Xero executing to plan

Xero, the billion-dollar Wellington-based firm, says its business plan is bang on track as the company continues to expand globally.

After announcing an expected annual loss of below $15m last week, the cloud-based accounting software firm continues to attract talent across the world.

Adding 188 new jobs in the 2013 financial year, the company says they will provide additional product development and operating capability, and expanded sales footprint in offshore markets.

"A vibrant small business ecosystem has evolved around Xero as it matures into a business platform with over 200 add-on solutions and over 6000 accountants, bookkeepers and trainers working with their customers on Xero," the company said in a statement.

"Over the period Xero continued its significant investment in building professional accountant tools connecting advisors seamlessly to their small business customers.

"This combined advisor and small business strategy and architecture has disrupted the accountant-side software market in New Zealand and Australia and has been a significant contributor to growth."

In addition to continuous improvements and broadening of the core Xero feature set, new longer-term strategic development projects are progressing well.

"Expected in calendar 2014 is delivery of US Payroll and Australian Tax features, which will further enhance Xero’s position in those markets," Xero said.

Regional activity:

In New Zealand most accountants offer Xero and the focus is on increasing customers per practice.

The company says it is steadily replacing incumbent providers and seeing strong take-up of its accountant-side software.

"Australia has experienced the greatest regional growth during the period and in March overtook New Zealand as the largest regional contributor to revenue," Xero said.

"This has followed substantial investment in the Australian team, which has grown from 27 to 71 over the year.

"A new Australian HQ was opened in Melbourne in December."

Outlook:

Xero anticipated the substantial opportunity as small businesses moved to the cloud.

"It takes a significant investment and many years to build a broad and global small business financial platform," the company said.

"Xero has proven the opportunity, its strategy and its execution ability.

"The incumbents continue to struggle with the complex transition of their businesses to the cloud model.

"Xero is now investing in its global sales capability and feels confident in achieving its objective of gaining a million paying customers."