An Influencer, Xero and Claude - Where the Value in Reports Actually Sits.

Ah, yet another big week in AI. This is The AI Exhale, hosted by Vibe CFO with Jez and Cam. Five minutes, one thing that matters, or maybe two. We ignore the rest so you can too.

Jez: All right, so we've got to talk about this Xero influencer story. I mean, it's still doing the circles on LinkedIn. It came out of the UK. Actually, I particularly want to just mention another influencer story before we get into the most relevant one. Have you seen the US Open with the influencers now? Now no longer allowed in. So they gave credentials for politicians, whatever, and then for influencers, with their own special lanyard.

And so a guy's serving, and what do you expect, crickets? No, you've got these four lovely ladies doing some conga dance in their big, you know, limelight, and the umpires tell them to shut up. So anyway, influencers.

Cam: Did not know that. I've not heard that story.

Jez: Love them or hate them, maybe more towards the latter. Back to relevancy. So Xero paid an influencer, an influencer who then posted on Instagram. She'd spent 120 grand on accountants since 2020, 800 pounds a month. And it had a direct link to six months free, was it? Obviously the Xero badge, therefore approved to be marketed. So definitely a Xero-backed piece.

Albeit maybe what has come out in the wash is that it wasn't approved, that's some of the back chat. But yeah, clearly this has cut deep with the Blue Army, aka the accountants, the distribution channel really since the onset of Xero, up and out of New Zealand.

Cam: I can't believe we're talking about this, because surely we can't add any more opinion to it. If you go on LinkedIn, it's just here's someone else's post, post, post, point of view and how they see it.

It's amazing how much it's exploded. But if we get down to the background of it, right? So what's happened is she has said, I can create my management reports through Xero and Claude. And that management report in Claude is as good, or maybe slightly better. I mean, that doesn't really matter. The point is you can have it created basically for no extra cost, because you're already paying your monthly Claude subscription, and you don't have to pay the accountant to produce that management report.

What do you think are the main responses? The first is trust and credibility, and are the numbers correct? Is that basically the hits on it?

Jez: I'd say yeah, especially from our perspective. I said, geez, 800 pounds a month, I better up my prices. Anything to improve accounting pricing strategies, I'm all for it. So that was a good part of that LinkedIn stream. But yeah, it is a trust and credibility game for accountants. And then there's the bedrock underneath them, with technology now being commonplace and AI enabling that further, trust and confidence as well.

So we could take these two angles. It is the brand of the accountant being superseded by Xero going straight to the business owner, or actually the product side of things. Is that management report pack reliable? Strong, reliable, can you return to it in month two and it's all still correct? Can you act on it with confidence? I just don't see that being there. But I do not disagree with the uproar from the accountants, because it's been, what, how many years now with Xero and the Blue Army, and everything that the accountant has done to grow that business.

Cam: Maybe Xero doesn't owe them anything.

If we break this down, this management report piece, right, in my opinion there's three parts to it. There's the preparation, then there's the validity of it, like the sign-off, and then there's the advice on top of that, right? The preparation, in my mind, is the bit that needs to be accepted, that that's changed, right? The preparation to create that management report has now changed. We've got to accept that, right? The validity hasn't. We can still see AI making mistakes, and you can understand the uproar.

I feel like that's the sort of grey area, that validity piece. And all of the noise is, you need to take that information and do something with it, and I go, hang on a minute. I've been in this industry for 20 years, and materially, the revenue earned by accounting firms has been from the preparation. So let's not skirt around the edges. They prepared that management report and it was time consuming. And then the check on top of that was also time consuming.

And that was the tick off. But there wasn't much analysis coming out of it, other than, this is the results for you to be aware of.

Jez: Yeah, so it's a shake up, but in the same way, it's probably just because it's being put out there direct to the business, which is similar to those Super Bowl ads back with Intuit back in the day. They had those big Super Bowl ads where small business owners won an ad campaign, clearly putting them first. That was how many years ago now?

Cam: Yeah. That's a nice little tick to Xero. At least Xero apologised and acknowledged it, whereas QuickBooks did not. QuickBooks were like, yeah, yeah, we're going after the direct business. And they agreed with it.

Jez: A Super Bowl ad. A Super Bowl. It's the epitome of ads.

Cam: And the other part of this, right, is that connector. The MCP, for anyone who doesn't know, the MCP is how you connect Xero to Claude, right?

Jez: Which is...

Cam: It's pretty sh*tty, right? That's the bit that people aren't really acknowledging as well, is it doesn't do transactional stuff. I've already got friends messaging me saying, I've connected the MCP, and you get these generic responses from the MCP saying the Xero connector here exposes only reports, not bank or card transaction lines, all these different limitations to it. And I could be wrong on this, but at this point in time, I think Xero is ticking a box on the MCP, and they're not exposing everything to flow through the MCP because they don't want to lose the relationship.

And that's your five-ish minutes back. Vibe CFO, Australian founded. An AI CFO for small and medium businesses, out of the box, governed and secure. vibecfo.ai. Now you know.