Xero and City National Bank Partner to Deliver Unparalleled Financial Management Technology to Small Businesses

Xero, the global leader in online accounting software, and City National Bank, a provider of complete financial services for business owners, today announced that they have joined forces to improve financial management for small businesses (SMBs). Xero and City National Bank customers will soon have the most comprehensive view of their critical financial information with a direct connection between their online accounting and bank data. This marks Xero's inaugural bank partnership in the United States and comes as the company is experiencing record growth with U.S. revenues and customers doubling year-over-year.

Connecting Xero and City National Bank accounts provides reliable overnight delivery of the prior day's bank transactions directly into Xero's intuitive accounting and bookkeeping workflow. This integration provides the most accurate and comprehensive view of a business' finances, and eliminates potential delay or miscalculation due to lag-time, enabling SMBs to make the best decisions about the direction of their business.

"Strong finances are the lifeblood of any business. The direct connection between our accounting applications and bank data will help our clients make better sense of their finances, putting the most up to date financial data into a business-ready context that empowers them, and us, to make the best possible decisions that will drive their business forward," said Ken Coelho, partner-in-charge, RBZ, LLP. "This integration will help inform every aspect of our clients business, from day to day operations to long term business forecasting."

"Managing bank reconciliations and tracking finances can be a daunting task for small business owners," said Jamie Sutherland, President Xero U.S. "Xero is dedicated to bringing online banking and cloud accounting closer together to give small businesses the most accurate picture of their financial health. City National Bank is a great partner for us as we share a commitment to helping SMBs, and we are thrilled to offer the best integration of accurate bank data and accounting solutions."

"City National has a long-standing commitment to serve the most innovative, cutting edge businesses, and make their finances easy to manage so they can focus on growing in creative ways," said James Daley, executive vice president and manager of Treasury Services for City National Bank. "This partnership with Xero puts us in great position to offer our clients an industry leading online accounting software, fully integrated with our comprehensive data."

PENNY CROSMAN For American Banker writes:  In a unique partnership announced Wednesday, City National Bank in Los Angeles is working with the cloud-based accounting software company Xero to integrate its online banking site for small-business customers with Xero's technology. When the connection is complete, the accounting workflow will be tied to real-world transaction data, with the bank account providing a "source of truth."

Small businesses that were customers of both companies asked for the joint product, Xero and bank officials say. Eventually, clients will be able to complete many online banking tasks in their accounting software, something these customers have also asked for.

The Xero software will compare book transactions and bank transactions and help match payments against invoices.

The $27 billion-asset bank is the first U.S. bank to partner with Xero, although the software company does have a partnership with the U.S. account aggregator Yodlee.

Xero was founded in New Zealand, but now has a U.S. headquarters in San Francisco. Its accounting software is created for the Web and competes with QuickBooks online. It has 193,000 small-business customers in 100 countries.

"The U.S. is where our future is," says David Pollock, director of business development at Xero. "We're on track to double our U.S. revenue and customer base year over year."

Pollock says Xero has tried to not replicate desktop accounting software but has designed a simple workflow for browsers and mobile devices, leaving out features that don't apply to the vast majority of users, such as robust inventory management. "Instead of squishing everything into our user interface, we've opened up our back end to the developer community," he says. More than 200 partners have created add-ons for the product, most recently Expensify and Clio.

According to Pollock, the bank's brand will be prominent whenever bank data shows up in the accounting software.

The integration of the bank's online banking site with Xero's software will take place in phases. "As we move forward, we'll be rolling out a real-time provisioning solution," Pollock says.

For now, Xero customers will submit a form to City National, instructing the bank to deliver their monthly statements to Xero, which will make the connection on the back end.