Xero

Xero is a cloud-native accounting platform that has become the dominant small business accounting tool in New Zealand, Australia, and the UK, and is growing rapidly in the United States. It covers the core accounting workflow, invoicing, bank reconciliation, expense tracking, payroll, inventory, and financial reporting, all through a clean, modern web interface. For developers building custom web applications, Xero's API is well-designed and consistently maintained. The Xero API uses OAuth 2.0 and provides endpoints for invoices, contacts, accounts, bank transactions, payments, and more. Common integration scenarios include auto-generating invoices from a custom order management system, syncing customer records between a custom CRM and Xero, pulling real-time financial data into custom dashboards, and automating bank reconciliation workflows. Xero's developer ecosystem also includes webhooks, which means custom apps can react to changes in Xero in real time rather than polling.

How It Changed Everything

Xero was founded in 2006 by Rod Drury and Hamish Edwards in Wellington, New Zealand. Drury was a serial entrepreneur who had previously built and sold an email archiving company called AfterMail. His insight was that accounting software was stuck in the desktop era, QuickBooks dominated but was fundamentally a locally-installed product, and Drury believed the entire category would move to the cloud. He built Xero as cloud-first from day one, which was a bold bet in 2006 when most small businesses were still skeptical of storing financial data online. Xero launched in New Zealand, then expanded to Australia, where it achieved market dominance before QuickBooks Online could gain a foothold. The company went public on the New Zealand Stock Exchange in 2007 and later listed on the Australian Securities Exchange. Drury stepped down as CEO in 2018 but remains involved as a director.

One Thing Most People Miss

The name "Xero" is pronounced "zero" and was chosen because Drury wanted to evoke the idea of starting fresh, zero-based accounting. But there's a practical reason too: "Zero" was already trademarked, so they swapped the Z for an X and got a domain name that was both unique and memorable. What's especially interesting about Xero's growth story is that they deliberately chose to win small markets first. By dominating New Zealand (a market of 5 million people), they refined their product and built credibility before expanding to Australia, then the UK, and finally the US. This "small pond first" strategy is the opposite of what most American startups do, and it worked, Xero now has over 3.95 million subscribers worldwide. Also, Xero's app marketplace has over 1,000 third-party integrations, and the company attributes much of its growth to the accounting partner channel, they won over accountants first, who then recommended Xero to their clients.

Visit: xero.com