Xero announced today that it had signed an agreement to acquire Australian online payroll provider Paycycle.
The payroll software would be integrated into Xero’s online accounting program in the first quarter of 2012, Chris Ridd, Xero’s managing director of Australia and New Zealand, said in the company blog.
The addition would greatly improve Xero’s current payroll function which was comparatively basic and had been released four months earlier. The Xero payroll “was never designed as a full payroll solution,” Ridd said.
Xero would continue to work with other third-party payroll providers such as WEBPayroll, ePayroll and CloudPayroll, Ridd said.
“It’s clear that an integrated and more fully featured offering is needed in Australia. It’s just expected that this will be part of the accounting software,” Ridd said.
PayCycle would continue to be sold as a stand-alone product until the integration was complete. Xero would offer the payroll software at no extra cost to users once it was part of the Xero platform, Ridd said.