Software maker Xero closed its August 2022 User Conference in New Orleans with loud music, bright lights and smiles on everyone’s faces – but the event was more than just food. music and laughter. Partnership was the word most often heard at this year’s conference.
“We were born that way,” said Anna Curzon, product manager at Xero. “Rod Drury [Xero founder] had a vision for a single registry in the cloud, real-time data around which everyone could collaborate, where small businesses could get advice from their partners. It’s really important for us to network and trust the accountant/accountant community. If you have an accountant by your side, you are more likely to survive and thrive.
Hamish Cook, vice president of product for Xero-US agrees with the concept of partnering with accountants. “We want them to be part of our family – there are benefits on both sides.”
Bringing the pieces together – the small businesses, their accounting professionals, and the software – seems to be the secret to Xero’s success. “Our product strategy was developed from determining the needs of the small business and how we can make it easier for the collaborating accountant,” said Ben Richmond, country manager for Xero, USA. When confronted directly with the question of whether Xero’s future plans include offering accounting and bookkeeping services, Richmond confirmed that this was not planned.
One of the reasons working side-by-side with accountants is key to success is keeping up to date with the ever-changing world of technology and financial services. “Digital transformation isn’t going to stop,” said Steve Vamos, CEO of Xero, at August’s Xerocon conference in New Orleans, reminding the nearly 1,000 attendees that change is here to stay. “Innovation in all areas such as financial services opens up new opportunities. New opportunities for small businesses to operate more efficiently, but also to access capital more efficiently. Showcasing the software company’s vision, Vamos kicked off the two-day conference on a positive note, reminding attendees that the work accountants provide to our clients is more than numbers, it helps clients sleep at night.
Vamos explained Xero’s vision in three waves. The vision is to be the most trusted and insightful small business platform.
- The first wave is about functions and foundations. Features include practical tools, tax solutions, small business accounting. The foundation of the business and perhaps what sets Xero apart from its competition is Xero’s focus on accountants working with clients. “It’s our relationship, our partnership, that makes Xero different, unique and special,” Vamos said. While keeping its distance from providing accounting and bookkeeping services, Xero frequently stresses the importance for small businesses to work with an accountant.
- The second wave of Xero’s vision is to provide a myriad of application services. Xero prides itself on its open API (Application Programming Interface) and offers over 1,000 applications that run within the Xero environment, allowing users to customize their Xero experience to meet their particular needs.
- The third wave to complete Xero’s vision is that of reliable information. Using anonymized data from the company’s global user base, Xero now produces quarterly Xero Small Business Insights (XSBI) insights that track the performance of small businesses around the world, providing insight not only to businesses and industry leaders, but also governments and policy makers who need to understand what drives small business.
Previously, XSBI quarterly reports were produced in England, Australia and New Zealand, but in August the company produced its first reports in Canada and the United States. The most recent report focused on the role inflation has played in the post-pandemic recovery of small businesses. The report’s findings show that the recent growth of small businesses can largely be attributed to higher prices resulting from inflation, rather than an increase in the quantity of goods and services sold.
Louise Southall, Xero Economist, spoke with CPA Practice Advisor on the XSBI reporting process. “One of Xero’s main goals is to become a reliable and relevant source of information for small businesses. We see our role as primarily helping small businesses run their businesses better, and so a big part of that is making sure the best information is available to the people making decisions about small businesses,” said said Southall.
Through the XSBI program, Xero aggregates data on how small businesses operate globally as well as in certain regions and can provide small business-specific statistics and data at very short notice, where government agencies often put months compiling similar data. “Across the program, we’re looking at over 300,000 companies across the five countries,” Southall said.
More information about XSBI reports can be found on the Xero website. Currently, the XSBI team tracks sales, cash flow, and late payments in North America. “What we want to do is try to present as holistic a picture as possible of what’s going on in small business,” Southall said. “We picked them for North America because we think they give a really good overall view of how small businesses are tracking.” XSBI will produce quarterly reports and they are available free of charge.