Anna Curzon, Xero's Product Manager, reflects on the accounting software company's growth in the UK market over the past year.
About the author Anna Curzon, Product Manager at Xero.
What were Xero's highlights or views this year?
In 2019, Xero focuses its product innovation on delivering fast and accurate data, streamlined tax and compliance workflows, and deeper insights to help our customers not only understand their current data, but also enter a new era. where we can predict what will happen in the future. We want to create products that will stand the test of time but also support our future growth. Therefore, we are constantly balancing solving today's problems with building products and features that will allow our large customer base to benefit in the long run. In the UK, these are some of our main product innovations:
- From April 1, companies that exceed the VAT threshold must file their taxes digitally. We worked closely with HMRC to get SMEs and their advisers up and running and launched our Making Tax Digital functionality at no additional cost.
- Another area that we have focused our attention on is how we can receive payments and facilitate payment processing. This year, we launched deep integration with Stripe to help small businesses get paid faster, and we recently launched Pay with TransferWise, to allow businesses to manage and pay invoices more transparently.
- We have also made it easy to prepare card or direct debit payments. The seamless integration now makes it easy for small businesses to accept credit card payments, as well as debit or Apple Pay payments through Stripe, or direct debit payments through GoCardless, making them easier to accept. help you get paid faster.
How could Xero become the market leader in the UK in 2019?
We are fortunate to have experienced continued strong growth in the UK for a decade. We invested heavily during this period to develop what is now a significant company. Being built specifically using cloud services has helped us immensely, and by offering a different way of doing things, subscribers love Xero's smarter, smoother and more efficient way of managing their finances. Our accounting and bookkeeping partners have built entire businesses around Xero and our ecosystem as Software as a Service (SaaS), which is amazing. This means we have built strong relationships and advocates in the accounting industry, helping us attract more small businesses to the cloud. But we don't want to be complacent. We are constantly looking to the future and innovating our products to support SMEs and their advisers. In this context, we listen carefully to the needs of our customers who have invested so much time and resources in Xero.
How has Xero benefited the government's rollout of Making Tax Digital?
The launch of Making Tax Digital (MTD) has meant that many companies not yet using cloud-based MTD-compliant accounting software have now made the switch. You don't necessarily have to be in the cloud to submit your application to HMRC digitally, but this is certainly the most efficient and fastest solution. Cloud-based platforms like Xero mean less paperwork and fewer errors, but more importantly, they give businesses real-time insight into cash flows. Since the rollout of MTD, we have certainly seen an increase in the number of registrations and interest in the products.
Do you see the demands of your UK customers evolve as financial activity plugs in?
Traditionally, the relationship between the accountant and the small business has been a long-term, local relationship, focused on tax accounting. Whereas for big companies, with bigger teams and more resources, they have had the luxury of looking beyond tax returns. As financial activity moves to the cloud, we will see more and more small businesses move away from just asking for help with their tax returns. They want more access to information that will help them make decisions about the growth and direction of the business. This demand for data-driven decision making is what will drive the next generation of online financial software and fintech and level the playing field between businesses large and small. SMEs and accountants are also looking for technology-focused partners to help them grow their businesses. With this in mind, we are also working on the extension of the Xero platform. We already have over 800 professional apps integrated with our customers who are increasingly relying on the scale and power of our ecosystem to support growth.
How does the UK compare to other markets in adopting new services and solutions?
Globally, in markets such as the UK, we estimate cloud accounting penetration to be relatively low at around 20%, and in many cases, we believe it is much less than that The digitization of tax and compliance (via Making Tax Digital in the UK), continued disruption and innovation in financial services, and the broader adoption of cloud storage technology all contribute to the demand for cloud accounting around the world. and also drive decision-making. in the United Kingdom. In the AU and NZ markets, cloud accounting penetration is much higher, estimated at over 50%.
What does Xero have in store for the next 12 months?
As a growing company, Xero continually tests and revises its strategy. In the next 12 months, we are focusing on three strategic priorities; pilot cloud accounting, build the platform for small businesses, and build on global scale and innovation. Over the next year, Xero will bring comprehensive and holistic compliance to its clients through Xero Tax as a 100% cloud-based tax preparation tool. This will give UK accountants a smarter and more transparent tax preparation workflow. We have completed our integration of Hubdoc into the Xero platform, which is an integral part of our vision for data automation. All customers will now have access to this world-class technology that captures invoice and receipt information, eliminates manual data entry, and makes bank reconciliation easy. This feature saves them considerable time where they can focus on working on the business instead of doing it. We believe that data capture tools like Hubdoc play an essential role that all small businesses and consultants need to succeed, with ever-new government requirements for digital reporting and record keeping. We wanted to make this technology available to all of our customers because of the impact the time saved can have on their success. We're also working on expanding the Xero platform into areas like financial technology, where we see huge growth potential in services like payments and lending.