Xero yesterday announced changes to the pricing structure of its Standard and Premium plans for all existing and new subscribers from 2 June.
In response, Reckon released a statement saying CEO Clive Rabie believes that Xero is price gouging and the move will hurt small business in Australia.
“Yesterday’s announcement from Xero that it will be increasing prices will be a blow to many of Australia’s growing businesses,” the statement read.
Mr Rabie said the changes will hurt small businesses and criticised Xero for upping its fees.
“Australia has so many brilliant ideas and opportunities and we can be there to support the great businesses of tomorrow. Continued price increases by Xero and MYOB for software that shouldn’t cost more for bringing on new staff will hurt small businesses,” he said.
“Small businesses need more certainty than this when planning for the future. We see ourselves as supporters of Australian entrepreneurs and businesses, and want to give them the tools to succeed.”
Xero used a blog on its website to defend the changes, saying the new pricing more accurately reflects the value of its product, which it says has increased significantly with the release of new features, such as Payroll.
“We’ve reached a point where our prices no longer reflect the strength of payroll and what’s to come. For these reasons, we’ve adjusted the prices of our plans in Australia,” Xero wrote in a blog on its website.
From 2 June, Xero's Standard and Premium plans in Australia are changing for all existing and new subscribers:
• The limit for payroll employees on the Standard plan will decrease to one employee;
• A Premium 5 plan will be introduced with up to five payroll employees, auto-super and multi-currency, for $60 per month;
• Premium plans will increase by $10 per month.
According to the Xero blog, the biggest change is to the standard plan, where the limit of payroll employees will reduce from five to one.
For businesses with two to five employees Xero has introduced the Premium 5 plan, which includes up to five payroll employees and the advanced features of auto-super and multi-currency, for $60 per month.
According to the blog, businesses on a standard plan who do a pay run for more than one employee in May will be switched to the Premium 5 plan on 2 June, otherwise, these businesses will remain on the standard plan.
Existing and new premium plans will increase by $10 per month. Businesses on Premium 10 for multi-currency who don’t do a pay run in May will be moved to the Premium 5 plan on 2 June and won’t have a price increase.
There are no changes to starter or partner edition plans.