From Melio to AI: How Xero Is Positioning Itself as the New Accounting Standard

 Over the past few years, Xero has made significant strategic moves through acquisitions and product updates, positioning itself as a formidable alternative to QuickBooks—especially as Intuit phases out QuickBooks Desktop and raises prices, prompting many small businesses to seek new solutions.

Major Acquisitions and System Updates

1. Acquisition of Melio (2025)

  • In June 2025, Xero announced its largest-ever acquisition: the U.S.- and Israel-based payments platform Melio for $2.5 billion, with a potential $500 million earn-out.

  • This move embeds B2B bill pay directly into Xero’s general ledger, allowing small businesses to manage accounting and payments in one place.

  • Melio’s CEO will lead Xero’s U.S. business, signaling a strong push into the American market.

  • The integration is designed to turn Xero’s platform into an “active general ledger,” automating routine tasks, initiating and verifying transactions, and optimizing financial operations—far beyond traditional recordkeeping.

2. Acquisition of Syft Analytics (2024)

  • In late 2024, Xero acquired Syft Analytics for up to $70 million.

  • Syft brings advanced custom reporting and analytics to Xero, empowering users with deeper financial insights and more flexible reporting options.

  • This enhances Xero’s appeal to businesses and accountants seeking sophisticated data analysis, and enables Xero to cross-sell analytics as a premium feature, increasing average revenue per user and global reach.

3. Product Innovations and Partnerships

  • AI Vision: In early 2024, Xero unveiled its AI-driven strategy to reimagine small business accounting, focusing on automation and predictive insights.

  • Partnerships: Xero has partnered with BILL to deliver industry-leading bill pay capabilities and with Sumday to enhance carbon accounting, expanding its ecosystem and service offerings.

  • Automation and Collaboration: Xero continues to improve automation (bank reconciliation, invoicing, expense management) and real-time collaboration features, making financial management more efficient and user-friendly.

How These Moves Position Xero Against QuickBooks

Feature/Strategy

Xero (2023–2025) Updates

QuickBooks (Current State)

Integrated Payments

Melio acquisition: seamless bill pay within accounting platform

Bill pay available, but integration less native for some users

Advanced Analytics

Syft Analytics: custom reporting, deeper insights

Basic analytics, advanced features in higher tiers

Automation

AI-driven automation, predictive cash flow, streamlined workflows

Automation present, but some users find Xero more efficient

User Experience

Real-time collaboration, intuitive interface, strong support

Some users report QuickBooks support and interface issues

Migration Tools

Free and automated QuickBooks data import, support for multiple platforms

Migration to QuickBooks Online can be error-prone

Ecosystem & Integrations

Expanding app marketplace, global partnerships

Large ecosystem, but Xero’s is rapidly growing

Why QuickBooks Users Are Taking Notice

  • QuickBooks Desktop Discontinuation: Many users are frustrated with Intuit’s discontinuation of QuickBooks Desktop and rising subscription costs, leading them to consider alternatives like Xero.

  • Seamless Migration: Xero offers free and automated data conversion from QuickBooks, minimizing disruption and lowering switching barriers.

  • Superior Support and Scalability: Xero is recognized for responsive customer support and a platform that scales with business growth.

  • Innovation: Xero’s focus on automation, embedded payments, and analytics positions it as a forward-thinking solution, attracting users seeking modern tools and efficiency.

By acquiring Melio and Syft Analytics, investing in AI, and expanding its ecosystem, Xero is not only matching QuickBooks’ core features but also differentiating itself with integrated payments, advanced analytics, and superior automation. These moves make Xero an increasingly attractive choice for businesses dissatisfied with QuickBooks or seeking a more innovative, future-ready accounting platform.

Related

How will Xero's recent acquisitions strengthen its position against QuickBooks

What new features from Xero's system purchases could attract QuickBooks users

How does Melio integration enhance Xero’s payment and banking capabilities

In what ways do Xero’s automation tools improve over QuickBooks for small businesses

How might Xero’s focus on real-time data and collaboration sway QuickBooks loyalists

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