Xero adds payroll to its accounting platform for US small businesses with limited availability

Xero adds payroll to its accounting platform for US small businesses with limited availability

Xero is expanding its offering today to better service the small business and offer stiffer competition to Intuit. In a blog post, the company announced that it will now be handling payroll management and processing to give its customers a one-stop shop for their financial needs.

While this may be great news for businesses, it’s important to know that it’s only available to those users in the United States, specifically in California, Utah, New York, New Jersey, Virginia, and Florida.

The payroll offering comes with several key features, including a way to file and pay taxes electronically, availability of an employee portal that enables workers to manage their time sheets and accounts online, and addition of an API to allow other business systems to leverage.

Stuart McLeod, Xero’s Vice President of Global Payroll, said in a statement:

Payroll in Xero has been a feature years in the making, as we aimed to create a feature made exactly the way accountants want it. We’ve listened closely to our customers and we are beyond words excited to offer this new feature to help them meet their business demands.

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.

While limited in availability throughout the United States, Xero says that payroll management in other states is “forthcoming.” It’s also looking to already expand its services again, saying that employee W2 forms and the entire end of the year (FY 2014) payroll process. What’s more, the company is exploring the possibility of a graphical view of all employee data, an employee pay day iOS mobile app, and more.

This isn’t exactly Xero’s first foray into the payroll space — in April, the company formed a cloud-based accounting partnership with ZenPayroll to give small businesses an alternative to easily and quickly manage their finances across two systems. While this agreement most likely remains in place, today’s release gives businesses another choice so they don’t have to subscribe to multiple platforms.

Backed by venture capitalist Peter Thiel and other investors, Xero has been repeatedly gunning after Intuit and its QuickBooks product. With this release, Xero hopes that having a single service to handle all of the small business accounting and payroll needs will be a good enough lure to draw more small businesses to its platform.

It should be noted that Intuit recently began opening up its developer platform in September to more systems in order to create a Salesforce-like ecosystem. It has expectations that QuickBooks will become the next business operating system for any company.

Photo credit: ROSLAN RAHMAN/AFP/Getty Images

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