At Xero, we aim to delight our customers by helping them save time and operate more efficiently. One challenge our accounting and bookkeeping partners have shared with us is that managing their clients tax compliance can be a painful and complex process that leads to a lot of additional stress around this time of year.
We’re thrilled to announce that Xero is acquiring TaxCycle, a leading Canadian tax preparation software company for accountants and bookkeepers. Together with TaxCycle, Xero is striving to make year end tax simpler and more beautiful for our Canadian customers. Today also marks another milestone for our North America business, fresh on the heels of last month’s acquisition of US-based LOCATE Inventory.
Based in Calgary, Alberta, TaxCycle was founded in 2010 by Canadian tech industry veteran Cameron Peters. Cameron created some of the first tax software for electronic filing in the mid-90s and has been continually innovating in the space since then. TaxCycle’s software provides a full Canadian income tax suite, with almost 4,000 tax firms and over 16,000 individual accountants, bookkeepers and tax preparers using its solution.
This acquisition advances Xero’s commitment to extend and enhance our product offering to Canadian customers, following recent additions such as provincial sales tax return reports and Canada chart of accounts templates.
How does this benefit Xero accountants and bookkeepers?
TaxCycle provides software to enable Canadian accountants, bookkeepers, and tax preparers to manage and file income tax returns for their clients. This acquisition will benefit Xero accounting and bookkeeping partners by offering a deeper capability to help better serve and advise small businesses.
In the immediate term, Xero and TaxCycle customers can benefit from a newly available Xero integration with TaxCycle’s existing desktop tax solution through the Xero App Store in Canada. This provides a seamless way to integrate standalone corporate and partnership tax return preparation services into practice workflows with Xero, from collating a client file to billing for tax services.
Xero and TaxCycle will continue to invest in the desktop product, which means existing TaxCycle customers can continue to use the service they have come to know and love over the years. TaxCycle will continue to operate as a standalone brand under CEO Cameron Peters’ leadership. We know many accountants and bookkeepers already use TaxCycle and will be just as excited as we are about today’s announcement.
The acquisition will extend Xero’s Canadian value proposition as Xero plans to also use TaxCycle’s expertise and tax management capabilities to enhance its localized cloud offering, over time. This will provide accountants, bookkeepers and tax preparers with a better user experience to help make income tax preparation more accurate and efficient.
We couldn’t be more excited to welcome the TaxCycle team and their customers to Xero. Their decades of experience and know-how building beloved Canadian tax products, combined with our vision for cloud accounting in Canada, will help us deliver a more seamless and beautiful experience for Canadian accountants and the small businesses they serve.
Our commitment to Canada
Today’s announcement also marks an important step forward in our commitment to Canada.
The acquisition increases our presence in Calgary, in addition to our existing Toronto office and presence in Vancouver, as we work with TaxCycle to support the existing tax solution and develop the wider cloud proposition over time.
Xero’s acquisition of TaxCycle further highlights our ongoing investment and commitment to Canada’s tech workforce. Calgary has a rapidly growing technology and small business community, with the startup ecosystem valued at $2.7 billion CAD and on track to grow by 1,000 new tech companies in 2030. We’re very proud to become part of this burgeoning community.
Back in July 2020, we announced Toronto as our North American product and technology hub, tapping highly sought after Canadian tech talent to continue driving innovation, specifically, in the areas of: global payments, billing, automation, artificial intelligence (AI), and machine learning. We are excited to build on the momentum we have created in Toronto and complement it by being a partner and advocate of the vibrant Calgary tech community – while also growing the number of Xero employees we have based in Calgary.
When it comes to our product, we are always focused on addressing the needs of our Canadian customers and partners, and our new offering will provide a product that meets Canada’s unique tax requirements.
We know tax compliance is a major driver for small businesses and their advisors to use Xero. This acquisition will provide us with immediate and long term benefits in Canada, and aligns with our strategy to drive cloud accounting adoption globally and deliver the best compliance experience in all our markets.
We look forward to working with the TaxCycle team to support the existing tax solution and collaborate on our Canadian value proposition.
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