who have one organisation who might be considering adding more, the opportunity to also lock a 25 percent discount before the change on 15 September.”

Businesses often registered several entities such as trusts and trading companies to protect intellectual property or reduce exposure to legal and tax liabilities.
Desktop accounting software often included up to five company files for the price of one subscription and Xero had faced criticism from customers who resented having to pay for separate subscription for each licence.

“That’s one big thing we have with clients. They say they don’t want to have three subscriptions (with Xero) because they have three entities,” Xero accounting partner Trevor Schoenmaekers of Hansens Accounting told BoxFreeIT earlier this year.

However, accounting software vendors appeared to be moving to one file per licence models in preparation for their cloud software. Australia’s largest accounting software vendor, MYOB, recently stopped selling five company files per licence and told partners that new customers on its AccountRight flagship software would receive one company file for every licence (see point 4).  

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