Xero is the accounting software platform used by more than 4.2 million small business subscribers worldwide, with Australia and New Zealand representing its largest market. Founded in Wellington in 2006 by Rod Drury and Hamish Edwards, Xero pioneered cloud-based accounting for small businesses at a time when desktop software still dominated. Two decades later, it’s the backbone of the Australian small business financial ecosystem: and it’s now building AI into the core of the product.

The company in numbers

Founded: 2006, Wellington, New Zealand
ASX listing: XRO (S&P/ASX 200 component)
Revenue: NZ$2.103 billion (FY2025)
Employees: 4,610 (2025)
CEO: Sukhinder Singh Cassidy (appointed 2023, formerly Google and StubHub)
Chair: David Thodey
Subscribers: 4.2+ million globally
Offices: New Zealand, Australia, UK, USA, Canada, South Africa, Singapore

What Xero does

Xero is cloud accounting software sold on subscription. At its core, it handles invoicing, bank reconciliation, payroll, BAS preparation, and financial reporting for small businesses. But the platform’s strength is its ecosystem: over 1,000 app integrations that extend it into inventory management, job tracking, eCommerce, CRM, and more.

For Australian small businesses, Xero is particularly entrenched. It integrates directly with the ATO for BAS lodgement, with Australian banks via real-time bank feeds, and with major payroll systems. Accountants across Australia have standardised on it, which means switching costs are high and adoption is sticky.

Where AI enters the picture

Xero has been building AI into its platform for years, starting with bank reconciliation suggestions that learn from your coding history. In 2024 and 2025, the AI ambition expanded significantly.

Key AI features in Xero as of 2026:

AI bank reconciliation: Matches transactions to accounts based on historical patterns. For businesses with clean coding habits, this is largely automatic
Cash flow forecasting: Projects short-term cash position based on outstanding invoices, bills, and historical patterns: surfaced on the Xero dashboard
Smart invoice capture: Hubdoc (Xero-owned) uses AI to extract data from receipts and supplier invoices, eliminating manual data entry
Xero Analytics Plus: Business performance benchmarking and predictive analytics, comparing your metrics to similar businesses in your industry
Payroll AI: Auto-suggested pay runs based on employee records and pay calendars, with ATO STP Phase 2 compliance built in

In 2025, Xero began rolling out more agentic AI features: assistants that can draft responses to common accounting queries, surface anomalies in spending patterns, and flag late-payment risks. The direction is clear: less manual processing, more proactive insight.

The Small Business Insights programme

One of Xero’s underappreciated assets is its data. With millions of businesses running through the platform, Xero publishes the Xero Small Business Insights report: aggregated, anonymised data on sales growth, payment times, jobs growth, and wages growth across Australian small businesses. It’s one of the most granular datasets on the Australian SME economy available publicly, and it powers regular media coverage and economic commentary.

Xero in the Australian accounting ecosystem

Xero’s market position in Australia is unusual. It’s not just a software company: it’s effectively infrastructure for the accounting profession. Most Australian accountants and bookkeepers are accredited Xero partners, and many practices run their entire client base through the platform. This creates a network effect that’s hard for competitors to crack.

MYOB remains a significant competitor, particularly in mid-market businesses. QuickBooks Online has a presence but a smaller AU footprint. The Xero vs MYOB comparison is one of the most common questions from Australian business owners switching platforms: see our AI + Xero deep dive for more on using AI tools alongside Xero.

Rod Drury: the founder who built Australia’s accounting stack

Rod Drury co-founded Xero and served as CEO until 2018, overseeing its growth from a Wellington startup to an ASX-listed company with global reach. He remained on the board until 2023. Drury is one of the most significant figures in Australasian tech: his early bet on cloud software, at a time when banks and accountants were skeptical, reshaped how an entire profession operates.

Drury has remained active in the NZ and AU tech ecosystems since stepping back from Xero, and is a well-known voice on the region’s startup and digital economy.

Why Xero matters for AI in small business

Every AI tool built for Australian small business eventually has to answer one question: does it integrate with Xero? The platform’s dominance means it functions as the financial data layer for millions of AU businesses. As AI tools for bookkeeping, forecasting, and financial advice mature, Xero’s data and API become increasingly valuable: and increasingly contested.

The company’s own AI roadmap, the 1,000-app ecosystem, and the Hubdoc acquisition all point toward a future where Xero is less a bookkeeping tool and more a financial intelligence platform.