Small business owners are experts in their craft, but they’re often forced to become experts in dozens of other areas, especially finance. From accounting and payroll to payments and cash flow, the complexity of managing a business is growing. How can software platforms ease this burden rather than add to it?
On this episode of the SMB Tech Innovators podcast, Andrew Kanzer, Managing Director for North America at Xero, joins us to discuss how Xero is tackling this complexity. We explore their “customer-backed” approach to building an open ecosystem, the shift from disjointed tools to an integrated “cockpit” for small businesses, and how practical AI can amplify, not replace, the crucial human element of accounting.
Key Takeaways:
- Open Ecosystems are a Differentiator: Instead of mandating a specific workflow, Xero allows small businesses to customize their tech stack with over 1,000 connected apps, letting them use the tools that work best for their unique business.
- Businesses Need “Speed and Certainty”: A key lesson from fintech is that small business owners don’t care about bells and whistles if the core product doesn’t just work. They need tools that are fast, reliable, and take work off their plate.
- The Future is an Integrated Cockpit: The most critical jobs for a small business include accounting, payments, and payroll, all critical components of managing cash flow. The goal is to unite these functions in one platform to provide a single, intelligent view of the business.
- Practical AI as “Tech as a Teammate”: AI should be an amplifier, not a disruptor. Tools like Xero’s “JAX” are designed to handle administrative work, freeing up accountants to have deeper, more strategic advisory conversations with their clients.
- Human Connection Remains King: In a world of bots and automation, the value of human connection is a key differentiator. Building real, personal relationships with customers and partners is crucial, especially in the personal world of finance.
- Solving Real Problems: The best advice for innovators in fintech is to focus on solving real, practical problems for the customer—a concept of “micro-innovation” that leads to constant improvement.
Listen to the podcast or read the summary below.
Building an Open, Adaptable Platform
Xero stands out in a crowded accounting tech space. For Andrew, it boils down to an “open ecosystem.” He points out that it’s easy to talk about small businesses as a single group, but every business is a universe unto itself.
Xero’s philosophy is to avoid forcing small businesses to adopt a new, rigid workflow. Instead, with over 1,000 connected apps, the platform allows accountants, bookkeepers, and business owners to build a tech stack that fits their specific needs, whether it’s for time scheduling or another niche function. This adaptability, traditionally reserved for enterprise-level clients, is now accessible to all.
A Lesson in “Speed and Certainty”
Andrew shared a powerful lesson from his 20-year career in fintech, including time at PayPal and in small business lending. He referenced a study where 2,000 small business owners were asked to compare various payment companies. The result? They couldn’t tell the difference.
“They basically said, ‘You all do the same thing.’… what it boiled down to was they just wanted it to work. It had to work really well, and it should be relatively fast. It should make their life easier. So just speed and certainty for small business was a lesson, which is, they already have to be expert on so many things… How can we take something off of their plate and just make it work… not another thing to manage.“
— Andrew Kanzer, Managing Director, North America at Xero
This principle—designing products from the customer’s perspective—is a core tenet of Xero’s strategy as they move to integrate payments and payroll directly into their accounting software.
From Accounting Software to a Business “Cockpit”
The future of fintech, Andrew argues, lies in bundling the most critical jobs to be done. Xero is focused on three of the largest: accounting software, payments (through the acquisition of Melio), and payroll (through their partnership with Gusto).
The goal is to create a single cockpit for a small business, where these three essential functions work together intelligently. This integrated approach allows Xero to be a true partner to the business, not just a vendor selling a single tool.
Practical AI as “Tech as a Teammate”
While “AI” is a buzzword everywhere, Andrew emphasizes Xero’s “customer-backed” and practical approach to its implementation. In fintech, he notes, AI can be scary or overwhelming. Xero’s aim is to make it an amplifier, what he calls “tech as a teammate”.
For example, their AI tool “JAX” can help aggregate information and answer financial questions in seconds, rather than the 30 minutes it might take a human to comb through data. This doesn’t replace the accountant; it frees them from the administrative gathering phase. This allows them to spend more time on “deeper relationship building with their clients” and become a more strategic partner, discussing what the data means for the business’s future, not just what it says about the past.
Don’t Forget the Human Connection
In an industry racing toward automation, Andrew firmly believes that human connection is more important than ever. He notes that finance is deeply personal for small business owners, and Xero leans into this as a competitive differentiator.
He shared a story of a customer who was “shocked” that after switching to Xero and having implementation trouble, they were “able to call us and talk to someone… and actually problem solve instead of just waiting in a queue.” This human component, powered and scaled by AI, is central to building a loyal community and a platform that truly serves its users.
If you’d like to learn more about Xero and how they are building a full-service financial platform for small businesses, visit xero.com or connect with Andrew on LinkedIn.
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