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Ultimate Guide to Xero Integrations

In this article, we explain Xero integrations. Will your business achieve tax compliance for international suppliers? Read our white paper, “The Last Mile of Xero: What Finance Leaders Must Address.”

Xero integrations with third-party software apps give you a wide range of greater functionality. Xero add-ons improve your company’s efficiency and maximize your investment in Xero.

From payment and payables to Xero CRM integrations, learn how to get the most out of Xero with automated accounting and streamlined business operations.

A Brief Overview of Xero

Xero is cloud-based (online) accounting software for small businesses and growing companies. Xero was developed and is currently headquartered in Wellington, New Zealand. Xero has over 3.7 million SaaS subscribers. The company, Xero, was founded in 2006. 

Xero SaaS pricing is based on a choice of three business plans, with the following standard pricing:

  1. Early ($13/month)
  2. Growing ($37/month)
  3. Established ($70/month)

Xero may discount the first three months of use. 

Xero accounting software includes these features: 

  • Core accounting and financial reporting
  • Basic accounts receivable and accounts payable
  • Inventory management
  • Customer sales invoices and quotes with sales tax and tax rates
  • Bulk reconcile transactions
  • Daily imported bank transaction feeds
    • For cash flow visibility and simple bank account reconciliations
  • Mobile app accessibility with Google’s Android or Apple’s iOS

Xero’s partner accountants and bookkeepers can use Xero accounting software in their practice, including work programs, client queries, and Xero Workpapers, using accessed and validated client trial balance data and requested client documents. 

Understanding Integrations with Xero

Software integration with Xero is connecting the software program to other apps or subsystems that will work together seamlessly as a unified system. With integration, data is automatically synced between the software systems. Integration with third-party Xero add-ons makes Xero more than just its core software functionality. 

Software subscriptions can be purchased for Xero integration add-ons through a third-party vendor’s website or the Xero App Store, which offers more than 1,000 integrations. Your business will pay extra for each add-on software app, which is priced by its software vendor. 

The Benefits of Integrating with Xero

Benefits of integrating with Xero include:

Increased Efficiency — Integrated third-party software can digitize and automate streamlined back-office workflows by eliminating paperwork and manual data entry. When data syncs between your Xero accounting software and the third-party add-on app, you won’t need to use time-consuming manual data entry to get the systems’ data to agree. Many third-party apps for Xero provide templates. 

Reduced Errors and Fraud Risk Xero add-on software can add verification, validation, and exception triggers based on thousands of automated rules. It can allow suppliers to enter their own contact information, tax form data, and payment details to increase accuracy. 

Better Communication Software integrated with Xero gives you an added communications layer. You may get automated status information and email or text notifications to better keep your suppliers and customers informed. This automated information not only keeps stakeholders in the loop. It prevents time leakage from continuously answering your supplier’s inquiries that would otherwise need human responses. 

You may get access to an online documents repository with electronic contracts, invoices, purchase orders, and receiving reports in the payables and supplier management software. 

Tax and Global Regulatory Compliance Some automation software helps you automate tax compliance or tax preparation reporting and global regulatory compliance. You can simplify these compliance processes, use the power of system-based intelligence, and avoid IRS penalties for non-compliance or inaccuracies. 

Greater Visibility With unified databases and company-wide systems using real-time dashboards and infographics, users will have access to more information when they need it. Some integrated software adds real-time visibility into spending, payables balances, and cash requirements. 

Is your business using the best Xero integration for payables automation? 

Download our “How Scaling Businesses Can Implement AP Automation to Boost Efficiencies and Cut Costs.”

Use advanced AP automation software to eliminate manual processes and data entry, onboard global suppliers, collect tax forms and track supplier payments, process, match, and approve electronic invoices, communicate status, and prepare real-time payment reconciliations.

What are Xero’s Integration Options?

With Xero accounting software, you’ll have several different methods for app integration.  

Native Integration 

Xero provides native integration, which is a prebuilt connection between Xero and third-party software that quickly connects. To enable Xero native integration, go to your third-party software settings and look for the connect to Xero option. An example of Xero native integration is LivePlan business plan creation, forecasting, and budgeting software. 

Coded Integration 

Xero provides coded integration best practices for third-party add-on apps that integrate with Xero. Coded integration includes the process of mapping app financial data to the Xero chart of accounts and validating the mapping. Customization of the user’s chart of accounts should be considered when mapping financial data. 

Does Xero Have an Open API?

Yes. Xero has an open API that businesses and third-party developers can use to create custom integrations and apps. Xero provides an API connection that lets developers create open-source software that works with Xero integration. API stands for application programming interface. 

Xero Huggin won the AWS-sponsored Xero Developers Challenge award in November 2017 for Best Open Source Project with Xero API. Xero Huggin Agent builds automated agents to perform online automated tasks. According to this awards announcement:

 “Xero loves open source, and we couldn’t be more excited to see passionate people making Xero API accessible on a free and open connector platform.”

Xero Integration Platforms

Specialty integration platforms between Xero and third-party software apps include Zapier, which provides no-code Xero integration based on triggers. Zapier can extend Xero integrations from 1,000 third-party apps to over 5,000 software apps. Data is used by the integrated app and Xero, and transmitted through Zapier. 

Two examples of connecting third-party software apps through Zapier integration to Xero are:

  1. HubSpot, used for contact management 
  2. Shopify, a platform for global eCommerce shops  

How to Set Up Your Xero Integration

You can choose from native Xero integration, integration through a specialized no-code integration platform like Zapier, or coded (custom) integration. 

To set up a custom integration with Xero’s open API, you’ll be using OAuth 2.0 (Xero Developer Centre) as a standard authorization protocol. OAuth 2.0 lets your integrated app access a user’s Xero account without the password. A current Xero user must authorize the connection for the third-party app integration. 

6 of the Most Robust Integrations with Xero

6 of the best Xero integrations are

  1. Tipalti
  2. LivePlan
  3. Salesforce 
  4. Stripe
  5. PayPal
  6. Gusto

1 – Tipalti 

Tipalti provides a robust, heavy-duty payables automation and global payments solution that can be considered “The Last Mile of Xero: What Finance Leaders Must Address.” If your company doesn’t use AP automation for that last mile, you’ll be wasting resources on time-consuming manual and paper-based processes and hiring extra accounts payable staff. And your business will be taking on too much global payments risk. Without traveling the last mile, your business won’t safely and timely arrive at its desired destination. 

Tipalti, a Xero partner, provides third-party Xero finance integrations. Tipalti automation software includes AP Automation, Mass Payments, Procurement, and Expenses. Tipalti works with Xero accounting software in real-time, giving your organization better visibility into payables, spending, and cash flow. Tipalti is a leader in growing company and mid-market accounts payable automation software. 

With Tipalti’s end-to-end payable automation solution, you’ll streamline business processes, reduce 66% of errors, spend 80% less time on payables and invoice processing, and close the books 25% faster with automated global payment reconciliations. Tipalti has 99% customer retention and 98% customer satisfaction rates. 

Tipalti offers self-service supplier onboarding for gathering W-9 or W-8 series tax forms, contact information, choice of payment method, and payment details. It tracks supplier and independent contractor payments to simplify preparing 1099 and 1042-S IRS information return forms. Tipalti also gives your business the option to automate eFiling and recipient distribution of your 1099-MISC and 1099-NEC forms through its partner’s, third-party ZenWorks Tax1099 software. 

Your business can collect electronic invoice data for invoice processing, including headers and line items, through OCR scanning, email, or upload through the supplier portal.

Tipalti lets you pay in 196 countries and 120 currencies, using a choice of country-available payment methods. Payment methods include ACH (U.S. domestic only), global ACH, PayPal, debit card, wire transfer, or check. Tipalti holds money transfer licenses (MTL) in all states requiring a license and uses top-tier major U.S. banks for making payments. 

2 – LivePlan 

LivePlan is a third-party software app used by small businesses as an accounting tool for creating business plans and budgeting with real-time plan vs. actual numbers and budget variances. With Xero native integration, LivePlan imports Xero financial data into the LivePlan dashboard to create financial plans and budgets and Infographics for business intelligence. 

The two choices for native integration offered by LivePlan are Xero and QuickBooks accounting software. When choosing small business software, businesses often decide between Xero vs QuickBooks, which are competitors in the small business accounting software market.

3 – Salesforce

Salesforce is the most widely used customer relationship management (CRM) software. The Xero App Store includes different integration apps to connect Xero to Salesforce

4 – Stripe

With its partner Stripe, Xero integrated Stripe into the Xero online accounting software as a native integration for its eCommerce business users to accept customer debit and credit cards. As one of several Xero payment integrations, Xero software automatically receives a Stripe data feed for payments received by its users, including customer data.

5 – PayPal

Xero payment integration with PayPal is a native integration. It’s possible to connect PayPal with Xero in just a few clicks to integrate the PayPal payment service with Xero. Your business can create a new PayPal account in Xero if you don’t already have one. With PayPal integration, you can add a PayNow button on Xero sales invoices for customers to easily pay you through the Xero invoices.

6 – Gusto 

Xero accounting software has native integration with Gusto for payroll as an add-on. Xero optional Gusto pricing starts at $40 per month. Gusto, a Xero partner, is a preferred add-on app for Xero. The Gusto add-on integration is specifically mentioned on the Xero Pricing Plans page. 

In Summary

Xero integrations are achieved through native integration, no-code integration platforms, or coded (custom) integration using Xero’s open-source API to authorize and connect with third-party add-on software. Xero integration with third-party apps enhances functionality and efficiency beyond the core software that Xero provides. 

To find out more about Tipalti-Xero integration features and benefits, read Accounts Payable Automation for Xero Accounting Software.” 

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