Kiwi software firms get together

Two of New Zealand's accounting software firms have formed a partnership in a bid to attract more customers.

Christchurch's privately-owned Acclipse and fast-growing listed company Xero announced yesterday they would work together to develop compatible software for accounting firms.

Xero chief executive Rod Drury said no money had changed hands and the deal was "just a nice clean partnership".

"It'll help us sell a hell of a lot more Xero licences and it will help sell more Acclipse licences and all of us will have a much better relationship with all our clients. It's one of those true win-win type deals."

Xero shares rose 10 per cent (8c) following the news, to close at 88c yesterday.

Acclipse was created in 2002 by Christchurch information technology entrepreneur Mike Chisholm, who remains the company's chief executive. In 1999 Chisholm and other shareholders sold software company CA Systems to Australian firm Mind Your Own Business (MYOB) for about $25 million.

Acclipse now has more than 40 staff and 9000 users of its software across New Zealand and Australia.

Xero was founded in 2006 and listed in June last year.

Last week Xero announced it had notched up 2000 customers of its online accounting system.

It took the company 18 months to add its first 1000 customers and just 4 1/2 to add its next 1000 customers.

Drury said the two firms were not competitors because Xero made software for small businesses and Acclipse specialised in software for accountants.

However, traditionally the systems used by accountants and small businesses were not compatible, so accountants have had to spend a lot of time transferring data from a small-business accounting system into their own practice software.

That process was time-consuming and clumsy because little technology had been applied to it over the years, Drury said.

The new partnership would see the firms develop compatible systems.

The partnership would also help Xero with its expansion into Australia, where Acclipse was already established with more than 500 accounting practices listed as clients, Drury said.

"Each accountant works with hundreds of small businesses so it's a very-leveraged opportunity for us."

Drury said the move was an exciting development for the future of the accounting industry. "Acclipse shares our vision of making it easier for small businesses to be successful and empowering accountants to be the trusted adviser to small business."

Drury said there would be no staff changes, but some staff were now working closely on the partnership.

Asked if Xero had considered buying Acclipse, Drury said it was not something they had thought too much about.

"We are in our own space. Our focus now is building some great partnerships."

Chisholm, who could not be reached for comment, said in a statement, the partnership would create a compelling offering that had the potential to revolutionise the accounting profession.

- © Fairfax NZ News