In August, Xero held its annual Xerocon event in Nashville, Tennessee, hosting over 1,000 accounting professionals, financial advisors, and business consultants. Xero CEO Sukhinder Singh Cassidy started the event by discussing how Xero has been resetting the company, evolving its management team, and accelerating growth and technology initiatives. The company also discussed plans to elevate its focus on the North American small business accounting market and add new AI, mobile, and other features to its accounting platform.
Key Highlights
- New management team. Sukhinder Singh Cassidy joined Xero in November of 2022, commencing in the CEO role in February 2023, and brought in Diya Jolly as the Chief Product Officer in 2023. In April 2024, Xero announced Diya’s promotion to Chief Product and Technology Officer. Jolly came to Xero from Okta, where she served as the Chief Product Officer. Ashley Hansen Grech joined Xero in 2023 as well, after stints at Recharge and Square. As Chief Revenue Officer, she now leads Xero’s global go-to-market functions including sales operations, regional managing directors and leadership, customer experience, partnerships, and revenue operations. Michael Strickman joined Xero in October 2023 as Chief Marketing Officer. Together, the team is focused on accelerating innovation and promoting Xero’s offerings with more aggressive marketing to increase brand awareness and adoption in the US market.
- New GenAI-powered smart business companion, Just Ask Xero (JAX). Using a conversational style powered by generative AI, JAX is designed to assist users with bookkeeping tasks—from requesting information about accounting information to providing personalized insights about finances. With JAX, Xero aims to help users streamline processes, automate repetitive tasks, and provide insights to make their experience more efficient and productive. The vendor is focused on simplifying bookkeeping and financial management for small businesses, with capabilities such as smarter invoice categorization, predictive cash flow insights, and automated reconciliation processes. Customers can sign up now to try the beta version. Xero has yet to announce the full launch date and pricing.
- Strategic partnership with BILL to enhance accounts payable capabilities. Xero has recently formed a strategic partnership with BILL (formerly known as Bill.com) to enhance its accounts payable capabilities for U.S. businesses. This partnership integrates BILL’s payment solutions directly into the Xero platform, enabling Xero users to manage bill payments more efficiently without needing to switch between different systems. This embedded solution is designed to streamline bank transfers, check writing, and credit card entries—typically manual and time-consuming processes. Through this partnership, Xero users will also have access to BILL’s extensive network of 5.8 million members, allowing them to more easily find and pay vendors, further automating financial management.
- Better banking integration. Xero has increased the number of direct bank feeds in the U.S. and Canada from 20 to over 700 in the past 18 months, through partnerships with aggregators like Yodlee and Flinks. It has also added new bank reconciliation support to a period or bank statement so users can more easily identify discrepancies between bank statements and entries in Xero. This enables accountants and bookkeepers to verify the accuracy of their financial data and categorize and balance transactions at the end of each month. In addition, Xero has enhanced bank feed monitoring so users can more accurately detect when a bank feed is down.
- Enhanced sales tax and compliance features. Accountants and bookkeepers can now request W9 information directly from the contact page, and manually mark W9s as received, either one by one or in bulk. Xero has streamlined the process to create W-9s and expanded state-based sales tax reporting so that users can automatically generate sales tax reports for every state and filing period. The vendor also plans to introduce a new client insights dashboard in Xero Practice Manager and Xero HQ to give accountants and bookkeepers a snapshot of the financial health metrics and trends for their business edition clients.
- Boosted mobile functionality. Xero is making significant enhancements to its mobile accounting app to enable small businesses to run and manage their accounting entirely on mobile devices. A number of enhancements have already been rolled out and this is an area Xero will continue to invest in.
- Expanded partner ecosystem and integrations. Xero continues to expand its global footprint through strategic partnerships with financial institutions, payment providers, and technology companies. Xero’s strategic partners include Stripe, BILL and Amazon Web Services(AWS). These collaborations help Xero adapt its platform to different markets and meet the specific needs of businesses in various regions. In addition, integrations with e-commerce platforms and CRM systems, facilitate smoother workflows and data synchronization. Xero is also working with a range of technology providers to access the best development tools, leading large language models (LLMs) and platform technology to provide the best tools to its customers.
- Increased focus on security. Xero has bolstered its security protections, emphasizing stronger data protection protocols and improved fraud detection mechanisms.
Perspective
Xero’s strategy and new initiatives hold promise to boost Xero’s competitiveness in the U.S. market, but its success will depend on various factors such as market dynamics, customer preferences, competitor actions, and overall business execution.
To date, it’s proved difficult for the vendor to grow mind and market share in the North American accounting market. Despite Xero’s advancements, expanding its share of the U.S. market has been an uphill battle. QuickBooks dominates the market, and Xero’s success will depend on its ability to differentiate itself effectively. Xero’s new features, particularly AI-driven ones, are promising but will need to be well-marketed and more valuable to users than the competition to truly move the needle.
Likewise, Xero’s expansion of its partner ecosystem and integration capabilities presents a significant opportunity. However, the effectiveness of these partnerships and the benefits they deliver to customers will be critical to its success.
While enhancing customer support is always a plus, it must be meaningfully better than competitors’ support to have a significant impact. By providing superior customer service, Xero has the opportunity to create a niche market of highly-satisfied customers who can serve as brand advocates.
Since it is harder to displace an incumbent accounting vendor, Xero will need to lean into selling to the millions of small businesses in U.S. that still use spreadsheets for accounting, and the many new small businesses that are formed every day. Persuading these businesses that they need an accounting solution—and or that Xero is the best one for the job—will require Xero to educate small business owners about the value that dedicated accounting software brings to small businesses, elevate brand awareness, and clearly distinguish its value-add versus the competition.