Xero Cloud Accounting Expands into Payroll

By Pedro Hernandez | Posted December 18, 2013

Xero, the cloud-based accounting company, tackles payroll processing with the promise to help take the stress out of properly compensating small business workers.

"The payroll launch is one of the biggest launches to date," said Jamie Sutherland, president of Xero U.S. Unlike some competitive offerings, Xero Payroll is "not a white label of any product," he told Small Business Computing. Built from the "ground up" the new option, included with Xero subscriptions, integrates fully with the company's accounting software platform, creating a converged accounting-payroll system, ensuring complete consistency and seamless workflows, he asserts.

Big Savings for Small Businesses

Moreover, it allows business owners to reclaim a huge amount of the time it takes to get their employees paid.

Sutherland points to CPA Steve Chaney, managing partner of accounting firm Chaney & Associates. In company remarks, Chaney boasted that "Payroll in Xero is an absolute game-changer to the efficiency of my firm, saving our practice 45 hours a week, easily."


The drudgery of transferring financial data between separate systems and the potential to introduce errors are things of the past. "With Xero, I don’t have to worry about mundane tasks like importing and exporting data," said Chaney. "Instead, I can focus on the fun stuff: face-to-face meetings, being a strategic resource and helping my clients become the businesses they set out to be."

Keep Personal Data Safe

Time-savings aside, Xero Payroll was also developed with security in mind, said Sutherland. Private employee data remains private under the company's platform. Small business owners no longer have to worry that staffers charged with balancing the books can glimpse social security numbers and other personal information. Naturally, employees can only view their own payroll information, submit timesheets or review paystubs.

Xero displays only the bare minimum information required to issue paychecks, closing a big security gap in the payroll software market. "Rival platforms show everything," warned Sutherland.

Advanced features include an app that gives employees "the capability to submit time-off requests," via an employee portal, added Sutherland. It's a convenience that streamlines the approval process and eliminates mix-ups, he added. In a similar vein, Xero Payroll also keeps track of time-off balances.

Paid time off is a "liability that sits there" for many small businesses, which many don't track, sending them scrambling to budget and pay it off when an employee departs. With Xero Payroll, companies are never in the dark on how much they owe their employees.

To make tax time a little more manageable, Xero Payroll issues alerts for impending deadlines. In addition, it offers federal and tax documents, which customers can opt to have auto-populated and filed electronically.

According to Xero's Stuart McLeod, vice president of Global Payroll, the new capabilities arrived just in time. "In addition to developing efficiency improvements, we aimed to time the release in December, as the month is widely viewed as the optimal time of year to upgrade systems, which usually entails migrating from legacy desktop systems to cloud-based solutions," he said in a statement.

Xero Payroll is currently available California, Florida, New Jersey, New York, Utah and Virginia, with other states joining that list soon.

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

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