Xero execs play up integrations, point to vertical solutions

As the cloud accounting software provider builds up its North American presence, it is positioning itself as the hub for small-business financial management processes.

One factor instrumental in helping New Zealand cloud accounting software provider Xero build its North American presence—aside from the $150 million raised to support that agenda—is its vast ecosystem of add-ons and integrations to other services crucial for managing a small business holistically: more than 300 and counting. 

As Xero doubles down on its market outreach in the United States, you can expect that focus to continue, according to the executives leading that charge, newly appointed U.S. CEO Peter Karpas and U.S. President Jamie Sutherland.

"The number isn't as important as the quality of the integrations, but it is one of our great advantages," Karpas told me in a recent interview.

One particular focus right now for Xero, and other cloud accounting players i ncluding powerhouse Intuit, is integration with payroll software that helps automate some of the onerous tax administration that small-business owners must handle on behalf of employees. Aside from its own service, Xero has enabled integrations with major providers including Paychex, ADP Payroll Services, and upstart ZenPayroll.

You'll also hear more about vertical market application support in the future, Karpas said. While he wouldn't be specific, Xero in February announced a "Farming in the Cloud" solution that will bring single-ledger reporting to farmers starting in mid-2014. The initial focus is on supporting the farming community in New Zealand, where Xero has its roots. The solution is made possible through an integration with farming accounting experts Figured.com, as well as software partners iAgri and Aghub (both of which provide farm management applications), according to Xero's press release about the new solution.

As of late February 2014, Xero's cloud platform was being used by more than 250,000 small businesses and accounting professionals worldwide. The company doesn't specifically break out its US numbers, but it has roughly 100,000 in its original market, Australia. The service is available in more than 100 countries.

Most of Xero's customers are migrating to the platform from desktop accounting applications or spreadsheets or manual methods, according to Sutherland. Hence its launch last year of a QuickBooks conversion service  to help with migrations.

To help guide its development priorities, Xero works with a partner advisory council that includes accounting professionals and technology integrators. "We believe that a small business paired up with their professionals is more likely to be successful… We're focused keenly on the ability to collaborate with an outsider on finances, to help them decide when to hire the next employee and take out the next loan," Sutherland said.

Small businesses can try the Xero service free for up to 30 days. After that, pricing starts at $9 per month. It's most popular plan in the United States is the $70 per month premium subscription, which supports companies with up to 10 paid employees and offers up to 10 gigabytes of file storage. It also offers discounts to entrepreneurs who are running more than one business.

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