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Xero and U.S. tax company H&R Block form strategic alliance

Posted 4 years ago in Xero news by David Pollock
Posted by David Pollock
We’re super excited to announce today a strategic alliance with US tax company H&R Block.
H&R Block





As part of this alliance, H&R Block will exclusively promote Xero as its preferred small business online accounting solution. H&R Block has 11,000 branded locations nationwide, and will recommend Xero in the locations that sell H&R Block’s Small Business Program suite of services.

This alliance is part of our strategy to increase Xero’s brand awareness in the U.S. and expand our marketing and sales channels to help improve the financial lives of more SMBs.

Help us spread the news via our social sharing buttons, or take a look at our press release to learn more.


Kelvin Hartnall
April 30, 2014 at 2.18 pm

Congratulations, this is a huge win!!

April 30, 2014 at 2.20 pm

This seems like a very smart strategic partnership that will raise the bar on brand awareness in the US. Well done.

April 30, 2014 at 6.19 pm

If it has happened in the USA it means that it will happen here in Aus soon. Compliance only firms need to watch out…the commoditisation of the services we provide is happening at a great rate of knots…

April 30, 2014 at 9.23 pm

Excellent strategy guys. I believe Xero has had great success through word of mouth and your accountant’s word is very influential. I’m so very glad I was told about Xero by my accountant and was so impressed I bought stock in you guys. The more people that use the software the better it will get as they are still developing it.

(For all the other Xero believers out there, the stock is XRO on the Australian Stock Exchange. I encourage you to support the company that helps run your company and I must add I am not “connected” to the company…just a very minor shareholder and big fan)

April 30, 2014 at 11.07 pm

Excellent News! This would translate for more business in the USA.

Mike Block CPA
May 1, 2014 at 7.50 am

I believe that many CPAs and Chartered Accountants will find this disgusting. We accounted for 2/3 of new Xero business and Xero is now aligning itself with a company that has a long history of trashing us. I found it interesting that the first approving comment links to a software company website and the next two link to this Xero announcement, so no one even has a profile. Way to go Xero.

May 1, 2014 at 8.13 am

I won’t go so far as to say it is disgusting. It is definitely disappointing.

David Pollock
May 1, 2014 at 9.18 am

@Mike as we just discussed on the phone, I/we appreciate you expressing your point of view. Xero embarked on this partnership to help more US businesses find out about our solution. We absolutely recognize how valuable our existing Accounting Partners are (and have been) to our success. The hope is that as our brand awareness grows, all of our partners will benefit. The more businesses that know about Xero, the more they will be looking for Accountants who can help them manage their business on our platform. As for the source of the first few comments, there seems to be some bug, and I’ve alerted our IT team…

Louise Paglen
May 1, 2014 at 10.14 am

Good news! I hope more U.S. business means you will finally develop a feature that allows me to print a deposit slip. Old fashioned, but the way it’s still done in the U.S. by a lot of small businesses.

May 1, 2014 at 12.57 pm

This is very strange news. Frankly, I feel kind of ’embarrassed’ for Xero/U.S. accounting partners. U.S. C.P,A.’s MIke and Erin state their ‘disgust’ and ‘disappointment’ too. Seems like giving up long term gains for a short term ‘buzz’. Not impressed/not happy. (and my focus is on value added consulting so I’m certainly not ‘threatened’ nor is any other CPA/EA I know of… by H&R Block’s ‘tax prowess’ – give me a break). Finally, it might have been ‘nice’ if a representative sample of the Xero C.P.A. partner community here in the U.S. would have been ‘consulted’. It’s hard to believe any ‘real sample’ would have thought this was some ‘great’ branding strategy. Why do I feel I’m getting ‘Quickbooksed’?

David Pollock
May 1, 2014 at 3.10 pm

@Nate, we appreciate your feedback as well. As I shared with Mike, the hope is that all of our amazing Partners benefit from the growth of our brand in the US. Clearly our vision about how we get this ‘brand lift’ may not align with your own– however, please have no doubt that our goal is only to help grow the strength of the Xero ecosystem, including C.P.A.’s such as yourself.

Mike Block CPA
May 1, 2014 at 3.25 pm

Where was the Xero Advisory Council? Where was the due diligence (Google has 86,600 hits for “H&R Block” lawsuits)? This includes billions in class action and Attorney General suits, including one where a judge referred a Plaintiff’s attorney to the Bar Association, after overturning the sweetheart deal that H&R co-opted. It also seems Xero is AGAIN censoring us. My opposing comment was #4 and Erin’s was #5 (behind questionable approvals). We now follow two MORE questionable comments(all but one approval links to this post, while all but one disapproval links to owner sites). 1984 seems alive and well with Xero, contrary to supposed company policy. I am crying much too hard laugh.

Dennis Thompson
May 1, 2014 at 4.15 pm

It seems to me that this could be an opportunity to pick up some tax clients. I would think that if you establish a rapport with clients with your Xero consulting/bookkeeping knowledge, they would be more than happy to use your tax services for their business and 1040 tax returns. Besides, I believe that most people that go to H&R Block for their 1040 returns are not necessarily a good fit for me.

May 2, 2014 at 2.40 am

What exactly is being allied? A recommendation – promotion of Xero? Will this product be used in the stores? Will the data flow from Zero to Block for their customers?

David Rynne
May 2, 2014 at 11.21 am

Someone needs to come up with an accounting/bookkeeping marketing scheme similar to “We fix $10 haircuts” and apply it to H&R Block. Think about the opportunities….
Knowing the quality of what comes out of that franchised network I don’t believe this is good positioning by Xero. Time will tell.
Having said that, if any accounting firms or Virtual CFOs feel threatened by H&R Block and the commodisation of services, then it might be time to prune those customers out of your business, focus on those who are more valuable to you.

David Pollock
May 2, 2014 at 12.37 pm

@Marie, good questions. Essentially HRB chose Xero as their preferred accounting solution to offer their SMB customers– just like our existing accounting Partners choose Xero to service their own customers. HRB vetted Xero, and decided we were the right offering vs. other accounting packages. They will offer Xero in their stores that service Small Business customers (a subset of their 11,000 locations). We hope HRB’s choice will serve as a great validation of our solution– and reduce any issues you may experience around brand awareness when promoting Xero to your own customers. Per your last question re: data flowing to Block, I’m not sure I understand. Can you clarify?

Dawn W. Brolin, CPA, MSA
May 3, 2014 at 4.16 am

This partnership solidifies my perfect decision not to support Xero, ever. As a practicing CPA and educated business owner, why would I support a company that makes a move solely to support their own “branding” efforts? Shame on those practitioners who think for even a moment that this will benefit them. Wake up.

May 3, 2014 at 4.20 am

As an accounting professional that focuses on Intuit products, this doesn’t make any sense. There’s no book to tax or integration with Xero? It’s just telling the SMB to use a product.

There seems to be no benefit to anyone other than Xero, in getting their name out. Which doesn’t surprise me, since I’ve yet to see any messaging from them about how they’re helping SMBs or the accountants that support them. This move seems to be right in line with that.

I can’t quite wrap my brain around how H&R employees will be recommending *any* accounting software to clients. Will the H&R employee know enough about how the business runs to make that recommendation, in the short time they see the customer? Will they be doing the needs analysis? Assisting with implementation? Training?

I say: As a QuickBooks expert and technology consultant, this sounds great for me!
I’m hoping to get all the dissatisfied customers that were just randomly told to use… something… by a tax preparer that wasn’t hired as technology consultant or has any idea how to set up back office procedures. This might just be a new demographic to which I can market.

Thanks Xero, for helping me build my QuickBooks consulting practice!

Mike Block CPA
May 3, 2014 at 7.32 am

I understand this from an H&R Block standpoint. Intuit’s QuickBooks and Quicken feed its TurboTax. Therefore, H&R Block bookkeeping (financial) offices (which are a very small fraction of its total offices) should not use those accounting programs to strengthen Intuit, one of their biggest competitors. Xero also already feeds H&R competitor TaxAcct, plus professional tax packages from Intuit (Lacerte) and CCH (ProSystem fx Engagement). Therefore, Xero was the best accounting package for H&R.

From Xero’s standpoint, the alliance offers many new avenues for publicity. The very low rates that H&R pays, coupled with its very high rate of staff and client turnover, also should mean there will be many new clients for small business accountants. On the other hand, many professional accountants will now have to consider whether we want to be seen as effectively marketing H&R Block software. We already know that an H&R merger, with a large CPA firm, was a total bust. The more I look at this, the more disgusted I get.

Mike Block CPA
May 3, 2014 at 7.38 am

You can, of course, expect a Xero to H&R Block tax interface very soon.

Jamie Sutherland
May 3, 2014 at 9.44 am

This is Jamie Sutherland here. I’m the president of Xero in the U.S. I wanted to address some of the questions about Xero’s alliance with H&R Block.

First, H&R Block has selected us as their cloud solution for their small business clients. They will offer Xero in their locations that provide small business service. They selected us after an extensive vetting process and we are pleased that Xero was chosen to meet the needs of their customers.

Second, we don’t discriminate on who and who shouldn’t use or promote our software. There are several other franchise networks in our partner ecosystem that are also using our software because they believe it is the best solution for their small businesses.

And third, we cited the brand lift as important as we believe it will benefit everyone in our network. Part of our strategy as we make headway into the US is to associate with companies that have widespread brand awareness. The fact that a long-standing public company like H&R Block has chosen Xero as the best solution for their small business customers helps Xero become better known in the US.

@Dawn and @StacyK, we respect that you are aligned and/or compensated by Intuit but I’d expect you would agree that competition and innovation is good for the profession. We believe we’re having a very positive effect on the industry. After the H&R Block announcement, we’ve been contacted by many accounting firms wanting to understand more about Xero. The US market will be much better served when we have two strong competitors.


Jody Padar
May 3, 2014 at 1.41 pm

This news is good for Xero…they have an opportunity to sell more software. It’s good for CPA’s who already use Xero from the standpoint that if they get more users they can improve their product faster and everyone will be happier, including the woman above who wants to print her deposit slip!

CPA’s if you think your competition is H&R Block you have other issues to worry about. Also, I am not sure how many of their premium offices will have the skill set to manage the product, but many of them are EA’s so they will learn and most of those offices are open year round so it should work for compliance, a few years ago they partnered with Outright and they were purchased by Godaddy.

IMO, I think there is a lot of misdirected anger here. I think the anger should be toward our own profession, including @Dawn and @StacyK ‘s anger. Our profession’s lack of adoption encouraged Xero to partner with a Franchise because, yes because, regular small practice CPA’s are not adopting any cloud technology fast enough. Even the Intuit Groupies are still fighting cloud adoption with their peers.

For me the frustration is once again H&R block leading way not from a professional standpoint but from the use of good tools, ie practice management standpoint. CPA’s fought tooth and nail and didn’t want to Efile until it was mandated 20 years later and only adopted because the IRS forced them too. H&R block efiled from the beginning. There was actually an even bigger coup this week from H&R Block that I think CPA’s should be more worried about. H&R Block just purchased the cloud technology of Beyond415. A really cool IRS notice response template technology that has been around for 3 years or so but once again CPA’s were slow to adopt it. Quite honestly from a tech standpoint I think H&R Block is using the right practice management tools…Its just really hard and sad to see our professional peers lagging so far behind.

And until our peers move faster we are somewhat stuck because adoption is what pushes the technology to be better. So go tell a friend to start using the cloud because I need better and more complete cloud tools.


May 4, 2014 at 1.34 am

Padar – not sure where you get “anger”.
I’m quite happy about this announcement.

Have a great weekend 🙂

May 4, 2014 at 2.02 am

I am very happy too. The more alliance with other companies the merrier, the better for Xero in the future. Go Xero USA!

Dawn W. Brolin, CPA, MSA
May 4, 2014 at 3.21 am

Anyone that knows me, even a little, knows that I don’t actually get angry about anything, I am possibly one of the coolest people you could know (a little bold but fair). I agree that competition causes growth and that is awesome for everyone. Like @jodypadarcpa, I agree that peers need to get it together and move to the cloud, and we NEED complete cloud tools!

My comments were simply for professionals to be careful about your alliances. Make sure you know what you are getting into and how it is going to affect you, but more importantly your clients. It is SIMPLE to agree that large box tax shops are only that, they are not qualified consultants, typically no formal education and looking for a part-time gig. It’s just my opinion, a well educated one that I have rightfully earned.

Xero made a great move for it’s company, bravo. I was showing compassion for committed Xero accounting professionals who could be affected by the alliance. Shame on me for caring about my peers…

Naga Kota
June 5, 2014 at 2.52 pm

I have the same question as Marie. “Will the data flow from Xero to H&R Block for their customers?”

Is there integration so that the SMB users enter their data in Xero – their accounting software and then by means of an import or export function, does the data get into H&R Block’s database? Just like we get data from different financial firms into our tax software? Does this happen real time or whenever the business chooses?


David Pollock
June 11, 2014 at 9.26 am

Hi Naga, at this point the functionality you are looking for is not part of the partnership with H&R Block. As you know, currently trial balances can be exported into a number of tax software packages, including Lacerte, CCH and Tax Act. If this changes, we will definitely let all of our Accounting and Bookkeeping Partners know!

March 21, 2015 at 12.16 pm

I’m a new small business owner of a music production company in need of accounting software. I’ve narrowed my search down to choosing between Quickbooks and Xero. As a H&R block customer for years – I’m hoping this alliance will streamline my data flow. Is it possible to download Xero records to my H&R Block online tax preparations? I use Paypal for e-commerce, and a combination of Square and Paypal for point of sale transactions.

David Pollock
March 25, 2015 at 6.15 am

@Shane, at this point it’s not possible to do what you suggest. Hopefully we’ll be able to make this happen in the future!

August 6, 2015 at 8.01 pm

Is H&R Block tax services are available in India too? Can you provide website link for India?

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