It was not long ago that the rallying cry of all accounting and business application makers was “all in” with the cloud. Now that same bravado is being seen with AI, but will it be enough to progress these same cloud businesses like Xero in the eyes of their intended market?
Where the profession will land on what they use for a general ledger and what any kind of a tech stack around that will look like remains to be seen. I can say from my view, it appears the now “legacy” (I know, hard to say, but bear with me, I have a point) platform makers are opting for a more suite approach to their offerings. In other words, use us for everything you need; we’ve built it, or it is coming in short order.
The world we are entering involves a lot of self-creation via available AI tools. And in the not-too-distant future, we could well see these same tools suggest or even build on their own what the user needs and not have to rely on the “old guard” developers to come up with.
This now brings into question brand equity, something Xero has been challenged in North America in the 2 decades they’ve been here. This is due in large part to how engrained brands like Intuit and to a degree Sage are, despite ever-increasing frustrations with their products and related pricing.
Attending an event like Xerocon, one can easily see the momentum they have built, especially among those who have been largely in the Intuit/QuickBooks camp for so long. In fact, according to Xero’s CEO, Sukhinder Singh Cassidy, the North American market in particular is their fastest-growing, with 424,000 current customers.
“18 months ago, Xero began a brand investment journey that will ramp up even further,” Singh Cassidy said in her opening keynote speech. “And this year, the app volume of people building on the Xero platform has increased 4x (from last year).”
In short, for Xero’s part, it appears much of its development is going into giving its user base the ability to build what it needs with Xero. Increased investment in 3 core areas is coming as well: core capabilities (reconciliation and reporting), increasing overall capabilities within Xero, and AI across all areas, according to Matan Bar, CEO of Melio and Xero US.
On that note, there was a bevy of new and “coming soon” announcements from Xero, many with AI components to them, buiilt around its AI finance platform JAX. Here’s the list as I know it:
The next evolution of Xero Partner Hub will bring live book health, work status, and month-end readiness in the same view across all of a practice’s clients. Xero Partner Hub will also surface conversations around cash flow patterns or unusual P&L movements.
Smart Document Capture reads source documents and pulls the data directly into Xero — no syncing, no separate app.
Auto Bank Reconciliation matches high-confidence transactions to bank feeds in real time and tells you exactly why it matched every single transaction, surfacing any exceptions that require human expertise. In the coming months, Auto Bank Reconciliation will also handle more complex cases, like splitting a single payment across sales and fees.
Document Requests in Xero Partner Hub is coming soon, where JAX will request documents from the client, send reminders, respond to clarifications, and then match them with transactions in Xero, all while making sure customers get to approve every step.
Cash Flow Actions, powered by JAX, can spot potential cash flow gaps before they arise and help businesses build a plan to stay in the black. Payment Follow-Ups and Bill Protection work alongside each other—accelerating money coming in and giving businesses visibility and control over money going out.
More Coming Soon…
JAX will build scenarios grounded in actual Xero data with Scenario Planning, giving businesses and their advisors the clarity and context they need to make informed decisions. Customers will be able to model rising costs, a price increase, or a hiring decision and see the potential impact in real time.
XeroForce, the natural language custom AI agent builder powered by Xero OS, is currently in early access with general availability later this year. It features a new month-end agent alongside other pre-built templates for common workflows. This new agent will automate workflows that practices must tackle each month across each client, handling everything from reviewing document reconciliation status right through to manual journal entries for prepayments and amortization before providing customers with a complete account of its actions to review and accept.
Final thoughts from Matan Bar: “Our approach is Accountable Intelligence. If it can’t complete a task, it will defer to you. The system will learn from you, we do not expect AI to get everything right.”