With global economic conditions in mind, how is Xero thinking about its product and platform development?

Global macroeconomic conditions continue to be tricky for businesses of all kinds. This environment makes it even more important that small businesses understand their finances, can manage their cash flow, and get paid on time. It underscores how much our customers and partners benefit from Xero and the value we bring them in helping to navigate a complex environment.

We continue to enhance and scale our platform in response to our customers’ evolving needs. We’ve recently released updates, including providing our US customers early access to Xero’s new auto sales tax feature, new direct bank feeds through our partnerships with Flinks and Yodlee, and enhanced flexibility and customization on our new reporting platform. Our open ecosystem of apps and integrations is front-of-mind as we build, because our flexibility in this space helps our customers to be agile and make the right choices for their needs.

What are some of Xero’s key priorities for small businesses in 2024?

Long payment times or late payments can really put a lot of stress on small businesses. Our research shows that as a result of cash flow issues, 45% of US small business owners haven’t been able to pay themselves, and 22% of small business owners in Canada used their personal savings to get by. At an economic level, our research shows late payments cost small businesses an estimated AU$1.1 billion per year in Australia, NZ$456 million in New Zealand, and £684 million in the UK. In this environment, balancing the books to avoid cash flow challenges each month is a persistent theme that has real-life consequences for small business operators.

We always strive to be more customer-centric and responsive—guided by our small business customers’ evolving needs. Continuous feedback from our partners and small business customers helps to inform our decisions as we focus on delivering the right features and functionality that meet their needs.

How does Xero stay attuned to its customers’ needs?

Accountants and bookkeepers, or partners as we call them, are crucial to how we support small businesses at Xero. They not only play an essential role in the success of small businesses, but they’re also important advocates for how cloud technology, like Xero and Stripe, can make their clients’ lives easier. Our partners are also an important conduit of information back to us on what’s important to their clients. Our business and product teams use feedback from our community and customer engagement to help shape future Xero offerings.

We stay close to our partner community in a number of different ways, such as our Xero Partner Advisory Council (XPAC), which is a select group of partners representing many of our key regions. We also hold Xerocon, an annual global event, plus regional and local events throughout the year, providing moments for open and intimate conversations with accountants and bookkeepers.

The 2023 Money Matters by Xero report revealed that managing cash flow is a very strong or strong priority for 85% of US small business owners. How can Xero help with that?

Our Money Matters report shows how cash flow management is an essential part of small business success. The report shows that for many business owners, cash flow can affect whether they’re able to pay themselves or take advantage of business opportunities. We want to make it easier for small businesses to get paid faster. That’s why we’ve focused on offering more payment methods—giving their customers more ways to pay—and adding a “pay now” button to online invoices. We’ve also added the option to set up automatic invoice reminders, which is a great tool to follow up late payments without adding to the administrative burden.

For small businesses to get an accurate picture of their cash flow, we’ve developed a suite of tools, including Xero Analytics Plus. These tools provide real-time financial insights up to 90 days in advance for small businesses and their advisors to better manage cash flow and measure financial performance.

Where do you think Stripe and Xero are uniquely aligned in terms of customer focus and values?

Key partnerships often thrive when both partners share the same values. Xero’s and Stripe’s values are strongly aligned when it comes to making life easier for small businesses, so they can focus on doing what they love. With cash flow issues being front and center for small businesses, together we recognize that businesses need better technology to make it easier to get paid and manage their books. We see a tremendous opportunity to champion this for small businesses.

In what ways can Stripe and Xero continue to partner effectively on behalf of small businesses that use our integrated tools?

We’re excited to be continually deepening our partnership with Stripe. In 2022, we launched an app on the Stripe App Marketplace that helps small businesses automate the flow of payment data between Stripe and Xero into one central view. The free app makes it easier for small business operators using both platforms to manage their finances and reduce manual admin, so they can focus more on growing their business. Recently, Stripe helped us syndicate this app to other platforms built on Stripe, like Kajabi, enabling a no-code integration with Xero and extending the partnership even further.

Our global data shows that invoices with an online payment service attached, like Stripe, get paid up to twice as fast as invoices to customers who don’t use online payments. We need to continue working together to encourage small businesses to adopt digital payment services, so they can get paid faster and better manage their cash flow.

As the world is embracing AI, how is Xero keeping pace?

Xero has always been excited about and committed to adopting new technologies to help our customers. Last year we commissioned research that shows 80% of small business owners globally are concerned the fast pace and nature of AI is leaving regulation in the dust. So we’re keenly aware that we have a responsibility to make sure we’re using AI in the right ways.

AI is a core technology that delivers on this commitment and already powers many of Xero’s products and features, including Xero Analytics Plus, bank reconciliation, Hubdoc, and Xero Expenses. Earlier this year at our Investor Day, we previewed Just Ask Xero (JAX), a GenAI-powered smart business companion for small businesses and their advisors. Available in beta later this year, JAX will give users a natural, approachable way to interact with Xero’s product, right from within the apps and devices they already use every day.

We’ve also recently launched two new AI-powered features. The first uses predictive AI to help forecast future cash flow using recurring invoice and bill payments in our Xero Analytics Plus tool. We’ve also introduced generative AI in Xero Central—Xero’s customer support and learning site—in partnership with Coveo. This helps deliver accurate support answers faster for our millions of customers. The answers are generated from our extensive support content articles, written by the Xero team. Customers get the information they need faster, and they don’t have to keep scrolling through content to find what they’re after.

Xero is a verified apps partner in the Stripe Partner Ecosystem. Learn more at https://stripe.com/partners/directory/xero-invoicing.