Xero price hike has some accountants looking for alternatives

Accountants Daily sought comment from a Xero spokesperson, who told the brand: “We regularly review our pricing, taking into account market conditions and the value of what we are delivering for customers.”

“We announced updated pricing for Xero customers in New Zealand on 29 July, which will be effective from 1 October 2026.”

Speaking with Accountants Daily, JD Scott & Co founder James Scott said that the ones being impacted are not small businesses, but accountants.

“The prices have been going up regularly.”

“They're a small dollar amount per month, but if you look at the actual percentage increase, they've been anything between 10 and 20 per cent per annum.”

Scott said the value proposition in the face of these fee hikes is being scrutinised off the back of outages that his clients have reported.

“There’s been at least two instances or maybe three I can think of over the last year or so where Xero has an outage, sometimes, you know, a day at a time.”

Although Scott said that this may have been due to AWS or Microsoft, he stressed that this is critical software for accountants.

“It’s critical to the business sector in Australia and indeed globally; it's critical to tax lodgements, it's critical to different superannuation and payroll.”

Scott emphasised that Xero is not the only software to put its prices up, but it adds up to accountants’ financial burden.

“All the software costs are going up; [but Xero] is one that annoys accountants, because it's the one we use the most.”

“Even though that in a dollar per licence per month might be a few bucks, you multiply that over a year, it's quite a large number,” Scott said.

Also speaking to Accountants Daily, Saby + Partners managing tax partner Nitin Saby told the brand that he has seen both small businesses and accountants feeling the pinch of rising software prices.

“Everything is on the rise, and [accountant clients] have said to me, I think if we go back to our … SME [clients] now, and they say they don't want to raise even a single dollar, so how can [we] absorb this [price] increase of Xero?”

Saby said that a potential alternative would be to explore less costly options such as AI.

“It can't be just relying on one accounting tool or software; you need to look at the market … With AI automation, there are many, many fantastic tools available, so I think it's also the duty of the accountants or tax agents to look proactively for the alternative so that they can save the cost for their clients.”

“We all need to work in collaboration to find alternative solutions for this. We can't be just relying on one mainstream accounting software.”

“We're not here to fill the shoes or the money pot of other people; we need to serve clients with a value proposition.”