Cloud accounting provider Xero is using its sturdy revenue growth to further cash in on the artificial intelligence and machine learning space, calling it the next era of accounting innovation.
The dual ASX- and NZX-listed company recently posted an annualised revenue of $NZ360million ($A340 million) and said its operating cashflow hit break-even in the second half of the financial year ending March 31.
“That’s for a company that didn’t exist 10 years ago,” Xero chief executive and founder Rod Drury said, adding that its accounting software processed $NZ1.4 trillion in transactions last year.
Mr Drury said the number of subscribers, which doubled in less than two years to more than one million globally, drove the robust revenue growth which, in turn, will be used to increase investment in AI and machine learning.
He believes the space will be the key to the next phase of accounting innovation and an even bigger move through the industry than the cloud was 10 years ago.
“We are really focused on how does accounting move from this impending feeling of dread of having to go and do the books to actually something which is working for you everyday,” Mr Drury said.
Xero has transformed from a start-up to one of the larger technology companies by revenue listed on both the Australian and New Zealand stock exchanges, according to research from corporate advisory firm Clare Capital.
The tech company had already started using AI to help small businesses that find accounting “too complicated”, Mr Drury said.
“Accounting software has been around for 20 to 30 years and most businesses still don’t use it. But what we are seeing now is that accounting is likely to be one of the areas where AI and ML will take off,” he said.
“In the last year, we have started to release our first bits of really smart functionality where the small business doesn’t have to code transactions anymore. We code for them.”
Mr Drury said that implementing these changes will see accountants become “growth consultants” rather than people who just crunch numbers.
“A lot of that has been driven because AI and ML can reduce a lot of the compliance effort that they have spent their time on historically,” he said.
“The transition is really exciting.”
“We have had to do so much work to get to this point that we can now really have some fun and re-imagine the future.”