"We have plans to go after the accounting channel and small business channel," says Sutherland, whose organization is based in downtown San Francisco. And although  most accounting software vendors have talked about their cloud plans and enlist accountants, Xero claims it is different from most players in that it has built the application for the Web, instead of trying to adopt a desktop package to the Internet.

Sutherland points to outages he says have occurred with Intuit's QuickBooks Online as demonstrating the problems faced by traditional software publishers. Xero, he says, "is also built with the principal in mind that we want to connect advisors with small businesses."

The application employs what the company calls a single ledger in which there is one data set, but different views that are designed to appeal to both accountants and small business users, Sutherland continues. "You have a lens that the accoountant can look through that is a full double-entry system," he says. "We have a lens that a small business can utilize. It's a very simplistic dashboard a small business can view." The target market for the application is companies with 100 or fewer employees, although Sutherland says the system can hand up to 500-employee operations. And some of the technology leaders who got an early view of the product think it can go upstream easily.

Xero has partnered with Yodlee to get access 5,000 direct bank feeds in the United States and 6,000 internationally. Sutherland claims that relationship has "revolutionized the way bank reconciliation works. The company says another plus is that there is no file transfer or the need to worry about users and clients having different versions of the software. Xero also lets the accountant bring the small businesses "on the platform, but lets them maintain the billing relationship with those clients," he says. "If an accountant is a user ofXero and they bring a small business on the platform, we will put that accountant on a discounted basis."

Right now Xero has about 60,000 customers, primarily outside the United States. But Sutherland says that the acquisition rate is increasing. And while the company had three employees in the California office in December; it now has six and expects to keep growing the staff.

Xero has three editions. For $19 per month, the Small plan gives users to send and receive five invoices and to reconcile 20 bank statement lines per month. The Medium plan offers unlimited invoices and bank reconciliation for $29 monthly while for $39 per month, the large plan adds multicurrency to the Medium plan's features.

The company said revenue for fiscal 2012 the roughly $7.7 million reported in fiscal 2011. That represents the current exchange value of the $9.3 million in revenue reported last year in New Zealand dollars. The company also said that the number of worldwide users is now 60,000 with 240,000 user accounts, which is up from the 50,000 paying customers the company has been reporting of the last few months.