Accounting has a user interface problem. Actually, it has two. The obvious one is the one that comedians have done to death: it’s boring work. We’ll come back to that. But there’s a bigger issue. "Accounting used to be this thing that you did retroactively," says Philip Fierlinger, co-founder and lead designer at Xero. "In the past, at the end of the year, [your financial adviser] could tell you 'Oh man, things really went sour six months ago.'" This hindsight, says Fierlinger, is nearly useless. "When you can do something about it as it’s happening--that’s the really important thing."
Xero is web-based accounting software, built in an effort to solve this problem. It is driven by two attitudes about accounting. First, that it should be as close as possible to real time, and second that it should be easy for business owners to collaborate with their partners, investors, or financial advisers on a regular basis. Xero is an app for understanding cash flow. From this core, a whole host of transformations cascade through the UI and business models of accounting and financial services.
Fundamentally, accounting is an information design problem. Its task is to answer, to the penny, the question "What happened?" Over the course of the week, month, and year you and your authorized agents conduct transactions on behalf of your business. Keeping track of these transactions is incredibly hard, as anyone who’s ever tried to balance a till at the end of the day or file their taxes already knows.
It gets harder still when you are trying to move information between different accounting systems, whether that’s from one software package to another, or from a box of receipts to a ledger. "Accountants used to hate the work that they did," says Fierlinger. "A lot of it was just pushing data around." In effect, we’ve been paying accountants to do data entry, rather than accounting. "The problem there is that things get lost in translation and you’re always playing catch-up."
Xero’s web-based approach allows everyone to look at the same numbers. This changes the relationship with your accountant from someone who drops in at the end of the year to someone who is part of your team. "Virtual CFO is a term some people are using," says Fierlinger. This change has enabled a shift in business models for accountants too. Instead of fee structures that revolve around an annual rush to get everything reconciled, Fierlinger says, there are Xero-based accounting firms that have changed their models to SaaS-style monthly subscriptions.
At the same time, Xero has invested considerable effort in integrating with a wide range of specialized business software. Xero plays very well with others. They tie into systems for invoicing, payment processing, payroll, CRM, point of sale, and inventory and they maintain a list of developers that will build custom integration. The goal is that rather than people transferring data, machines should be talking to machines. This begins to address the first UI problem (accounting is boring) by offloading the incredibly tedious work to things that don’t get bored.
Once you’ve gone real time and collaborative, the natural next step is to go mobile. Xero took this step in the summer of last year, with an iOS 5 update in November.
In designing the mobile app, Fierlinger says they wanted a feature set that focused on the things you do when you’re on the move. "Accounting can be pretty complex once you scratch the surface," he says. The question is, "What can you get done in one or two minutes?" Generally speaking, this means that the app aims to make it easy to scan for relevant information and to do quick data entry. The more complicated tasks relating to data management, they leave to the desktop. The focus remains on cash flow.
The biggest feature, says Fierlinger, is a relatively simple one. You can see all your bank accounts in one place and see how they are reconciled to your books: "You can really quickly see at a glance if there are going to be any shortfalls." He compares this ability to the ambient awareness of Twitter or email. "A lot of people say they wake up in the morning, fire up Xero Touch and see any transactions that have come in since the day before," he says. "They like to get a sense first thing in the morning of their financial position."
On the data entry side, Xero Touch allows you to take photos of receipts to file expenses right away, and to send invoices on the spot. This is something that tradespeople have been doing for some time, says Fierlinger. "It’s interesting to see consultants adopting that pattern as well." This can be a big boon. "It makes things quicker for getting paid," he says. "There’s none of that 'Ah, I didn’t get your invoice’."
Xero Touch also has map integration, which is not a feature you might think accounting software would need. But Xero knows the addresses of your clients and if you are in the area, you can drop by. "More importantly, if a client owes you money, that’s a great opportunity to say, 'Hey, this person owes me money. I need to pay them a call and make sure they pay me,'" says Fierlinger. "Again, it’s all about cash flow."
Xero’s design process is about iteration and user testing. Fierlinger says they have a rapid prototyping tool through which they run all their user interface ideas. "We can really explore a lot of territory very, very quickly," he says, so they start by designing a dream solution. Something they know they’ll never actually ship. "By exploring the dream solution, we discover whole new ways of thinking about a problem or a whole new way that it connects to problems we’ve solved before," he says.
They can then take these lessons and pare them back to something that can be implemented, tested, and shipped in a reasonable time frame. "We undercook what we ship," he says. "This is a very intentional process. We have theories about how people will use it but until people are using their own data and focussing on the work at hand …" You can never be sure.
Fierlinger describes their development process as an ongoing collaboration with their customers. Customer feedback helps direct their attention, and a ruthless 80/20 approach prevents the software from becoming bloated with features. When they ship, they have an idea of what people might want, says Fierlinger. They can use customer feedback to find out. "Did they actually want it in the end? It’s a hugely iterative process."
Xero is web-first software and Xero Touch carries that pedigree. "There is this raging debate about iOS versus web apps," says Fierlinger. Xero Touch is a hybrid, built on the Sencha framework. Xero Touch looks and feels like a native iOS app but under the hood, it’s not. "We are web native, that’s our core, that’s our software stack." But there are features that being an iOS app brings to the table that are not available if you just built an HTML 5 site for people to bookmark. For one thing, there’s access to hardware sensors like the camera. For another, there’s the exposure that you get from being in the App Store.
As for the benefits of a native UI feel? "We felt like Apple had created a really awesome UI pattern and UI framework," says Fierlinger. He says that the exciting thing about mobile is that it’s still very immature and there’s a lot of room for innovation. He points to Twitter as an instance of a company that has the means and motive to do some interesting and groundbreaking mobile UI work. But ultimately, Xero Touch is just an aspect of their larger product. "We’re not going to try to invent a new UI language for the sake of it. We feel like Apple did a pretty darn good job and people recognize it."
Looking ahead, Xero continues to work on the UI problems of accounting. Fierlinger says they’re exploring how to transition from keyboard-centric app design patterns to a touch-centric design language. Because of the particular requirements of finances, this is not an easy problem. "Other apps like Twitter and Facebook are not that data-entry intensive," he says. "We work with really finicky data. You can blast something into Facebook and Twitter and if there’s a typo, who cares?" If there’s a typo in your ledger statement, you care a lot. "It’s an interesting crossroads that we’re at," he says. "It’ll be interesting to see how far along we can get."
[Image: Joachim Wendler/Shutterstock]