Xero has announced a new integration with Procore Technologies. The leading construction management solution. The new App links Procore’s construction financial management functionality with Xero Accounting. The application enables construction workers to access financial data at the point of need, whether in the office or the field. The App is available in the United States, Canada, the United Kingdom, Australia and New Zealand. It is currently available on the Xero Appstore and is free to download and use, though it assumes the customer has licenses for both Xero and Procore.
Kris Lengieza, Global Vice President of Partnerships and Alliances, Procore, said, “Procore is excited to partner with Xero, one of the world’s leading small business accounting platforms. Together we are bringing an integration to market that helps accountants, bookkeepers and business operators working in construction improve communication and workflows with their cohorts in the field. With our integration, Xero and Procore customers can rally around a single source of truth when it comes to financial data, which ultimately empowers teams to make more informed decisions.”
What is the integration
The integration consists of several features, not all of which are currently available outside of the United States.
- Budget codes flow from Procore to Xero
- Procore Projects will map to Xero categories, though it is unclear what data is included within this
- Companies and Contacts flow between both solutions
- There is an optional synchronisation for commitments within Procore or subcontract and purchase orders and subcontract change orders to flow through to purchase orders within Xero. The changes are appended to the Xero purchase orders
- Costs within Xero will flow through to Procore
- Subcontractors’ purchase invoices in Procore will raise bills within Xero. Payment information will flow back to Procore, but this is only supported for US customers. Tax is not handled within Procore for invoices.
Why this matters
This integration will allow small and medium-sized construction businesses that do not have complex accounting requirements to extend their Procore solution to include financial data. Procore also has integrations with other solutions, including Intuit QuickBooks as well as Sage CRE, NetSuite and Sage Intacct for larger customers. This will give customers a choice for their accounting solution. It will allow construction firms to have real-time financial information, enabling them to support complex projects and ensure they are on track.
The integration will help increase construction firms’ efficiency when other industries have digitised their business. McKinsey reported that despite the construction industry accounting for 13% of worldwide GDP, the industry’s efficiency has grown by a mere 1% over the last 20 years. That rate of digitisation is one of the lowest. This is just one element of digitisation that constructors must consider. The report also stated, “Contractors, for example, will need to invest in on-site automation, digitization of processes, end-to-end adoption of BIM, or sourcing of high-value pods that simplify construction on site.”
Chris O’Neill, Chief Growth Officer at Xero, commented, “Digitalization and the adoption of cloud tools has the potential to transform the construction industry and make a real impact to the efficiency of individual firms. By partnering with Procore on this app integration, we’re enabling construction project leads to make better informed, data-driven decisions, so they can help tune their operational efficiency, mitigate project risks, and better scale their business.”
Enterprise Times: What does this mean
Xero has long targeted this construction industry in the UK, and this integration will help it to tackle the massive industry in the US and elsewhere. Procore is one of the leasing construction management vendors and dominates in the mid-market. Is this a sign that Xero also believes that its product, once integrated with industry solutions, can move upmarket from its traditional small business sector? For Procore, it will also help expand within the Australian and New Zealand markets, where its accounting solution is dominant.
It will be interesting to see how quickly it can gain traction in the construction industry. It is worth looking out for case studies and customer stories from Procore and Xero that use both solutions.
