We are at an inflection point – advances in tech are profoundly altering the economic and social order. This presents both positive opportunities and potential pitfalls. The accounting industry is frequently held up as one of the industries most likely to be negatively impacted by AI and automation.
In her opening keynote at Xerocon Atlanta, Xero Americas’ President, Keri Gohman, told attendees, at this critical juncture, technology companies have a distinct responsibility to build platforms that are a force for good.
“At Xero, we believe that getting it right for our customers means taking a ‘human technology’ approach where we aggressively push forward with technological innovation, while also working to help our customers and partners overcome the tensions that inevitably accompany periods of change,” Keri told attendees.
At Xero, we’ve been at the leading edge of building technology that has disrupted the accounting industry. And yet, we’ve always thought of accountants as our number one customer, partner and ally. We’ve always believed that new technology could be a force for good for accountants, their small business clients, and the broader economy. Keri told attendees that, over the next two days, the goal was to come together as a community to see this vision realized – to help each other grow and find new ways to help small businesses thrive.
Why DIY?: Xero’s unique approach to accounting software
Over the past few years, the rise of the digital world has threatened to spell the end for many industries, businesses and professions. In her keynote, Keri highlighted a few unlikely past examples of jobs and products where fears around digital disruption turned out to be unfounded.
“Believe it or not, I believe that LEGO is the perfect analogy for where the accounting industry has been, where it is today, and where it is headed,” Keri said.
With the rise of the digital generation, she continued, many predicted they would never want to play with plastic building bricks. As it turned out, rumors of LEGO’s demise were greatly exaggerated.
“It turns out that in a world where everything was becoming digital, people actually longed for real-world, tactile interactions,” Keri said. “Far from going bankrupt, LEGO has seen a resurgence. There are now 86 Lego bricks for every person on earth, with around seven sets sold every second.”
Like LEGO ten years ago, the accounting industry is held up as one of the industries most likely to be negatively impacted by AI and automation. In the same McKinsey study that predicts that by 2030, as many as 800 million jobs could be lost worldwide to automation, it is hypothesized that large amounts of labor could be displaced in accounting, and back-office transaction processing.
Other accounting technology companies are playing into this by prioritizing technology alone. They are telling small businesses that DIY is the way to go because AI and machine learning eliminate the need for an accountant. Keri told attendees that, at Xero, we are taking a different approach.
Not just another number
We believe in the power of “human technology”, Keri explained. That means taking advantage of the latest advances in technology, while ensuring the priority is on enabling the unique things that only human interactions can deliver, Keri elaborated.
“Our human tech approach is very different from what you see from other accounting tech companies,” Keri said. “They want to exploit advances in AI to build DIY solutions for small businesses. Our ‘human tech’ approach will always prioritize the role you play as the most trusted advisor to small businesses.”
“We know that small businesses are more successful when they work with an accountant. At Xero, we are using technology like AI and machine learning to build a platform that enables accountants to work even more closely with their small business clients – further increasing their odds of success.”
Rather than building one-size-fits-all software for your practice, Xero’s ‘human tech’ approach means everything we build will be designed to adapt to your needs wherever you are on the journey, Keri said. At Xero, we don’t want our accounting partners to feel like just another number – our ‘human tech’ approach is designed to solve your specific challenges.
The power of our products, partners, platform, and people
At Xero, we are using advances in AI and machine learning to amplify the impact accountants can have. Only half of U.S. small businesses survive past year five. Our internal data shows that 85% of small businesses using Xero make it past the five-year mark, and those who are connected to an accountant grow net profit 23% faster. We know that accountants are crucial to the success of small businesses and our economy. Using the latest technology, we’re solving pain points today and setting you up for success in the future, by combining the power of our products, partners, platform, and people.
Keri touched on the next step for the Xero platform – looking beyond “code-free accounting” to a new era of “connected accounting.” Code-free accounting is all about automatically categorizing data. That means the individual building blocks are there – in the forms of bank feeds and data from our rich ecosystem of more than 600 app partners.
“Connected accounting is all about making it possible for you to take those building blocks and create something beautiful for your small business clients,” Keri explained.
Keri took a moment to spotlight Xero’s ongoing work partnering with banks – announcing a new partnership with Citi – a top-tier U.S. institution with more than three million small business customers. Foundational to connected accounting, partnerships like these are the next step in delivering on that vision.
Accountants will always fuel small business success
Keri shared the results of a recent survey conducted by Xero in order to better understand how small businesses think about new technology. The results showed that, despite advances in AI and technology, 72% of small businesses still want access to an accountant. This demonstrates that the vast majority of small business owners will continue to rely on the human advice of their accountant.
The survey results further underscore the simple truth that accountants are the most trusted, and frequently used, source of advice for small businesses – beating out peers, friends and family, online communities, lawyers, consultants, and financial advisors. The survey also found that two-thirds (65 percent) of small business owners find the advice provided by their accountant very, or extremely, beneficial to their business. Eighty percent of small business owners plan to continue working with their accountant over the next 12 months.
“This data shows that advances in AI and automation are not the doomsday scenario for the accounting industry that is commonly portrayed,” Keri elaborated. “Instead, this is a massive opportunity for accountants to play an even bigger role in helping their small business clients succeed. Technology alone will never be the solution; technology combined with people will be.”
This is a pivotal moment for the accounting industry. Keri closed by telling attendees that, today, everyone has an opportunity to embrace a new era and get to the head of the line when it comes to defining where the industry goes from here. And Xero is here to help you at every step along the way.
“We are committed to building the very best human technology platform,” Keri said. “But only by working in partnership with you can we achieve our ultimate mission of rewiring the economy so that more small businesses thrive. The coming days, months and years will be all about working together to make it happen.”