Xero supports Xero Payroll in 26 US states now Image source: https://www.amcharts.com/visited_states
Xero supports Payroll in 26 US states now
Mark Pinard, Director of Product Marketing & Strategy - Global Payroll at Xero (Source linkedIn)
Mark Pinard, Director of Product Marketing & Strategy – Global Payroll at Xero

Xero has announced in a blog by Mark Pinard, Director of Product Marketing & Strategy, Global Payroll, Xero that it has now extended support for Xero Payroll to Ohio and Arizona. Enterprise Times flagged that Ohio was likely to be one of the states covered next because it has the eighth highest number of small businesses within the US.

It will be interesting to see where Xero focus their efforts next as they start to fill in the gaps. Michigan is an obvious choice as it is has the ninth highest number of small business registered. With Xero already support Illinois, one target might be Missouri. The City of St Louis straddles both Illinois and Missouri. St Louis has a population within its metropolitan area in the top twenty in the USA, it seems possible that Xero will look there next.

There is only one more state to complete before Xero reaches the half way mark in terms of US States covered. It will be interesting to see whether they can accelerate there deployments to cover the whole of the US before the end of the year. At the current rate of around two per month they won’t complete until midway through 2017. What may slow them down is that they already cover 70% of the businesses within the US with the Payroll solution. As more and more companies move onto the Xero accounting suite, many will also consider the payroll as part of their decision. The faster that Xero Payroll completes its coverage the better for the cloud based accounting platform.

For both Ohio and Arizona it is not yet possible to file electronically through the Xero system. In the blog they direct users to file their returns with the Ohio Department of Taxation and the Arizona Department of Revenue. While this is understandable it is disappointing that Xero has not announced any states where users are able to file electronically. Xero doesn’t even have a date when electronic filing will be completed and with approval process to go through this could take a while. What Xero does do is indicate when users need to carry out these filing activities and flag critical dates such as file by and due date.

One of the advantages of the Xero Payroll solution is that for those companies signing up to it their employees automatically gain a self service portal. From here they can update personal details and, more importantly, complete timesheets online even from their mobile device.

Whether there will be further announcements before or at Xerocon, San Francisco in August remains to be seen. Certainly some will hope to hear about electronic filing and if they have employees in states not yet included, when they will be able to pay them.

Conclusion

As Xero continues the support for different state legislation with Xero Payroll, its numbers and market share in the US are continuously creeping up. What is surprising is that there have been no recent announcements about big wins amongst the accounting companies. If Xero truly wants to become the serious player it aspires to be in the US it will need to win accountancy and bookkeeping firms into its partner ecosystem.

The same will be true as it considers opening its latest front in South Africa. Having gathered 600 such people into a room even before they launch in that country it will be interesting to see whether they can gain a foothold there as well. In the US the last published user numbers were 62,000. As that number creeps towards 100,000 will the keynote treat this as a clarion call or an achievement?

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