Founded by former Xero exec Nick Houldsworth, with investment from entrepreneurs like Michael Wood (Dext, Translucent) Jamie McDonald (Hubdoc, A2X) and others, Prosaic is an innovative new product that combines a streamlined personal finance experience with an automated business expenses app - leveraging AI and open banking to identify common tax deductions from personal bank, card and loan accounts.  

With their just released Xero integration, small business users and their accountants can now sign up, subscribe and instantly post expenses into Xero as a draft bill or journal, all via the Prosaic app store listing at https://apps.xero.com/nz/app/prosaic.

Background:

• Founded by Nick Houldsworth (former EGM Xero App Store, CMO Vend) and Rowan Oulton (Senior Engineer, Slack), Prosaic leverages AI to enable sole traders and small businesses to automatically find and share business expenses from personal financial data.
• The product has been in beta in NZ through late 2023 and since early 2024 has been rolling out to pilot accounting firm customers, including Rightway, Connected Accountants, Fantail Finances and more.
• They recently raised $700,000 in seed funding, drawing backing from notable NZ tech figures including Vaughan Fergusson (Vend), Ryan Baker (Timely), Paul Grey (A2X), and Rowan Simpson (Trade Me, Vend, Timely), as well as international investment from well known players in the Xero ecosystem, Michael Wood (Receipt Bank/Dext, Translucent) and Jamie McDonald (Hubdoc, A2X)

• With the release in the Xero app store, Prosaic is now available directly to SMB users for NZD $10 per month (+GST) with a free 7-day trial.
• Currently available in New Zealand, the team are exploring plans to bring Prosaic to other markets soon.

What problem does Prosaic solve?

• Xero bank feeds and tools like expenses and Hubdoc have been game changing for real time tracking of business income and expenses.
• But many small businesses and sole traders have messy finances, often running a home office where a portion of spend on personal credit cards (like power bills, or use of personal motor vehicles) is eligible for tax deduction. This can lead to hundreds of small or partial deductions every year, which are hard to track.
• Modern expense apps aren’t well suited to handle this, and connecting personal bank feeds to Xero leads to messy bulk coding and errors, so the most common approach used today is to wait until long after the financial year end finishes, and spend hours trawling through emails, bank and credit card statements, then putting everything into a long, complex worksheet to send to your accountant.
• Many small business and sole traders simply don’t bother, missing out on $1000s of eligible deductions. Those that do, often make errors. And for accountants, this is often the most pain, time consuming information to gather at year end, holding up tax returns, and costing admin time.

How does Prosaic solve this:

• Prosaic connects to personal bank, card, and mortgage accounts, via open finance partner Akahu, using AI to find and code business expenses automatically.
• Its AI and fast user interface is designed to make light work of analysing thousands of transactions from multiple bank sources, then instantly share partial or full business deductions with an accountant, or directly into Xero.
• Prosaic can also retrieve up to two years of transaction history for backdated claims, allowing users to perform a full previous financial year of claims, in minutes.
• Then with live bank feeds, in minutes every month, users can find, claim and share expenses into Xero, or with their accountant, securing critical cashflow (in the form of tax exempt reimbursements) toward their personal running costs. So important during tough economic times.

Nick Houldsworth says, “we designed Prosaic to solve a pain point I’ve had with Xero ever since I started using it back in 2009. Finding, syncing and claiming common business expenses from a range of personal bank data has always been a challenge - I tried Xero personal back in the day, then more recently, dedicated personal finance apps like Pocketsmith, but I didn’t really need all the features of a personal finance product (like budgets and tracking), I simple wanted a light layer over a range personal bank accounts (to quickly find, portion and categorise transactions), then a deep integration with Xero (to instantly send those into Xero). It used to take me a few hours every GST return to pull across these expenses. It now takes me under a minute. For an average of $500 of deductions every month (things like mortgage interest, power bills), that’s the best hourly rate I’ve ever earned!”

Benefits for Users:

• Businesses & Sole Traders: Saves hours of manual work, ensures all deductions are claimed, and improves cash flow by enabling monthly reimbursements.
• Accountants & Bookkeepers: Provides real-time data access, allowing for timely tax returns without waiting for clients to complete long checklists or worksheets for home office and motor vehicle spend from personal accounts.

Integration and Ease of Use:

Prosaic offers a best-in-class, deep integration with Xero. Users can sign up and try Prosaic instantly via the Xero app store, and subscribe after a 7 day free trial.

For small business users, any expense claims from Prosaic can then be posted to Xero as a draft bill, automatically mapped to common account codes in Xero (like Lighting, Power, Heating, or Motor Vehicle Expenses) providing granular expense reporting, and improved cash flow.

Accountants and bookkeepers have an additional layer of features, with a client dashboard to invite clients (individually, or in bulk), then review and post expenses as either a bill or journal. On average, Prosaic reduces year end tasks per client by as much as half, providing visibility into a range of financial information they previously could only gather with long checklists and spreadsheet templates - which causes admin delays and poor client experience.

Customer Reviews

SMB / Sole Traders

“This app is saving me so much time and frustration!  It is easy to navigate and simply picks up all my business expenses I would normally have to find manually and sends them straight to Xero. Game changer!” - Carla Van Vorst

“As a small business owner Prosaic has been an absolute game changer. I’ve simply connected it up to my personal bank accounts and it automatically pulls home office expenses that I’d never have thought to claim and exports them to Xero so it’s all done at the press of the button. It’s wonderful.” - Nicola Riordan

Accountants / Bookkeepers

“The clever team at Prosaic have designed such a clever tool to take the pain out of collecting accurate home office information using AI. Its super easy to use, and almost instantly delivers accurate figures from our client's personal and mortgage bank accounts - plus it allows us to easily assess and amend the selection and categorisation of expenses, which the software then remembers for next time. Such a game changer and means we can avoid the familiar bottle neck of waiting for clients to manually find their home office information. Also the team at Prosaic are very lovely and helpful and have been stellar in supporting our team and our clients as we embed this software into our year end processes” - Alecia McCulloch, Fantail Finances

“Prosaic is fantastic! Great for clients who use personal bank accounts frequently for business expenses or directors wanting to make more regular home office claims instead of at year end! 

Great interface and user friendly from both an accountant and client perspective.” - Rachel Dickie, Connected Accountants