Xero have announced changes to their pricing and their product line-up, which will take effect from 12^th September 2024.

Xero has explained the changes as a simplification of the current subscription options, with fewer add-ons, as more key features are going to be included in the existing plans. This includes payroll and expenses, which have previously been extras. 

From September, the new Xero packages will be as follows:

• Xero Ignite: Accounting basics for businesses starting out 
• Xero Grow: Accounting tools for the self-employed and growing businesses 
• Xero Comprehensive: Streamlined accounting and payroll for businesses with employees 
• Xero Ultimate: Accounting, payroll and forecasting tools to help businesses scale for future growth 

The current Starter, Standard and Premium plans will no longer be sold after this point.

How will your subscription be affected?

Xero have stated very clearly that for the majority of customers, the changes will mean more features for the same or lower price when they move to a new plan. We’ll be taking a look at this over the coming weeks to see how accurate it is!

Subscribers will be moved to the new Xero packages in phases, based on their current plan, and any existing add-ons they may be using.

Xero will contact subscribers to ensure they have a minimum of sixty days’ notice before they are moved to a new plan, and will include any necessary information about the plan they will be moved to.

All subscribers will be moved to the new plans by March 2025, so this process will take time.

If you’d prefer to move to one of the new plans before Xero impose the change, you can do so at any point after the 12^th September. If you do move to a new plan, the old plan will no longer be available.

What should you consider before moving?

We’ve already had a couple of conversations with clients who are considering moving from a current Standard subscription (currently £30+VAT) to the new Ignite option (£16+VAT) rather than moving to the new Grow Subscription (£33+VAT).

There are limits to the volume of invoices that can be sent each month on the Ignite option as there are with the current Starter pack, so you’ll need to be careful you don’t cause yourself future issues if you do make a decision to down-grade.

What features are included in the new packages?

You can compare the new Xero plans here.

The existing pricing and features is shown here, although this is currently promoting an offer for new subscribers, so you need to be careful to compare the top line prices, shown here as ‘usually £X’ just under the plan name. 

Changes to current pricing plans

Alongside the announcement of the new plans, the pricing for the current plans is increasing from the same date, the 12^th September. 

These prices will increase as follows:

• Starter plan increasing to £16 per month
• Standard plan increasing to £33 per month
• Premium plan increasing to £47 per month
• Ultimate plan increasing to £59 per month 

So, once you take account of the price increases in the exiting packages, the pricing of the new packages has minimal impact, given the new Ignite, Grow, Comprehensive and Ultimate line up at exactly the same price points.

Check your add-ons before you make a decision!

Despite the very similar price points for the new packages, you do need to consider your best option, especially if you currently use any of the affected add-ones, being:

• Xero Payroll

• Xero expenses

• Multicurrency

• Xero Analytics Plus

• Bill payments

Whilst historically you could add payroll for more than one person, for example, to Standard subscriptions, and Analytics Plus as well, you can’t do that any longer. Both of these options are now only available on either Comprehensive (up to five people on payroll) or Ultimate (up to ten people on payroll with a charge of £1 per month for each extra person). 

Check the add-ons that you currently use to ensure you’re not going to lose access if you don’t move to one of the higher packages. The data will still be there if you lose access, but you will need to upgrade to access it again.

As ever, if you’re concerned about the changes, or want to discuss the most suitable package to move to for your business, please get in touch. There’s still time to consider your options before the changes take effect.

You can see their blog on the new Xero packages here.

And this is a link to the pdf on the subject.

Compare the old plans with the new alternatives here.