Xero adds AI analytics & cash flow forecasting in ANZ

Xero has rolled out an updated Analytics experience across its platform in Australia and New Zealand, adding dashboards, visualisations, AI-generated insights, and a cash flow forecasting tool within existing subscriptions.

The accounting software provider detailed the changes in a customer webinar hosted by Melbourne-based Education Specialist Fiona O'Farrell. The session showed how small business owners and advisers can use the tools in Xero's Reporting area.

Xero is positioning the update as a way for organisations to assess performance faster, using graphs and widgets instead of traditional tabular reports. It also highlighted new scheduling and sharing options, plus the ability to add certain non-financial metrics alongside accounting data.

Why it matters

During the webinar, O'Farrell pointed to financial shocks faced by small and medium-sized businesses. She cited a Commonwealth Bank survey in Australia that found 65% of surveyed businesses had dealt with unexpected expenses in the past year, putting the cost at AUD $7.3 billion.

Xero argued that better visibility into operational and financial data can reduce surprises and improve decision-making. It framed the update around three themes: seeing what is happening, understanding why it is happening, and planning what happens next.

Dashboards and sharing

The updated Analytics interface centres on dashboards that present performance information as configurable widgets. The Performance Overview dashboard includes measures such as net income, total income, total expenses, gross profit margin, operating expenses, cash balances, and average time to pay bills and collect invoice payments.

Users can select date ranges and periods, then drill into values by hovering over charts. Widgets can be resized, rearranged with drag-and-drop controls, and displayed as bars, lines, or numerical summaries. Users can also exclude specific accounts from certain widgets.

The update adds export and sharing options within dashboards. The webinar showed distribution via email, Slack, WhatsApp, and document exports. Users can also schedule a dashboard, and Analytics sends it to multiple recipients for repeat delivery.

Dashboards also include branding options. Organisations can add logos and adjust display settings such as currency and number formatting. Analytics refreshes shortly after new transactions post in Xero, and users can also refresh manually.

AI insights

Xero has introduced an AI feature that generates written insights from financial data in Analytics. The tool appears in various dashboard widgets and in parts of the Visualise area. Users can add an industry classification, which Xero said influences the recommendations the system returns.

In the Visualise Profitability view, an insights panel generates a summary based on user prompts, with options to regenerate and copy the response. Users can also rate the response as good or bad.

O'Farrell cautioned that the AI output should be treated as guidance only.

"Now, it's important to call out that this should only be used as a general guide, so it's always a good idea to consult with a qualified professional before making business decisions," said Fiona O'Farrell, Education Specialist, Xero.

Visualise and external data

Alongside dashboards, Xero Analytics includes a Visualise area with five main graph categories: profitability, cash, accounts, external data, and KPIs. Users can toggle a demo data option, which provides sample information for organisations with limited transaction history.

The Accounts section ranks profit and loss accounts, with options to compare periods and filter to top accounts. Users can explore contributing transactions and contacts from within the charts. The interface also includes colour palette settings to change the visual theme of graphs.

Xero also described an external data function that accepts non-financial measures outside Xero's accounting ledger. Examples shown included online review ratings, percentage of returning customers, and website visits. Users enter values in an external data area, and the metrics can then appear in dashboards and Visualise views.

Cash flow forecasting

The update also includes Cash Flow Manager, accessed from the Planning area. It provides an overview of bank balances and cash movements, plus net movement projections. The tool offers graph, table, and calendar views, with forecasts extending up to 100 days or 180 days, depending on settings.

Xero said the forecasts incorporate predicted payment dates based on observed payment behaviour, rather than relying only on invoice and bill due dates. The webinar also referenced support for fortnightly predictions, which can affect how recurring invoices and bills appear in projections.

Within Manage Cash In and Manage Cash Out, users can review due and overdue invoices and bills, adjust expected payment dates for scenario planning, include draft invoices in some plans, and add manual one-off cash movements. The webinar demonstrated adding a hypothetical major purchase as a one-off cash outflow, then reviewing its effect on projected cash.

Plans and access

Xero said every plan includes access to Analytics within the product, with additional features available on higher-tier plans. Access also depends on user permissions, with Standard plus Reporting or Adviser roles required for parts of the experience.

Some functions are restricted by geography and tier. According to the webinar, the KPI tab in Visualise is available in ANZ Ultimate plans and in the Premium plan in Asia. Access to multiple dashboards and templates also varies by plan, with the ability to create up to five custom dashboards cited as requiring Comprehensive or above in Xero's ANZ plans.

Analytics is available under the Reporting menu. Xero also directed users to training courses covering dashboards, Visualise, and Cash Flow Manager, with additional material shared after the session.