A digital finance and accounting organization is one that uses software to enhance efficiency by eliminating manual operations and automating workflows, improving financial data quality. This is especially relevant to small to midsize organizations that need to minimize administrative overhead yet still have financial controls and operational visibility to achieve and sustain profitable growth. A continuous accounting approach can streamline tasks and processes, reducing time spent on repetitive tasks, ensuring data quality and providing a focus on financial outcomes and business performance.
Xero HQ is the overall accounting software that provides a central hub for all client and practice data, activities and reporting. A recent update in September of 2021 allows for more control over the creation of clients within Xero HQ, meaning that it is even easier to connect a client to an existing organization. Xero Analytics helps organizations look ahead by seeing future cash flow, checking financial health and tracking metrics. Its more advanced Xero Analytics Plus, introduced in July of 2021, provides the organization’s forecasted position to help guide strategic and financial decisions. Xero multicurrency allows for transactions in all currencies, enabling instant conversion and visualizing how currency markets can affect cash flow and profit.
Xero and its products provide a comprehensive approach to supporting a small to midsize business beyond keeping the books. In a small organization, they need to evolve and manage their business effectively to ensure growth, as well as efficient back-office operations by automating and streamlining manual efforts for accounting and finance across the organization.
Xero expanded support in 2021 for analytics, helping interconnect what is often managed imperfectly in stand-alone spreadsheets. Most small to midsize business executives need immediate actionable intelligence to know where their organization stands from a financial standpoint because they are typically undercapitalized and have limited access to financing. And because they often are not financial experts they benefit from built-in intelligence in analytics and reporting.
Beyond its operations in Australia, New Zealand and the United Kingdom, Xero has been rapidly expanding its largest growth market — the United States — by increasing partnerships with banking, financial institutions and CPA firms directly involved with small organizations. Xero’s introduction of its application marketplace — where third-party software and service providers extend and complement its efforts — includes areas like commerce, inventory, payments, payroll and time tracking. The streamlining of business processes that interface to accounting and finance creates less problems with future errors as well as saving money and time. If Xero expands its support for the roles using its software rather than focusing primarily on capabilities, it will create additional potential with small organizations.
Xero is striving to be a more comprehensive partner to small businesses through its support of work and functions that interface to accounting, but also where it can expand its efforts in time and work conducted. While Xero’s advancements have been more centered to automation than intelligence, it is rapidly expanding its support for more forward-looking financial needs. Small organizations looking for a more refined continuous accounting approach that centers around digital finance should examine Xero. While the brand is not well known in the U.S. versus others offering small-business cloud-accounting software — like Intuit and Sage — it has brought a digital finance and continuous accounting approach to its customers. Xero’s work to bring a unified approach for digital finance is essential and can provide small organizations an opportunity to focus more on business than accounting efforts.