Digital Transformation in Canadian SMEs: Insights from Xero’s Faye Pang

Digital Transformation in Canadian SMEs: Insights from Xero's Faye Pang

In a recent dialogue with CanadianSME Small Business Magazine, Faye Pang, the Canada Country Manager for Xero, shared enlightening perspectives on Xero’s essential role within the Canadian SME landscape. Emphasizing Xero’s mission to simplify, smarten, and improve the lives of small businesses and their advisors globally, Faye Pang detailed the mutual benefits derived from Xero’s longstanding partnership with CanadianSME. This collaboration, particularly highlighted by Xero’s sponsorship of significant small business awards, underscores a shared commitment to fostering the growth and recognition of small businesses across Canada. Through real-world success stories, like those of Goldilocks Goods and Micacchi Architecture, Faye showcased how Xero’s platform and its focus on collaboration with accountants have enabled businesses to thrive. Moreover, addressing the potential overwhelm of digital transformation, Faye Pang highlighted how Xero facilitates the selection of valuable digital tools and integrations, simplifying this journey for SMEs and advocating for a partnership-driven approach to strategic decision-making.

Faye Pang is the Canada Country Manager for Xero, the global small business platform with more than 3.95 million subscribers worldwide that’s dedicated to making business beautiful. With a continued focus on the growth and expansion of local enterprise, Faye is passionate about building and growing resilient technology partnerships that work to benefit the global small business ecosystem. Prior to joining Xero, Faye helped launch the Uber Eats app in Toronto in December 2015, scaling the business from 80 restaurants on launch day to 20,000 partners by the end of her tenure.

Faye, as CanadianSME Small Business Magazine’s exclusive accounting software partner for the past three years, Xero has played a pivotal role in our mission to support small businesses across Canada. Can you share how Xero views this partnership and its significance in supporting the SME landscape in Canada?

Xero’s purpose is to make life better for people in small business, their advisors, and communities around the world, and our mission is to rewire the world of small business to make it seamless, simpler, and smarter. The synergies between CanadianSME and Xero’s purpose are clear which is what has made this partnership so impactful. 

When I think about significant moments, one in particular comes to mind. The 2023 Small Business Awards – not only being able to sponsor the Technoprenueur category but also getting to spend the evening alongside all the finalists. Our team met so many incredible people that evening, connections that have extended into 2024. This year, we are incredibly proud to sponsor the Indigenous Entrepreneur of the Year award. It’s so important to acknowledge the important impact SMEs have in their local communities and the awards do just that. 

Can you share a success story of a Canadian small business that has thrived by leveraging Xero’s platform?

When I think about Xero’s impact as a platform and tool for small business – cash flow visibility is a core item that pops up. Two examples of small business customers that have shared how Xero has positively impacted their operations. 

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Amy and Brett from Goldilocks Goods – Their mission is to tackle plastic pollution around the world. Brett took Amy’s work from the first six months of running her business as a sole proprietor, put it into spreadsheets, and gave it to their accountant who put it straight into Xero. They say they’ve never looked back. They review month over month income statements and use this information to assess where they are spending money and where they might need to reallocate. They also integrate apps with their account so they track every single sale – providing a fulsome report come year end. 

Rob from Micacchi Architecture – After years of experience working at established firms, Rob launched his own venture in 2018. In the early days Rob operated out of spreadsheets, then he moved to another online accounting platform before moving to Xero. Rob works incredibly closely with his accountant, David. Together they create custom reports that show the cash flow in and out of the business and they also have full visibility on the accounts receivable and invoices owed, and can send payment reminders.

Xero places a strong emphasis on collaboration with accountants and bookkeepers. How does this partnership model benefit small businesses, and what tools does Xero provide to facilitate this collaboration?

That’s correct – we believe in the power of collaboration between a small business and their advisor and the evolution of their relationship. In fact, we surveyed hundreds of accountants and bookkeepers last year and found that while compliance and payroll services remain prominent, there has been a rise in advisory – giving strategic advice based on data. 41% of practices now offer this service for small businesses. 

By utilizing digital tools like Xero, small businesses and their advisors are able to make strategic decisions together. I like to think of it like a ship at sea – a small business can have the right equipment, the momentum of the wind and be able to weather storms but without a map, it’s going to be a little tougher. Xero provides that map view – so you can make navigation decisions, even better if you can do it with an accountant or bookkeeper, think of them as the local captain who’s navigated that area their whole life. 

Could you give an example of how this collaborative approach has led to significant improvements for a business?

I’d like to bring up Rob from Micacchi again. He and his accountant, David, connect every month. With the real-time financial insights provided by Xero supported by consultation from David, Rob is able to make more informed financial decisions with confidence, including hiring staff and transitioning to new office space to support the firm’s growth. 

With over 1000 third-party apps that Xero connects with, how do you ensure these integrations add value to small businesses without overwhelming them with too many options?

That’s a great question. A couple of years ago we conducted a study around the barriers that stop small businesses from adopting technology and choice paralysis was one of the core reasons why Canadian small businesses don’t. 

We aim to make the choice process a little easier by focusing on the App Store user experience. We have different “categories” and “filters” which allow users to easily navigate to the solution that is suitable to them. For example, you can select CRM for the Hospitality industry, then app suggestions will pop up. We also have collections on the Xero App Store, such as ‘Get started with apps’, featured apps, new and noteworthy, and apps to help with core workflows i.e. scheduling. 

Much like other app stores, the influence of community is really important. Folks are able to rate and provide feedback, so users can refer to other small businesses and their feedback about what works best for them.

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Can you highlight one or two integrations that are particularly beneficial for Canadian SMEs?

Most certainly. There are two in particular I’d like to highlight. First, payments solutions provided through partners such as Stripe (credit cards), GoCardless (account to account transfers) and PayPal or Calgary-based Helcim, DirectPay for Interac.  Second, digital payroll solutions – Wagepoint, Payment Evolution, Rise, Payworks. 

Lastly, what advice would you give to small business owners in Canada who are considering digital transformation, particularly in their accounting practices?

If you’re a micro-business – perhaps starting as a side hustle, keep things as digital as you can for instance taking photos of receipts. So as you grow you’ve already nurtured this behaviour – it’ll be second nature.

If you’re a larger business – harness the insights Xero provides and lean into your relationship with your accountant or bookkeeper. The benefit of a platform like Xero is that it gives you data that your advisor can refer to – giving you both room to have productive and strategic conversations. 

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