15. Xero Confidential
Bank feed Overview
Direct feeds enable bank statements to be automatically imported into
Xero - ensure Xero is always up to date.
Removes the need for small businesses to download and upload bank
transactions into Xero.
Enables SMB’s to reconcile their bank accounts earlier and easier giving
them a better understanding of their cashflow position which is essential
when making a lending decision.
What?
Why?
Steps?
User
Authorisation
Link Bank
account to
Xero Account
Import financial
transaction data
Easy connection is essential to drive 2 way data flow with the bank
19. ● Schedule payments and batch pay suppliers
● See what bills are due for payment
Paying Suppliers
Pay suppliers directly from primary
bank account with no credit or
overdraft risk
20. ● Employee pay made easy
Paying employees
Pay employees directly from primary
bank account with no credit or
overdraft risk
21. Reimburse employees for business costs
Facilitate snapping photos of receipts as they happen and attach
them to expense reports.
Expenses
23. Pay Employees
Auth in a single flow
Status updates
Pay Bills
Modern User Interface
Enhanced Security
V2V1
24. Select bills, employees
or expense claims in
Xero and click Make
Payments
Bank account owner
confirms payment
details
Bills paidBank account
owner authenticates
against the bank
25. Select bills, employees
or expense claims in
Xero and click Make
Payments
Bank account owner
confirms payment
details
Bills paidBank account
owner authenticates
against the bank
26. Select bills, employees
or expense claims in
Xero and click Make
Payments
Bank account
owner authenticates
against the bank
Bank account owner
confirms payment
details
Bills paid
27. Bank account owner
confirms payment
details
Bank account
owner authenticates
against the bank
Select bills, employees
or expense claims in
Xero and click Make
Payments
Bills paid
Bank payment status
displayed within Xero.
41. ● Include Xero data in app & IB
● Add value to banking data with
accounting data
● ie bank balance along with top 5
receivables & payables
● Opportunity for simple cashflow forecast
● Bank & Xero working together to help
customers
Xero Data
43. Our vision for changing the lending landscape
Easy access to capital
Full financial picture Qualified lending discovery Lower the cost to serve
Feature coming soon
44. Xero Lending E2E
For small
business
owners and
accountants:
For lenders:
Discovery Application Underwriting Monitoring
Help me identify my
credit need and find the
right lender for my
situation
Save me time by making
it easier to complete
loan applications &
share financial data
Help me get my loan
approved faster and
money into my account
sooner
Simplify post-origination
compliance for me
Build, maintain, and
grow customer
relationships
Lower the friction in the
application process to
drive up completion
rates
Obtain and make a
decision based on a full
picture of the business
Prove the use of capital,
be proactive, and
standardize covenant
monitoring
45. Evolve with Xero
Discovery Application Underwriting Monitoring
Marketing
campaigns
Paper application
Manual
underwriting
Manual audit
In-product
Discovery
Online
application
Data-driven
underwriting
Automated audit,
new services
Before
After
46. Lender
Financial Data
Organization Data
User Authorization
Account
Transactions
Application
Decision Engine
Fraud Engine
Authentication
Servicing System
Financial Data
Assurance Data
Monitoring System
Full support throughout lending lifecycle for the lender
Access token
Contact info, tax ID,
address
Net income, receivable
size, financial ratios
Reconciliations, journals
Disbursement,
repayments, interests,
expenses
Receivables, updates
47. Security
Protect client data with industry standard OAuth flow
Ease
Provide quick and frictionless application process
Speed
Pull rich financial data in seconds
Simplicity
Build a #beautiful feedback loop to Xero
Visibility
Monitor post-drawdown activities or metrics
Validity
Uncover accounting manipulation
Application
Decision Engine
Fraud Engine
Authentication
Servicing System
Monitoring System
Benefits to the lender
49. Use Cases
● Categorization
○ Transaction context
○ Merchant context
○ Receipt image
○ Contextual data
○ Manual entry - swipe left for business; drop down categorization/ split
● Real time workflow
○ Instant notification to Xero app
● Reconciliation
○ Invoice information
○ Spend money transaction
51. Insider’s guide to Xero
partners
(accountants and bookkeepers)
INTERNAL + PARTNERS ON NDA ONLY
52. Expert use and trust
Source: Xero Small Business Market Study, Jul 16,
n= 750
USE
TRUST
BUSINESS
ADVICE
DON’T USE
DON’T
TRUST
ACCOUNTAN
TS
66% Use
71% Trust
19% Use
61% Trust
LAWYER
S16% Use
48% Trust
IT
CONSULTANTS
18% Use
41% Trust
BANK
MANAGER
5% Use
74% Trust
BOOKKEEPER
S
7% Use
57% Trust
BUSINESS
CONSULTANTS/MENTO
RS
Accountants standout as the most trusted
source of advice for small businesses
53. We’re at the centre of a ‘once in a lifetime’
change
Annual or quarterly
stop, drop and go - relationship
bill by the minute
Realtime - trust partner
anytime access to business and tax
advice fixed monthly fee
FROM TO
54. Here’s a close-up. Notice how they are
selling and delivering bundles of services to
SMBs.
55. While accounting firms get paid for
compliance, Xero partners provide much
more to their clients
Traditional firms still largely
focus on tax compliance
Xero partners are finding
small businesses eager to
buy additional services
Complianc
e
Financial forecasting and
analysis
92%
Apps advisory and support50%
HR/people advisory and planning30%
Earn $5,000 per year per client
Provide multiple service
experiences per week
Strong double-digit revenue growth
Silver, Gold and Platinum Xero
partners
Earn $1,800 per year per
client
Usually provide annual or
quarterly tax filing services
Single digit revenue growth
Business success partner
Finance
s People
Apps
2016-7 Xero partner benchmarking series with 2,000 participants
1
1
56. Xero increases their total opportunity significantly. Xero
partners are often constrained only by their ability to hire
staff
Xero partners
Business success partner
Finance
s People
Apps
Total revenue
opportunity from
compliance across
5 million clients.
$9 billion
App advisory, setup and support
services
Financial advisory services
HR / people /
succession
advisory
services
$25billion opportunity
ANNUAL/QUARTERLY SERVICES
REALTIME SERVICES DELIVERED AS AN ESSENTIAL PARTNER TO THE SMALL BUSINESS
2016-7 Xero partner benchmarking series with 2,000 participants1
1
57. > 27,000 partners
serving 5.7 million clients
594,000 times per week they’re
interacting with clients
Our Xero partner network routinely
engages more small businesses than any
other network
over 1 million of their clients are running on Xero1
1
58. Small businesses are moving at pace to Xero
advisors to gain realtime services and support
small businesses
switched accountants
already in 2017*
63,000
* January 1 to July 31, 2017, UK
59. small businesses
switched accountants
in 2017*
63,000
#1 reason clients
leave
“We terminated our last accountant
because they had fallen behind on
using modern technology. We
signed on with an accountant who
is an expert with online accounting,
apps and the financial services we
need.
* January 1 to July 31, 2017, UK
61. 61
As customers
3 partners, 24 staff
4 million annual revenue
As a channel
powerful influence of 1 Xero partner
Customers and channel
business
clients
400+
Accounts with banks
and financial service
providers
1,000 to 2,000
revenue
(payments received and
payments made)
$$$ tens of millions
thousands of
employees and
households
63. Expedited
bank feed
authorisation
for your
practice
56
%
23%
11%
7%
9%
5%
Send more
client referrals
to us than we
send to the
bank
41
%
16%
Improvements
to their bank
feed
integrations
39
%
4%
Favourable
terms, rates
and deals on
new accounts
and services
for your
CLIENTS
38
%
Effective
integration
with Xero for
making
payments
38
%
Dedicated
bank branch
or bank
relationship
manager for
your practice
36
%
Favourable
pricing or
services for
our practice
29
%
Dedicated
hotline
number and
customer
service for
your practice
28
%
Effective
integration
with Xero for
receiving
payments
27
%
Education and
clear
explanations
on bank
services and
financing
criteria
26
%
Free bank
feeds for your
CLIENTS
23
%
Improved
collaboration
with your
practice
through the
lending
process
21
%
Access to
bank experts,
new services,
education and
training at
Xerocon and
Xero
roadshows
12
%
4% 4% 18% 3% 10% 0% 6% 8% 2% 2%
11% 11% 11% 6% 5% 7% 6% 4% 6% 4% 7% 2%
7% 11% 12% 11% 5% 11% 7% 4% 6% 5% 3% 2%
5% 9% 7% 12% 4% 4%5% 9% 3% 3% 3%4%
2% 5% 5% 6% 4% 4% 2% 10% 5% 3% 6% 3%
Xero partners ranking of what they want from banks
Ranked #1
Ranked in
top 5
Ranked #2
Ranked #3
Ranked #4
Ranked #5
Source: *2016/17 Xero partner
benchmarking series
Question: For For banks to be of greater assistance to you, your firm and your clients, which of these do you need banks to provide? Rank with most important at the top (select as
many or few as you wish)
64. Our partner program and events enable and
accelerate our partners’ success and growth
Subscription discounts
Partner edition products
Practice software
Account management
Xero HQ
Education and
consulting
Advisor directory listing
Xero partner program
65. Our Advisor directory only displays partners and
information that satisfy the highest standards
1 To be listed on our directory partners must have current Xero
certification and of at least Bronze status (~20 clients on Xero). All
Industry and App data shown is systematically derived from their active
clients. This is in sharp contrast to other directories that let firms list
whatever they wish to market regardless of actual experience. In
addition, to be designated a Xero Champion, partners must have
multiple Xero certifications and sustained growth.
1
66. Xero advisor directory global results
268,000
Impressions per month
12,000
Partner referrals to partners per
month
67. What people looking for advisors are seeking out
and basing their selection decisions on
Industry and financial
experience and advisory
capabilities
Evidence of competencies
with apps and technologies
The range of certifications
advisors currently have
68. Xero partners are eager to do more, show
off their capabilities and differentiate
themselves
Unique qualifications
Unique qualifications
Unique qualifications
Xero partners are
intensely competitive
with their local
competitors which leads
to high engagement and
quick update of new
educational experiences
Our learning management system
and partner programme automation
makes it easy for us to track individual
course completion and to automatic
notify partner staff when they need to
review. And, we automatically
remove badges if they do not renew
their education. (There are over
130,000 individual advisors active on
our Xero platform.)
Top marks HSBC
courses
Top marks HSBC
courses
Top marks HSBC
courses
Top marks HSBC
courses
69. Xero HQ is our partner’s primary workspace for their
practices. A popular feature is the Xero HQ bank
explorer.
Xero HQ is an excellent
communication channel for
messages that you would
like to encourage Xero
partners to discuss with their
clients.
72. Opportunities
Expand access to
capital
Daily bank feed
connectivity
Payments
● Drives adoption for
Xero & Bank
● Accounting partner
channel acquisition
opportunity
● Customer retention
● Customer acquisition
● Automate SMB
lending to drive
profitability
● Access to high quality
up to date data
● Secure safe payment
processing
● Keep customers
locked to HSBC
● Improved customer
experience
● Expand market -
MTD opportunity
Enriched data
73. Objectives
Sasfin
- Create value for customers
- New customers acquisition
- Cross sell/upsell
Xero
- Create value for customers
- Customer acquisition
- Great customer experience
On the back of this, the wave of Automation surges.
What’s so important for accounting and bookkeeping firms is that automation allows you to scale up the number of clients you can service without hiring extra people.
Firms are already offering automated bookkeeping services with apps like of Receipt Bank - and so many more of our workflows will be automated by 2020. Mechanics to analytics.
The question is, what will you do now you’re not doing any of that work? Where do you add value?
Bookkeeping and Accounting practice unchanged for 50 years?
Change is inevitable - you can only cause it or react it
Early Adopters
Compliance accounting will die
Save you and your Clients time
Save you and your Clients time
The next generation of our Partner Program!
Your feedback has culminated in the next generation of our Partner Program, including the introduction of Xero HQ, our Open Practice Platform (replacing My Xero) and a world class Advisor Directory to connect you to more small businesses than ever before!
And just as we’ve been investing in the replatforming of Xero onto leading cloud solutions like Amazon Web Services, we’ve also invested millions of dollars and thousands of hours to replatform your practice onto a single platform, so there is one single source of the truth and everything flows seamlessly together.
This is going to be transformational!
For bills and payroll:
Customer selects bills and clicks ‘Make Payment’
Customer selects the bank they want to pay from
V2 will allow for payroll and expense claims to go through the same flow
V1 current state:
Expense claims can’t do this at all
Payroll payments - the SMB has to download the file
Once they have selected the bank they want to pay from in the previous step, the authorised user is redirected to their bank in the same flow and authenticates the payment with their bank by entering their online banking account number and they grant permission to process the payment in the bank environment - the bank then passes back a token to Xero that allows us to submit those payments
Authorised user is then redirected from bank back into the process flow within Xero
In this step: The authorised user finalises the bills / payroll / expenses that they want to pay (gives them a chance to edit the date, referencing details, acc no they want to pay to - based on their user role within Xero)
Improvements on V1: This is a really good opportunity for us to give the user real time feedback on what might be wrong with the payment submission - that includes wrong account details, past payment date - driving our safe payments initiative but also driving efficiencies for the SMB. The UX for V2 vs. V1 is a lot more beautiful and less convoluted for the small biz.
This is not technically a step that the customers need to do. This is more about payment validation - The SMB will now recieve real time feedback
This new feature will send a status update within the Xero org to confirm whether or not their payment was processed successfully by their bank. This is a new feature, reducing the assumptions that the payment has been submitted or failed or been declined or requires further authorisation at the bank. Where the payment is at, do they need to take any further actions etc. after its been submitted to Bank
That’s it.
If anyone wants to know any further detail - Nick Halley is happy to run them through this in more detail.
Questions came up about: How do you know you can trust the data - demonstrate the assurance data through the assurance dashboard - then demonstrate how this assurance information should be thought about as a data feed. It starts to join the dots for the FI's to understand how they can be confident in the data for lending.
We talk a lot in FinWeb about High Integrity Accounting data - 2016 we released our Assurance Dashboard, which while primarily for Accountants, it starts to open up another dimension of the value we can provide lending partners:
By showing:
Who has been in the system
Which bank accounts which are connected to feeds were there any transactions manually added or deleted.
These sort of system controls enable Accountants to be more confident of the financial reporting in Xero, which extends to conversations with Lending partners, which we know Accountants are a pivotal part of.
Our Financial Web vision is to reduce the pain points that Small Businesses face when trying to access Financial Services - We work with banks and financial service providers to provide bank feeds (that help businesses understand their true cash position), we work with partners to deliver solutions to help them get paid faster as well as make it easier for SB owners to pay their suppliers and their employees. Our final piece of the FinWeb puzzle / strategy is helping Small Business owners to gain access to capital - whether it be to grow their business or just make ends meet for a while - we want to help Small Businesses to find these lending solutions easier and when they need it.
This slide demonstrates a mix of what we’re doing with FI’s today and what we’re building towards for the future to help deliver easy access to capital for small businesses.
Provide easy access to capital for small businesses
Present a full financial picture of the borrower
Provide qualified lending leads to the FI
Lower the cost to serve small business customers
And now we will get into the detail on how we’re delivering on this vision:
Xero is investing on all fronts to help banks evolve and transform.
Discovery: A partnership with Xero lowers the cost of marketing and broadens the FI’s reach. instead of running marketing campaigns that can be pricey ($1800 / originated loan) and ineffective, we are building ways in our product so that our mutual customers can discover your offerings in context. Engage with your customer when the lending need arises.
Application: A frictionless application process reduces manual error by the SMB or their accountant and drives higher completion rates for the FI’s. Move on from processing paper applications; in fact, don’t stop at collecting documents digitally. build a truly beautiful experience online leveraging Xero data. Reduce days of application work to minutes. We’ll deep dive into that in just a minute.
Credit decision: Rich data in Xero gives financial institution a more informed picture of risk by obtaining a full picture of the business, history and financials. Become data driven and be able to make a decision in minutes. Reduce weeks of decision time to a matter of minutes. Of course you can still set up manual workflow based on your risk policies.
Data has become the core driver of underwriting which speaks to Xero’s advantage. Traditionally SMB loans require a lot of customer visits, personal relationships, meetings to talk about health of the business but now with data, the underwriting process is speaking for itself which is opening up the lending conversation for more customers. Xero has very good data - which gives us a competitive advantage that we can pass on to our SMBs.
Monitoring: An always-on connection allows banks & FIs to understand their customers changing financial needs. Monitoring will allow FI’s to:
prove how the SMB is using the capital
be proactive in financial trends, e.g. if you’re offering a line of credit
Be proactive in delinquencies
standardise covenant monitoring
Start to provide value-added services
instead of doing annual review or covenant audits manually, having an ongoing digital connection to Xero not only allows you to automate that, but also enables you to offer new services to your clients.
Imagine the cost saving digitization can bring, and new innovations that can come out.
So now let’s go one level deeper. We’re looking now at a data level how Xero can support these different processes within the lending lifecycle.
From top to bottom:
Authentication: Xero uses the industry standard OAuth to ask the customer to grant your lending application access to their data
Application: You can automate the application process by prefilling the data that already exists in Xero.
Decision Engine: This is the underwriting phase. You can leverage all types of financial data in Xero to drive your underwriting decision. We will take a deep dive on the types of financial data in a moment.
Fraud Engine: In addition to financial data, Xero provides another dimension of data - fraud or “assurance”, to help you uncover whether accounting transactions were manipulated.
Servicing System: We ask you to help us build a beautiful feedback loop. You can help your customer take care of accounting through automation.
This goes back to the bank feeds story: as bank feeds come into Xero automatically, you can automate the accounting-side transactions too so that our user (also your customer) only needs to click “OK” to confirm the reconciliation.
The types of accounting transactions we can automate include:
Update chart of accounts, contacts
Archive loan documents in Xero via Files API
Post the monthly principal repayments and interest/fees
Facilitate easy bank rec of loan deposit and repayments
Monitoring System: After credit approval, you can stay connected with Xero to find out how the borrower is doing.
prove how the SMB is using the capital
be proactive on financial trends, e.g. if you’re offering a line of credit
Be proactive on delinquencies
standardise covenant monitoring
Start to provide value-added services
Advisor and small business owner working together - “virtuous circle”
This is a great summary slide following on from Slide 13 but it may not necessarily need to be talked to in the meeting, but it will a good reference point for the FI attendees post the meeting.
Anything around merchant name, merchant identification
Merchant category, business’s own self … business owner chooses from a drop down
Attachment or blob - receipt image
Should it create a spend money transaction with this image?
The next generation of our Partner Program!
Your feedback has culminated in the next generation of our Partner Program, including the introduction of Xero HQ, our Open Practice Platform (replacing My Xero) and a world class Advisor Directory to connect you to more small businesses than ever before!
And just as we’ve been investing in the replatforming of Xero onto leading cloud solutions like Amazon Web Services, we’ve also invested millions of dollars and thousands of hours to replatform your practice onto a single platform, so there is one single source of the truth and everything flows seamlessly together.
This is going to be transformational!
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
The next generation of our Partner Program!
Your feedback has culminated in the next generation of our Partner Program, including the introduction of Xero HQ, our Open Practice Platform (replacing My Xero) and a world class Advisor Directory to connect you to more small businesses than ever before!
And just as we’ve been investing in the replatforming of Xero onto leading cloud solutions like Amazon Web Services, we’ve also invested millions of dollars and thousands of hours to replatform your practice onto a single platform, so there is one single source of the truth and everything flows seamlessly together.
This is going to be transformational!
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
Focus for the year has been for balanced investment while driving growth and operating efficiency
Delighted with over 51% constant currency revenue growth
Major milestone “positive EBITDA margin in H2”
