Diya Jolly

Xero, the global small business platform, has unveiled at Xerocon London, groundbreaking technology underpinning its upcoming AI-powered smart business companion Just Ask Xero (JAX). The proprietary technology helps ensure greater accuracy while using AI in the accounting process.

JAX, available in beta in August, will help small businesses and their advisors run their business more efficiently. Customers and accounting and bookkeeping partners will be able to ‘Just Ask Xero’ to complete tasks like generating an invoice or editing a quote, either in Xero or other commonly used apps and devices that businesses use day-to-day, such as mobile, WhatsApp and email.

Diya Jolly, Chief Product and Technology Officer at Xero said: “We are making steps towards delivering on our product vision – to reimagine accounting through AI and mobile. Small business owners are rarely in one place, or using just one tool. Through GenAI and mobile, it’s now possible to really change accounting for small businesses so that it’s where their work is — in the office, on the move, on their computer or on their smartphone. With powerful, smarter AI like JAX answering our customers’ most important questions, we’re making the most critical business tasks available to business owners in the most important place — wherever they work.”

New technology-boosting accuracy in Just Ask Xero

Xero unveiled its first-of-its-kind technology that works under the hood of JAX. The proprietary technology ensures far greater accuracy than other AI models that only rely on large language models (LLMs). It uses a control system to ensure the data that’s fed to the LLMs is only related to the relevant task, such as quoting an invoice.

“It’s critical to ensure accuracy in accounting tasks, which means using GenAI presents a unique challenge. LLMs are incredibly powerful yet can be flawed. When they are ungrounded and don’t have access to the right information in context, they can make up data points. In accounting, we can’t make up information. That’s why implementing a technology like this is so groundbreaking for the accounting industry. It puts the right guardrails in place around the AI to ensure Xero customers using AI for accounting tasks can trust the precision and accuracy of JAX,” Jolly said.

Additionally, the new proprietary technology provides data security in line with broader Xero platform measures. It ensures the LLMs only receive data that the user has given Xero permission to access, and keeps the data safely within the platform.

JAX will help small businesses answer questions about their finances and anticipate other tasks that may follow, making it easier to stay on top of their cash flow and make informed decisions with the help of their advisors.

Other new GenAI developments in Xero

Xero introduced other GenAI developments including:

• Embedded new generative AI-powered help content summaries inside the Xero platform to surface accurate answers, faster.
• Launched generated answers in Xero Central, the customer support and learning site, which reduced search times by approximately 40%.
• Rolled out an AI-powered setup guide for those onboarding to Xero, providing all new users with relevant answers and information as they set up their Xero dashboard and get started in the product.

New guides to help small businesses and advisors take actionable steps on AI

To help small businesses and their advisors embrace AI and understand how it can positively impact their business, Xero has published tailored AI guides for small businesses, accountants and bookkeepers. The guides summarise relevant AI updates, practical ways to get started with AI, and showcase small businesses and advisors successfully implementing AI in their business.

“Small businesses and their advisors make hundreds of decisions to complete even the simplest tasks. Generative AI can be a powerful companion to help them run their businesses more efficiently and automate back office tasks,” Jolly said. “We want to partner with our customers to help them navigate this wave of AI innovation so they can maximise its benefits in their businesses. That’s why we’re providing education resources and building a business companion they can rely on not just as a creative tool, but they can feel confident is accurate and secure for their accounting tasks.”

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Trent Innes

Australia is a nation with an unrelenting entrepreneurial spirit, with one out of every six workers now a business owner, according to a new research report from global small business platform Xero.

Released yesterday, the Xero Boss Insights 2020 report provides an in-depth analysis of Australian Bureau of Statistics data from 1991 to 2019 and was compiled by The Demographics Group.

The report found that in late 2019, there were 2.2 million business owners in Australia, a spike of 700,000 since 1991. The majority of these businesses are small, including more than 1.4 million sole traders and more than 600,000 micro business owners employing up to four staff.

Trent Innes, Managing Director, Xero Australia and Asia said the report was the first of its kind.

“It’s one of the great Australian dreams to be your own boss, and the Xero Boss Insights 2020 report for the first time shines a light on the entrepreneurial spirit of the nation. It provides a roadmap for anyone who has been thinking of striking out on their own, and showcases who the nation’s business owners are, where they are based and what they do. While the data featured in the report precedes the devastating bushfires that have impacted many regions, it gives invaluable long term insights into not only the central role small businesses play in the social and economic fabric of our country; but also their resilience and ability to adapt,” Mr Innes said.

Bernard Salt, demographer and Boss Insights report author, said: “What I have discovered from the study is the relentless energy and determination of the Australian people, in all parts of the continent, to build a business and to thrive. Not all businesses survive but there is no shortage of Australians putting their hand up in pursuit of what is perhaps the ultimate Australian dream — the quite ennobling ideal of being your own boss.”

Female founders leading the entrepreneurial charge

Businesses with female founders are on the rise. Two-thirds of net new businesses created in Australia in the past decade were founded by women. While men still outnumber women in business ownership across the board, the gap is closing. Women are leading the charge for business ownership in sectors including healthcare (59%) and education and training (58%). On the other hand, men are most likely to own and operate a business in construction (91%), transport (85%) and mining (84%).

The data also identifies the peak age for business ownership as 45-years-old, with almost 46,000 Aussies in their mid-forties working as their own boss, having developed the skills, resources and contacts to build a business. Business ownership peaks again in the mid-50s, with empty-nesters representing 43,000 owners who have taken the leap and started a business.

The Boss Insights 2020 report revealed Australians in their 30s as less entrepreneurial than they were in 2006. However, unlocking the nation’s ‘tech-savvy’ generation to be their own boss, with dedicated start-up grants and support resources, could activate more than 50,000 new businesses to boost Australia’s economy.

The research also highlights the nationalities driving entrepreneurialism in Australia. Australian-born residents and migrants are equally as likely to run their own business. Almost 15 per cent of migrant workers are their own boss, which is slightly higher than Australian-born residents at 14.3 per cent. The migrants driving entrepreneurialism hail largely from the Middle East, with Lebanon, Israel and Cyprus among the top five rankings for business ownership by country of birth.

“Australians have always had an entrepreneurial mindset, from the days of the corner milk-bar, to a farmer supporting their local community. What’s clear from the research is that Australians from all walks of life have the drive to start their own business. It also reinforces the big role small business plays in ensuring the health of our nation’s economy. To maintain Australia’s average rate of employment, it is estimated the economy will need to create at least five million new jobs over the next 10 years – and these won’t all come from large businesses,” Mr Innes said.

Regional towns: a fundamental building block to Australia’s small business economy

While metro cities are key for big business, some of Australia’s regional communities are fertile grounds for small business to flourish. The report identified the ‘seachange and treechange effect’; communities by the beach or in-land elevated by tourism and agriculture with a heightened level of business ownership.

While 15 per cent of the Australian workforce own a business, this peaks significantly in regional towns at about one-third of residents. Flinders in Victoria is Australia’s most entrepreneurial hot spot, with 38 per cent of residents owning their own business. Following closely behind are Bangalow in New South Wales (37%) and Kulin in Western Australia (37%).

There are differences in the types of work business owners do in metro areas and regional communities. Business owners in metro cities are more likely to own businesses in professional services, including accounting, law and IT. Construction businesses are more likely to be founded in the outer suburbs of metro cities, while agriculture, forestry and fishing provide the most business opportunities in regional communities.

While the report does not contain data analysing the impact of the recent bushfires, it shows that in the past, businesses in regional communities emerged as the most resilient, with almost half (46%) of those formed in 2015 surviving through to 2018. The business survival rate peaks much higher in some regional towns, with a 66 per cent survival rate in the Barossa Valley and Yorke Peninsula in South Australia.

“What the report shows us is that across many years small businesses have been the lifeblood of the country. Small businesses, often family owned and run, are at the heart of regional communities. They have been the friendly faces behind the grocery story, the cafe, the newsagency and many other local institutions for years. Based on past experience we can hope that people will come together to help those affected to rebuild and recover.”

From agriculture to knowledge-based economy

Farming has long been a key sector spurring the growth of Australia’s economy, but this has shifted. Of 700,000 new businesses formed between 1991 and 2019, the majority were in professional services. Meanwhile, agriculture and retail businesses were on the decline during the same period.

The sector in which a business operates also affects business survival rate. Two-thirds of financial services and healthcare businesses formed in 2015 survived through to 2018. Those less likely to survive were public administration and safety (39%) and administrative and support services (47%).

For further information on Xero’s Boss Insights 2020 report visit: xero.com/au/campaigns/boss-insights-2020

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