Here's How Xero And Avalara Are Bringing 'Peace Of Mind On Sales Tax'

Detroit-based Benzinga sent its team to New Orleans for Xerocon, Aug. 24-25. During that time, Benzinga sought to recognize the innovation in accounting technology and spoke with founders, investors and others.

The following is a chat with Xero Limited XROLF Chief Product Officer Anna Curzon and Avalara Inc AVLR Vice President and General Manager of Partner Development Frank Hanzlik.

The following text is edited for clarity and concision.

Q: Nice to meet you, both! Care to start off with an introduction?

Curzon: The lion's share of my career has always been in and out of technology, and thinking about democratizing success.

Moreover, I was working at a bank in New Zealand and Rod Drury, the founder of Xero, said that he created a company and would like to induce banking information. We were the very first bank in the world to support bank feeds with Xero.

Then, Rob came knocking on my door and asked if I would come and lead Xero New Zealand.

Later, I moved into this product role.

Hanzlik: My career is in tech and, now, I work with ecosystems and partnerships.

Previously, I ran the Wi-Fi Alliance, which is the global trade association for the Wi-Fi industry.

In my current capacity, I get a chance to work with partners like Xero and make tax less taxing.

Talk to me a little bit about efficiency-driving tools to power U.S. small businesses.

Curzon: We think small businesses have been under siege for a lot of time, and we want to change the game.

We’ve made a number of announcements today and, obviously, one was with our great partners at Avalara in terms of sales tax. We also talked about our plans with Yodlee and LOCATE.

Then, we’re active on the bank statement extraction front, too, with our Hubdoc team.

Frank, do you want to talk a little bit about some of the research you’re doing at Avalara?

Hanzlik: One of the things that we're always looking at is how much complexity there is and what does it mean for small business owners?

We did some primary research and found that a company with 2 to 5 employees will spend about 163 hours a month on sales tax compliance-related work, or about $17,600.

If you blow that out, that’s $200,000 a year. And, with all the different jurisdictions, the regulatory environment is challenging and always in flux.

Further, the journey we're on now is this kind of next wave of partnerships and how we embed them into the workflow and experience.

Can either of you unpack the relationship between Xero and Avalara a bit more?

Curzon: We needed to solve sales tax in the US.

We did that in New Zealand and Australia, the UK and Canada.

It’s one of the biggest mountains for small businesses and it was very important for us to choose a partner for the long term. We wanted to put down the foundations.

We knew the Avalara was exceptional. They share our small business vision and values.

Hanzlik: We have lots of partnerships around the world. There are some, in particular, that have the chance to be at the next level in terms of commitment, shared purpose, and capabilities.

And so, again, we're excited about all our partnerships. We're especially excited about where we can take this one just for some of those reasons.

How do these relationship-starting conversations start and look like?

Curzon: For us, it's very important that we talk to customers of our partners and get feedback.

It is about reaching out and being very clear about what success looks like, what the outcomes of success will look like, and being clear about the capability and opportunity to deliver.

I remember our product team coming back to me after working with Avalara saying that they are the Rolls Royce in sales tax.

Hanzlik: We pride ourselves on being customer and partner-led. We’ll take feedback and listen to that.

We looked at the problems the same way. We looked at the vision in a very similar way. We looked at how our capabilities could be very complementary.

What are both of you most excited about going forward? If any concerns, what are they and how do you get around them?

Curzon: We are hiring exceptional talent because it is important for us that we have people living and breathing the North American market.

With that, we can react super quickly to what we're hearing on the ground and put the tools in place to make sure we're meeting the fundamental needs of small businesses and their accountants, and thinking about how we may innovate moving forward as well.

Separately, we did a study not so long ago, and we were able to identify that in the U.S., on average, a small business will sustain the first year. Now if you're on Xero, and you've got an advisor by your side or accountant and bookkeeper, your survival rate goes up to 92%.

Now, with peace of mind on sales tax, there is no reason why small businesses should fail because they don't have the support. If we get it right, it will lead to better schools and hospitals.

Hanzlik: Scott McFarlane, our founder [of Avalara], talked for many years about wanting to be part of every transaction in the world, which is a big, bold statement.

So, how do we get more and more people exposed to what we do? I think it is partnerships.

There's a lot of headroom which is an exciting thing and admission of, you know, every transaction in the world being part of it. You know, it's bold, it's audacious and it's fun.

And, overall, we’re excited to see how automation will continue to make things better.

Photo: Xero CEO Steve Vamos, courtesy of Xero.