Xero launches industry benchmarks for Asia businesses

Xero has launched an industry benchmark feature in Xero Analytics for business users in Asia. It compares companies with peers by industry and country or region.

The tool sits within the company's analytics section. It gives users a benchmark score out of five, alongside industry-level measures including revenue growth, gross profit margin, expense growth, cash-related ratios and debtors' days.

It uses anonymised data from organisations on Xero's platform, grouping companies into cohorts by industry and geography. That means a restaurant in Singapore is compared with similar businesses in Singapore, not a software company in another market.

Xero framed the release as a way for business owners to move beyond instinct when assessing performance. It also outlined how day-to-day tasks inside Xero feed into benchmark results, including invoice setup, bill management, bank reconciliation and cash flow tracking.

"Industry benchmarks provide you with immediate insight into how your organization compares to industry peers. This gives you a clear view of what good looks like in your sector, and it helps you detect potential issues relating to costs margins, cash flow or debtor stays before it's too late," said Alexandra Hoffman, Product Marketing Manager, Xero.

Users can find the feature under the reporting menu within Xero. The scorecard shows where a business stands relative to its cohort. In one demonstration, a sample business ranked in the top 40% of its peer group.

Each metric earns a score from one to five based on performance relative to similar businesses. Xero also stressed the need for users to set the correct industry classification in their account settings, as that determines the peer group used in the comparison.

The presentation focused on Asian markets, where payment terms, collection methods and cross-border trading can vary widely between countries. Those differences can affect liquidity, supplier relationships and how benchmark data should be interpreted.

One area of emphasis was debtors' days, which measures the time taken to collect cash after an invoice is issued. In the sample shown, the business had debtors' days of 37, compared with an industry average of zero. Xero said that kind of gap points to slower cash collection than peers and warrants investigation.

"Today, we'll focus on a few KPIs that matter a lot in Asian markets, where cash flow and supplier terms can be very different from region to region," said Hoffman.

Invoice data

Xero linked the usefulness of benchmark scores to the quality of the underlying accounting data. Revenue account coding, tracking categories and tax treatment on invoices all affect the reporting base from which benchmark measures are derived.

It also highlighted e-invoicing as part of that process, saying businesses can send invoices directly from one system to another in a structured digital format rather than relying on PDFs or manual entry.

"So, e-invoicing helps businesses send invoices directly from one system to another," said Ali Nail, Education Manager in Asia, Xero. "In a structured digital format without needing PDFs, manual data entry are back and forth emails."

Nail said businesses should review revenue accounts in the chart of accounts and use tracking categories if they want a more detailed analysis by location, product line or region. In the demonstration, she showed how a food and beverage business might track sales by product type and region.

Xero also pointed to invoice reminders and embedded payment methods as tools that can influence the speed of collections. Users can set reminder schedules based on due dates and overdue status. It said these workflow changes can improve cash collection and sharpen benchmark inputs.

"So the key message here when going over all this is that clean and voice setup creates a cleaner benchmark input and better management decisions," said Nail.

Collections focus

Xero spent a large part of the session on aged receivables and customer follow-up. It said the accounts receivable ageing summary can give businesses a direct view of overdue invoices and show which customers should be chased first.

The report can be filtered by date, ageing period, due date or invoice date. Users can also sort balances by size and drill into customer records to review payment history. Xero showed how smart lists can identify customers with balances overdue by more than 30 or 60 days, and how businesses can send statements to several debtors at once.

Hoffman said companies should focus first on the oldest balances when reviewing the report. She added that the debtors' days benchmark should prompt businesses lagging peers to look more closely at their receivables processes.

Cash planning

Xero also tied the benchmark feature to Cash Flow Manager, another product within its analytics section. The tool shows projected cash inflows and outflows in graph, table or calendar views, and provides measures such as cash runway and cash buffer.

Projections draw on invoices due, bills due and recurring transaction patterns. Users can add one-off or recurring items for scenario planning and test whether a planned expense would leave the business with a positive closing balance.

This planning view does not change invoices or bills elsewhere in the accounting records. It is designed as a forecasting layer inside the software.

Bills and banks

On the cost side, Xero said businesses should manage supplier bills closely if they want benchmark measures on expenditure and working capital to remain reliable. It pointed to Hubdoc for bill capture and extraction, then to Xero's bills workflow for approval, tracking and batch payments.

According to the demonstration, the supplier contact view also gives a picture of spending over time. Users can inspect payment patterns and unpaid bills for individual suppliers.

Xero then turned to bank feeds and bank reconciliation. Direct bank feeds regularly import transactions from participating banks and financial institutions into Xero. That reduces manual data entry and gives businesses a more up-to-date view of cash inflows and outflows.

"If you're not reconciling regularly, your closing cash balance may be wrong, your debtor and creditor balances may be still, and your benchmark comparisons become less reliable. So the discipline here is simple. Reconcile regularly," said Nail.

Xero also recommended bank rules for frequent transactions. Those rules can apply coding automatically to recurring payments or receipts. Consistent coding matters because inconsistent treatment of transactions can distort reports and make benchmark signals less reliable.

Review process

Xero closed the session with a checklist for businesses that want to use the new benchmarking tool as part of a regular review cycle. It said users should align profit and loss statements, balance sheets, and other reports to the same period as the benchmark data. It also recommended reviewing results by location or business line through tracking categories.

Businesses can save custom report layouts for quarterly benchmark reviews and add benchmark or business health score widgets to their dashboards. Those scorecards include measures such as debtors' days, which can then be monitored between formal benchmark reviews.

"We have discussed everything that you need in Xero to ensure that your benchmarks are actually accurate," said Hoffman.