#Xerocon San Diego: Xero and Stripe Join Forces

Blake and David are reunited again in San Diego at the end of Day 1 of Xerocon! David wonders if accountants and bookkeepers are getting fed up with "fetching," and Blake shares the biggest news stories from Xerocon so far, including Xero Tax Mapper as well as partnerships with Stripe and PwC.


Show Notes

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Blake Oliver: Welcome [00:01:00] to The Cloud Accounting Podcast. I'm Blake Oliver-.
David Leary: And I'm David Leary sitting two feet away from Blake. We can touch. Reach out your hand-.
Blake Oliver: Finally. Oh, the magic.
David Leary: It's amazing. So, instead of being me in the closet, Blake's in my hotel room.
Blake Oliver: Yeah, at the Hard Rock, in San-
David Leary: Hard Rock Cafe ... Cafe ... Not Cafe. Hotel. 
Blake Oliver: Hard Rock Hotel in San Diego, and we have the San Diego Convention Center. We can see it out the window where Xerocon happened today.
David Leary: You were at Xerocon today? 
Blake Oliver: Yeah.
David Leary: Five hours ago, I think I was still in Salt Lake City at Scaling New Heights. 
Blake Oliver: Yeah.
David Leary: Got on a plane, came here, changed [00:01:30] shirts, went to dinner, and then we came here to record another episode of what happened at these two conferences.
Blake Oliver: Yeah, it was a busy day at Xerocon. I'll fill you in, David; let you know all the details.
David Leary: Not a lot of news came out of Scaling New Heights today. Two small things. One was an observation I made. 
Blake Oliver: Okay. 
David Leary: Towards the end of the day, I was actually at the airport trying to watch a Facebook Live feed. Rich Preece, and Ariege did an interview. Joe Woodard moderated it, but it was all audience questions. Most questions were QuickBooks Live. I interviewed Rich Preece [00:02:00] yesterday, which we have to get that episode edited and put out there ... 
Blake Oliver: Mm-hmm. 
David Leary: There wasn't a lot in that that he didn't already say, so if you missed the Facebook Live video, you could just tune into the podcast episode, when we drop that. That was the only kinda newsy thing that happened, but I did make an observation, in general.
Blake Oliver: Mm-hmm. 
David Leary: People are starting to get frustrated with fetching.
Blake Oliver: Fetching. 
David Leary: Fetching.
Blake Oliver: What do you mean?
David Leary: A lot of accountants and bookkeepers, you have your clients, right? When you're trying to fetch things, because of the two-factor authentication ... Banks are changing password procedures ... You [00:02:30] kind of start to feel incompetent, when you go to your small business owner, like, "Oh, this broke again. I need your password. Can you log in? I need this thing ..." It's a process that's not in control.
Blake Oliver: Right.
David Leary: They're starting to be like, "It's better just to get them to get the paper bank statements, and just- 'Hey, give me the paper bank statements' and I'll scan them, and do whatever I need to do with them, once I scan them, because I can control the paper process.".
Blake Oliver: What's the solution to this?
David Leary: I don't know what the solution is.
Blake Oliver: Oh, it's just general frustration. 
David Leary: It's just they're generally frustrated with fetching. 
Blake Oliver: Yeah, well, I feel like that's [00:03:00] kind of a unique problem to the US, because we have so many banks. If you are a developer, and you're building connections to various banks, you're either doing it yourself; then, as soon as you get to a certain critical mass, they start breaking, and then you are fixing them, and it's constant catch-up. Or, you're using a third-party provider, like a Yodlee, which is what Xero uses to connect to banks-
David Leary: Yodlee, or Plaid. We've talked about Plaid [cross talk]
Blake Oliver: Yeah, Plaid. Then it'll take time for them to fix it, and things will break. It's kind of a uniquely United [00:03:30] States problem that we have here with connections breaking all the time.
David Leary: I think it's an opportunity for banks ... I've said this before. I think Chase is going after- they're doing a 10-year play to win small businesses.
Blake Oliver: Mm-hmm. 
David Leary: Chase lets you invite an accountant or bookkeeper as an admin to your account, so if you need to get a check image, the business owner doesn't have to go contact the bank to do something. You can do that on behalf of the account. It's like admin rights, or you're a power user, or whatever you want to call it, to their bank account. Chase lets you do that. Chase is working with Intuit to [00:04:00] create better bank feeds. Some banks are figuring out that small business is important, and those are the ones that accountants are just going to ... I talked to bookkeepers today that said they move every client to Chase.
Blake Oliver: Because of the ease of use, yeah.
David Leary: Ease of use, convenience. It's reliable when it comes to bank feeds, et cetera, et cetera, et cetera, et cetera. These smaller banks that are not supporting technology well are going to pay in the long run.
Blake Oliver: Yeah. Welcome to San Diego, David. Shall I fill you in on day one of Xerocon? [00:04:30]
David Leary: Yes, because I did not ... On the Twitters, I did not keep track. It was ... Scaling New Heights is busy. The sessions start at 7:00 a.m.
Blake Oliver: People go.
David Leary: It goes all day, and then there's an after-party in the evening. Speaking of after-parties, you and I, different nights ... I was at the Scaling New Heights party in Salt Lake City, and you went to an exciting party here in San Diego. 
Blake Oliver: Yes. I arrived here yesterday afternoon, and I went to the hotel, checked in, dropped [00:05:00] my stuff off, and headed right back to the harbor to get on the Gusto yacht.
David Leary: The Gusto yacht. They own a yacht now?
Blake Oliver: Well, it might've been oversold slightly. It's more of a boat.
David Leary: Okay. 
Blake Oliver: But, yeah, it was the Gusto cruise around the harbor. It was beautiful. A little overcast, a little chilly, but really fun, and great spending time with the folks at Gusto. Went out later to the Practice Ignition party, where I think all of the entire conference was at that Volcano Rabbit bar, here [00:05:30] in-.
David Leary: That does not sound like it ended in a good night at the Volcano Rabbit. 
Blake Oliver: I think it's called Volcano Rabbit, yeah, unless I'm mistaking ... I might not be remembering correctly, but ... Then got up early for Xerocon, for day one. You can you can hear it in my voice. It's a little rough-
David Leary: Yes, yes, yes. 
Blake Oliver: -after a full day, but I did make it to the 9:00 a.m. keynote, so I have some updates for you, David; some new stuff going on with Xero.
David Leary: Just to let the audience know how dedicated we are to you, the listeners - we [00:06:00] had dinner, and we came into the hotel room to record. It is now 11:04 p.m., and we're recording the podcast for you listeners. 
Blake Oliver: Yes. This is dedication right here. Just be thankful you're not reading a press release right now, because I'm gonna give it to you straight, David- 
David Leary: Thank you.
Blake Oliver: -so you don't have to read those press releases. Here's what happened.
David Leary: All right.
Blake Oliver: Xero has announced smarter tools to help accountants and bookkeepers manage their digital practice. The big takeaway from this this announcement - Tax Mapper. Now, US accountants and [00:06:30] bookkeepers will be able to map their accounts to different tax lines on tax forms and export those directly into a format that you can import into your tax software.
David Leary: Instead of, like, now, the workflow would be I have my accounts in my accounting software. I can just export some reports out of Xero [cross talk] 
Blake Oliver: -keep the trial balance.
David Leary: -to a spreadsheet. I mess around with it, then I take that, resave it as CSV, and import that into some sort of tax software, CCH Pro Series.
Blake Oliver: Yes. [00:07:00]
David Leary: I do all that ... I just map them inside of Xero, and then I export the report- 
Blake Oliver: Yeah, and then you export. Theoretically, you will not have to do that intermediate step, which can take a lot of time.
David Leary: Okay. This is going to make all the desktop people happy. QuickBooks Desktop was doing that 15 years ago, so it's good to see ...  It makes sense, though. It makes sense to just- you map that once, and once you have it mapped, you can just push that through. 
Blake Oliver: Yeah, and then, you do it one time, and you can do it every year. It's the same.
David Leary: This means, in theory, if you have clients in Xero, but you're an Intuit ProConnect user, you can have [00:07:30] a more efficient workflow now.
Blake Oliver: Yeah, and I'm interested to talk to Lorilyn Wilson.
David Leary: Oh, from a couple of weeks ago, yep. 
Blake Oliver: Yeah. She was on the podcast talking about her very, very efficient QBO-to-ProConnect workflow. I'm wondering what she thinks about the new Tax Mapper. Would that be enough to get her to make the switch? 
David Leary: That's a good point.
Blake Oliver: Because it saves her hours, and hours, every return.
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Blake Oliver: That was one announcement. The second one, which I am actually even more excited about, and David, you will be excited about, as a payments guy, because you love fintech-
David Leary: Payments guy ...
Blake Oliver: You love payments. You're the- 
David Leary: Actually, speaking of payments, side note- [00:09:00]
Blake Oliver: Yeah? 
David Leary: - you know how we've talked about cash-only places, credit-card-only places? I wound up in a place last night at Salt Lake City that only takes cash-
Blake Oliver: Cash-only. 
David Leary: Cash-only, and it was like a time machine, a little bit. It was cash-only. Then I got the point where I was like, "Do I really want a beer? I don't feel like getting money out of the ATM," and so I just chose water the rest of the night. I thought it was interesting. They have a cigarette machine, like at the old ... Remember when you were a kid, at the bowling alley, the cigarette machines?
Blake Oliver: Yeah.
David Leary: It's cash-only, and it costs $10 for a pack of cigarettes. Somebody'd have to put $10 in quarters to get a pack of cigarettes- 
Blake Oliver: They [00:09:30] didn't take dollars? It was all- 
David Leary: No, it's ... 
Blake Oliver: If you save up your quarters, you can get a pack of cigarettes. Well, in the payment space, some big news from Xero. They have partnered with Stripe. This is not just one of those press-release announcements. There were people from Stripe here at Xerocon today helping out with this announcement. Your Stripe transactions, you will now be able to add your Stripe account as a bank feed in Xero, as a bank account. This is true fintech here, right? [00:10:00]
David Leary: Yes. 
Blake Oliver: It makes sense, because your Stripe account, really, for many businesses, is like a bank account. It carries a balance that gets paid out to you. You're gonna be able to have your Stripe account in Xero as a bank account, and all of those transactions will be imported individually. All of the deposits, all of the fees, just like it were a bank feed. People have been doing this kind of work around, importing their transaction detail into a fake bank account in order to make this work, so this [00:10:30] is fantastic. Now you're going to be able to do automatically, and you'll have all that- all the detail about the Stripe transaction in there. The second thing, which is even more exciting, is auto pay.
David Leary: What does that mean?
Blake Oliver: That means you'll be able to set up and receive recurring payments linked to recurring billing in Xero. Let's say, David, I'm selling you something - accounting services - on a monthly basis for Sombrero Apps. I can set up a recurring invoice in Xero and then automatically charge you every month, inside [00:11:00] of Xero, not having to us an add-on.
David Leary: Okay, so I don't have to go out to Stripe's website, because I know Stripe supports recurring payments, or some subscription-type payments. I don't have to go to some other website to do this. I just put a checkbox, "Charge Blake every month, $35," and going to do that through Stripe, but I have no extra work involved.
Blake Oliver: Yeah, and none of the credit card data is saved in Xero; it's all tokenized in Stripe, so it's all very secure. You, as the client, can go and change that yourself, which is- say, if your credit card expires, you can go update [00:11:30] it. There are plenty of add-ons that solve this challenge for Xero users, but what I think this is really built for is the business owner, and this is Xero's focus on that end-user is that their biggest pain is invoicing and getting paid.
That was clear in some of the stats that Xero shared, when they made this announcement, which is that businesses that do not have a Stripe-integrated payment system in Xero, they [00:12:00] get paid over two weeks slower than businesses that are using integrated Xero and Stripe payments.
David Leary: I think Intuit's had stats similar to that with QuickBooks. If you don't have ACH, or credit cards enabled, and you don't give payment options when you send an invoice, it takes a long time to get paid. 
Blake Oliver: It takes a long time to get paid, and that two weeks of delayed cash flow or more can have a big impact. Most businesses in the United States that fail, it's because of poor cash flow. This [00:12:30] is really a move, I think, to make Xero solve that key pain point for small businesses.
David Leary: It's a big announcement. Stripe's a huge ... I've always said nobody uses Stripe, but everybody uses Stripe, and this is another example of that. People will be using Stripe and not knowing they're using Stripe to send out those invoices.
Blake Oliver: Craig Walker, who was originally wrote the very first version of Xero, he demonstrated, live on stage, some of the cool Stripe features [00:13:00] that they're building in Xero. One of those is a Bluetooth-enabled payment/card reader, so that I can actually accept credit card payments in Xero using a linked ... What do you call those?
David Leary: Terminal?
Blake Oliver: Terminal, yeah. It's like one of those terminals that can take Apple Pay, and stuff like that. I can just tap my card, as a customer, and you, as a Xero user, can just accept that payment using Stripe. Where, formerly, you would have had to use some sort of add-on card reader with your phone. It [00:13:30] wasn't linked to Xero, or anything like that.
David Leary: Did they announce any ... Is there different rates for this versus typical Stripe rates, or other credit-card-processing type rates? 
Blake Oliver: That's interesting, because no, it's ... As far as I know, it's the same standard Stripe rate, which is what? 2.9 percent on all transactions, which brings up an interesting question that was covered in one of the media panels today that I got to attend, which is the challenge of convincing small businesses to actually take credit cards. In a lot [00:14:00] of cases, small businesses in the United States don't want to take credit cards because of those transaction fees. They say, "Well, you know, if I accept a $100 payment, I'm paying close to three bucks to receive that payment."
What we as accountants have to do is help business owners understand that, yes, they're paying a transaction fee, but that the benefits of getting paid faster, and not having to deal with paper checks, and all of the costs - the hidden costs - [00:14:30] associated with paper payments makes it well worth it to accept digital payments and to accept that higher transaction fee.
David Leary: Last night, when I was at that bar, because they didn't take credit cards, they 100-percent lost all my revenue.
Blake Oliver: Right, right. Exactly. If they had sold you one more drink as a result of taking credit card payments-.
David Leary: I might've bought a round for everybody.
Blake Oliver: Yeah, there you go. I mean, you're known to do that, right? [cross talk] Listeners of the podcast should know that if you see David in a bar, he is obligated to buy you a drink.
David Leary: A $100 bar tab, the [00:15:00] bar would've had to pay three dollars in fees. To save that three dollars in fees, I bought zero alcohol, and they got zero revenue.
Blake Oliver: Right. Exactly.
David Leary: They saved their three bucks.
Blake Oliver: Logically, it completely makes sense. Every business should be taking credit card payments, digital payments, but they don't because of this loss aversion. People don't like losing money. They think that when they take a credit card payment, they're losing money. Actually, a surprising number of accounting firms don't take credit cards. I think it's something like half of accounting firms. Don't quote me on that, but [00:15:30] I remember we talked about a stat like this [cross talk]
David Leary: Which is okay, if you have all your clients set up on ACH, and you're automatically debiting their accounts, it's okay. But there's a lot still sending out paper invoices to clients, and the client may pay you 90 days from now.
Blake Oliver: Yeah, they're waiting 30 days to get paid, and it just makes no sense to be doing that. When I had my firm, I set everybody up on automatic monthly payments, and that's the way I survived. I couldn't ... The amount of capital that you have to have to basically finance your clients to- loaning them money, it's just [00:16:00] insane.
It's interesting, because it's not like big news that made the audience just explode in cheers that you see sometimes at conferences, when new features are announced, but I think these are really good for the end-user, which is what's really important in building support for Xero as a platform in the United States is solving that payments problem. That is the biggest challenge for small businesses.
David Leary: Yep, and I think that's still going to be a debate, this cash versus credit; one versus the other. We'll see when it stops.
Blake Oliver: Yeah. 
David Leary: Anyway, I think I mentioned sessions [00:16:30] start like 7:00 a.m.; What time do sessions start tomorrow?
Blake Oliver: I think it's 9:00 a.m. I hope ...
David Leary: I get to sleep in like three hours, plus I gain an hour, because of the time-zone change. It's gonna be beautiful.
Blake Oliver: Let's double-check that.
David Leary: Okay. 
Blake Oliver: Xerocon day two schedule kicks off on- yep, 9:00 ... 9:15. You get an extra 15 minutes, David.
David Leary: Okay.
Blake Oliver: But don't miss breakfast.
David Leary: I am also going to do double-duty. I'm going to have to watch this Twitter feed for Scaling New Heights, because on that last day of Scaling New Heights, they [00:17:00] always announce where the next Scaling New Heights is going to be. That would be news I'll have to make sure I pick up tomorrow.
Blake Oliver: There's actually one more piece of news [cross talk] from Xerocon. I missed this. I was not in the room when this was announced, if this was announced in a keynote. Apparently-
David Leary: This was an assignment. What do you mean you weren't in the room?
Blake Oliver: Well, you know, I'm a busy guy, David. I had to get ... Actually-.
David Leary: All right, now we have a job opening for one field reporter. 
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Blake Oliver: One of the keynote speakers today was Shawn Kanungo.
David Leary: Okay.
Blake Oliver: He's a CPA. I think he calls himself a 'disruption strategist.' He [00:18:30] gave a keynote-
David Leary: That's worse than my made-up business title.
Blake Oliver: What's your made-up business title? 
David Leary: Well, I was a small business ecosystem evangelist.
Blake Oliver: This is good, right? Disruption strategist ...  Shawn Kanungo, he gave one of the keynote addresses. It was called "Strategy in a World of Disruption. Be Bold. Be Brave. Be Experimental. Why Build a Culture of Experimentation?" Great title, great keynote. This is the beauty of the internet - we [00:19:00] connected on Twitter, sitting like 10 seats away from each other, so I interviewed him right after his keynote.
David Leary: Oh, great.
Blake Oliver: That's why- that was my excuse for not being in the room.
David Leary: You scored a keynote interview.
Blake Oliver: Yeah, so, that'll be coming out, and you'll get to hear Shawn's take on building a culture of disruption. I asked him some questions about if you're an accountant in a more traditional firm, how do you build support for moving to the cloud? Because I know a number of our listeners are having that challenge, right? You [00:19:30] might be a staff accountant, a manager in a more traditional firm, just as I was, and you're having a really hard time getting the partners on board with it. He had some great tips. I think my favorite was go to work every day and try to get yourself fired.
David Leary: That's a good one. 
Blake Oliver: Well, in a talent-shortage type situation, hey, if you by chance succeed, then you'll probably be better off, right? But we'll save that for the special [cross talk] 
David Leary: -so it's all in the interview you did today. Awesome.
Blake Oliver: It's all in the interview, today, yeah. The [00:20:00] last piece of news I have out of Xerocon is PWC and Xero are partnering up. They have officially created a global collaboration with PWC allowing local PWC firms around the world to provide quick and easy access for their clients to access the Xero platform. What does it really mean? Hard to know, because announcements like this happen pretty frequently with the Big Four.
David Leary: Yeah, and I've seen a lot of announcements [00:20:30] like this from lots of apps. It's always a struggle, because it's a great press release, but the big firms are slow to roll out technology to small businesses.
Blake Oliver: Yep. 
David Leary: We'll see what happens with that. You can't say it'll never happen, but historically speaking, a lot of apps have gotten great press releases, and then-.
Blake Oliver: Intuit did this sort of thing in the past, too. 
David Leary: Intuit ... I've seen other apps. Expense apps have done it. I've seen lots of apps have done this, and got the big press release, and they're just slow to roll it out, versus, if [00:21:00] you think about the average Xero advisor, or even the ProAdvisors that are at Scaling New Heights ... If they have 60 clients when they decide they're going to implement an app or roll something out, they roll it out to all 60 clients. These big firms, they have thousands of clients, and then they roll it out to 42, and then it loses steam.
Blake Oliver: We'll see what happens with that, but, yeah, that's what I caught. Hopefully, I didn't miss anything. If I did, you should let me know. I'm on Twitter, @BlakeTOliver. How about you, David?
David Leary: I'm on Twitter, @DavidLeary. [00:21:30]
Blake Oliver: It's gonna be fun being with you, David, tomorrow at Xerocon day two, together.
David Leary: My first Xerocon. Are they going to put a little X on my forehead? Is there anything weird like that that happens?
Blake Oliver: You know, I don't know. I don't know what's going to happen, David. You better watch your back. We are gonna be interviewing some Xero folks. We've got some high-level people at Xero-
David Leary: High-level people.
Blake Oliver: High-level. I don't want to- it keeps changing. We'll see who actually shows up. 
David Leary: Before we commit. 
Blake Oliver: Yeah, but, some really good ... We're gonna ask some [00:22:00] tough questions of the Xero leadership team. That'll be really fun, and we're gonna try and walk the floor at Xerocon, right? 
David Leary: Okay, that could be fun.
Blake Oliver: We're gonna take our mobile podcast rig, and we'll see if we can go round and meet various folks and just see what happens.
David Leary: Man on the street. 
Blake Oliver: Man-on-the-street type interviews, yeah. 
David Leary: You know what we could do? I have an idea ... Since it is the Summer of Advising-
Blake Oliver: Yeah. 
David Leary: We'll just ask everybody the same question: what is advisory? We'll get all these crazy answers. It'll be so much fun.
Blake Oliver: I think we might [00:22:30] want to try that,  yeah.
David Leary: That way, we don't get in a conversational interview. We'll just ask them that one question-
Blake Oliver: That one good question. 
David Leary: -and they get to answer it. "See you later. Thank you very much."
Blake Oliver: I'm looking forward to that. Let's go get some sleep. David, I'll see you in a few hours.
David Leary: All right, have a good night, everybody.
Blake Oliver: All right, bye. 
David Leary: Bye. 

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