Xero earlier announced changes to their pricing and their product line-up, which were due to take effect from 12^th September 2024. The changes were one of the major subjects of conversation at XeroCon 2024 that we attended in June. This plan has now changed, so we’ve outlined why and what will now happen below for you.

The background…

Xero explained the planned changes as a simplification of the previous 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 were to 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 previous Starter, Standard and Premium plans will no longer be sold after this point.

The major issue was that the changes would result in some subscribers being forced to pay more for their subscriptions, and this is where the new changes will take effect.

What’s new?

Xero advised recently that they’ve changed the timeline for subscribers whose costs will increase as a result of the move to the new packages.

Rather than sticking to the imposed timeline, instead, they‘ll notify us of the package they think affected clients should move to in late September, as originally planned. At that point we can change that recommendation, but, because your monthly charge will increase, they won’t move you until September 2025.

Anyone whose charge stays the same or reduces will still move, as previously advised, in February 2025.

What has this changed?

We gather Xero have listened to the feedback they’ve had and modified their approach accordingly.

There was a lot of concern amongst the accountants we spoke to at XeroCon earlier in the year, and Xero were, we think, unprepared for that. They had to move their presentations around the new packages at the event to larger capacity rooms which rather caught them out, and lots of their team had multiple conversations around the subject, and in particular the fact that they were forcing some subscribers to pay more, which felt slightly like an underhand move. 

What have Xero said?

Xero’s latest blog on the subject includes the following:

• For the majority of customers whose subscription plan will include the same or more features for either the same or lower price, we’ll move you in February 2025.
• For customers that will see a price increase as a result of the new subscription plan that we’re migrating you to, we’ll delay moving you until September 2025.
  We recognise for some customers this may be a significant price increase when moved by Xero to a new plan, and in some scenarios we’ll offer discounted pricing. We’ll share more on this with eligible customers and partners in the email we’ll send you in late September.

This means Xero won’t migrate some customers to the new plans by March 2025 as originally communicated.

So, what’s next for you?

We’ll email clients in late September 2024, with the details of which plan Xero anticipate moving you to, and when.  

To determine which plan you’ll be moved to, we’ll look at your current plan – including any add-ons you’ve been using – and your recent feature usage (that is, Xero Expenses and / or Xero Payroll).

You can stay on your current plan until Xero moves you, or you can choose to move once the new plans launch on 12th September 2024.

Why it may be best to wait…

If you choose to move before Xero move you, you won’t be included in Xero’s migration.

They have said that they’ll offer discounted pricing in some scenarios where there may be what they’re calling ‘significant pricing impact’. At this stage we don’t know what that level needs to be to qualify, but we’d recommend waiting until you’ve received email confirmation from Xero in September on how the migration applies to you before making any decision about moving.

It seems sensible to wait and see if you will qualify for a discount!

Xero have been very clear, that throughout this process, subscribers will have the choice to choose a different plan to the one they select for you. You’ll also be able to change plans after Xero moves you if you decide another plan better meets your needs.

What will happen next?

If we hold your subscription, Xero will email us about your change of packages in late September. We’ll of course pass that news on to you and discuss with you which package may be most suitable.

If you hold your own subscription, Xero will communicate directly with you. We’re happy to chat things through with you if that’d be helpful, but if you’re comfortable with their recommendation, we don’t need to be involved and you can continue to deal with them direct.

As always, if you have any questions about Xero, your subscription or the move process, please get in touch, but we’ll keep you posted as or when we hear any more.