Xero rolls out new tax manager, bill payments and e-invoicing solutionsby
Kiwi cloud accounting platform Xero has announced a cluster of new features for its UK users, including a tax manager to view clients’ obligations in one place, a tool to approve and pay bills without leaving the system, and an e-invoicing ʻreceiveʼ capability.
To coincide with its UK roadshow series, Xero has announced a series of updates that move the cloud accounting system closer to what the company calls a “vision for a more seamlessly connected practice experience”.
These include a new way to view clients’ consolidated tax data, an on-platform bill payments tool, the ability to receive e-invoices, and a focus on creating a ‘single client record’.
Following the pandemic, Xero received criticism from some quarters for a perceived lack of product development. However, speaking with AccountingWEB at the Bristol event, Xero UK managing director Alex von Schirmeister was confident that the tools announced during the show, and those in development, would allow Xero firms to stay ahead of their competitors.
In its latest set of financial results published last week, Xero revealed it had hit one million UK subscribers (from a global total of almost four million). The document also flagged “subdued” subscriber growth due to the postponement of the government’s Making Tax Digital for income tax plans.
The new tax manager in Xero HQ (the platform’s central hub for managing clients, staff and queries) has been high on the agenda for many of Xero’s accounting partners.
Rather than having to view clients’ tax data on three separate dashboards for VAT, company accounts and personal tax, the feature allows accountants and bookkeepers to view their clients' tax obligations in one place.
The company is also currently testing a connection between the new tax manager tool and Xero’s practice management solution (XPM), with the aim of allowing accountants and bookkeepers to manage their work and obligations in one place.
Speaking at the Bristol roadshow Gareth Price, Xero Tax’s product manager, stated that the tax manager tool offered a single location to search, filter and surface what needs to be done first, potentially streamlining job tracking and prioritisation. The dashboard offers the ability to sort by type, filing status, client name, and submission due date.
Xero also confirmed its tax tool now supports all major self assessment boxes with the addition of SA106 and SA107 Trusts. Representatives also confirmed the developer was committed to building partnership tax into its product.
The new tax manager tool is available free to all accountants and bookkeepers on the Xero partner programme.
On-platform bill payments
Accounts payable technology is currently a hot topic in accounting tech circles, with the likes of Apron and Nook securing investment for developing tools in the area.
Xero used its UK roadshows to boost its credentials in the payments arena with a new on-platform bill payments tool that offers a secure way to manage, approve and pay bills without leaving Xero.
Small businesses and their advisers can now set up direct bank transfer as a payment method for bills, and use Open Banking to securely batch pay multiple bills from their bank account.
The move, enabled via a partnership with financial services provider Crezco, offers the potential for UK businesses using a UK bank that supports Open Banking to complete their end-to-end accounts payable process all in Xero.
Eligible UK Xero customers are able to register for the bill payments beta now via this form, with the new feature being made available on 27 November 2023.
In an update posted at the end of October, Xero also announced that its existing partnership with payments provider Wise (known as Xero Pay with Wise) will be discontinued on 26 February 2024.
E-invoicing ʻreceiveʼ capability
Xero also announced that it has become “the first major small business accounting software” to launch electronic invoicing (or e-invoicing) in the UK, starting with the ability to receive e-invoices.
E-invoicing is the exchange of invoice documentation between a supplier and a buyer in an integrated electronic format – not simply emailing a PDF invoice to a supplier.
Xero’s e–invoicing solution uses the Peppol network to enable the delivery of electronic invoices directly to accounting systems. Customers can now register to receive e-invoices in Xero, with bills coming straight into the platform, removing the need to create paper or PDF invoices, alongside the process of scanning, emailing, and manually entering them.
In a presentation at the Xero Bristol roadshow, the company’s head of UK product compliance Stuart Miller outlined the benefits of e-invoicing, including the ability to directly exchange data between different accounting systems and tools without manual intervention, thanks to standardised formatting.
“It’s a cost-saving as it takes less time to process them, it’s more efficient and accurate as the data comes in exactly the format the recipient is expecting,” said Miller. He went on to add that it can also reduce invoice fraud by removing the risk of attachments being intercepted and altered.
Hailed as the next billing revolution, e-invoicing is part of a key pillar in the EU’s VAT in the Digital Age reforms. However, as reported by VATCalc CEO Richard Asquith, the implementation date for mandating e-invoicing across the EU has been delayed from its current schedule of 2028 to 2030, or even 2032.
While e-invoicing is mandatory for UK government agencies and its suppliers, the UK has not adopted the format more broadly. Following the UK’s exit from the European Union it is not committed to mandating it more widely, and the current government has given no indication about its position on e-invoicing.
Single client record
Xero was also keen to emphasise its transition to what it calls ‘the single client record’, a central database that houses all client data for XPM and Xero HQ for accounting and bookkeeping practices.
A press release on the subject stated that the single client record “helps give practices confidence that their data is consistent and accurate and that teams within practices are all working from the same information.”
All new accountants and bookkeepers who sign up to XPM and Xero HQ will be automatically on the single client record, and existing customers can now transition.
“We’ve spent a lot of time listening to advisers and what they need in their practice tools. This includes reducing the need to switch tools during their workflow, as well as removing duplicates and double handling of data. What’s key to this is ensuring there is consistent and accurate client data between our practice tools, and delivering the single client record is the next step in achieving this vision,” said Luis Sanchez Castillo, Xero’s general manager, product.