Xero unveils AI tools as customer base hits five million

Xero has unveiled a new set of artificial intelligence tools built around its JAX assistant and said it has reached five million customers worldwide.

The announcements were made in London as Xero set out a broader push to embed AI more deeply into bookkeeping, payments and financial workflows used by small businesses, accountants and bookkeepers.

The new products include AI features for document capture, bank reconciliation and tracking missing receipts, as well as integrations with Microsoft 365 Copilot and Anthropic's Claude. Xero also introduced XeroForce, a no-code tool for building custom AI agents, and Xero Ultra, aimed at businesses with more complex finance and reporting needs.

At the centre of the update is JAX, which Xero describes as its agentic AI platform. It is intended to reduce manual work across bookkeeping and cash flow management by acting directly on tasks within the Xero system rather than only answering prompts.

Bookkeeping tools

Several of the additions focus on core accounting work. Smart Document Capture reads source documents and extracts data into Xero. The company plans to expand that process to bank statements and transaction creation.

Auto bank reconciliation is designed to match transactions to bank feeds in real time. Xero plans to extend it to more complex cases, including splitting a single payment across sales and fees.

Another planned tool, document chasing, is intended to identify transactions with missing receipts. It is designed to help users spot gaps in records without manually searching through files.

Xero is also changing its Partner Hub for accounting and bookkeeping practices. The revised version is intended to bring together live book health, work status and month-end readiness in one view linked to tax and advisory work.

Workflow expansion

Beyond bookkeeping, Xero is trying to extend its software into the broader set of workplace tools used by finance teams and advisers. The integrations with Microsoft 365 Copilot and Claude are designed to let users access live Xero financial data from those environments.

Those links are intended to let customers query financial information inside applications they already use day to day. The approach reflects a wider trend among business software companies to place accounting and operational data inside general-purpose AI assistants rather than keep it confined to specialist systems.

XeroForce takes a similar approach, allowing customers to create AI agents through natural language prompts. The tool can connect workflows across Xero and third-party applications without requiring code.

Move upmarket

Xero Ultra marks a separate effort to serve businesses that are outgrowing basic small-business accounting software. The new offering is intended to provide stronger financial control and reporting within the existing Xero platform.

The move highlights a long-running challenge for finance software providers focused on small companies: retaining customers as they expand and their reporting, oversight and approval needs become more demanding. Xero Ultra is designed to keep those users on its platform rather than losing them to larger finance systems.

Cash flow focus

Xero also outlined new AI-led features tied to payments and cash flow. JAX will be able to analyse payment histories and carry out follow-up plans for overdue invoices, including sending reminders and changing the communication method if a customer does not respond.

Another feature, bill protection, is intended to review bills before payment and flag unusual amounts, changed bank details or unknown suppliers. JAX will also suggest actions to manage short-term cash pressure, such as delaying non-critical bills or protecting payroll.

Xero linked those additions to a broader aim of helping customers finish more months with positive cash flow. For many small businesses, cash collection and payment timing remain among the most immediate financial pressures, making that part of the software stack a key area for automation.

Diya Jolly, Chief Product and Technology Officer at Xero, said the company sees the current shift in AI as comparable to its earlier move into cloud accounting.

"When Xero moved the ledger to the cloud, we completely reimagined what was possible for small businesses and their advisors. Today, we're at a similar inflection point as we define the agentic era for small business finance," Jolly said.

"Our vision for AI innovation is deeply grounded in Accountable Intelligence - where we automate routine, time-consuming tasks while firmly elevating human judgment. With the power of JAX, we are streamlining complex workflows and turning insights into immediate action so small businesses and their advisors can focus on what matters most," Jolly said.