Xero has added online invoicing to its list of services, claiming to have changed the accounting game in the process.

The software provider's latest announcement stems from six years work, as the company continues building accounting on the web.

With over 100,000 businesses now running on Xero, the company says the aim of building a full accounting system is to connect small business owners to their accountants, bookkeepers, banks and other business solutions.

Online invoicing enables businesses to share invoices electronically online, reduces the rekeying of business data and improves business cash flow by speeding up presentation, data entry and payment of invoices.

This is the start of the next generation of accounting where businesses are not only connected to the information they need but to each other, says Rod Drury, Xero CEO.

“Like many great ideas online invoicing seems simple, but the implications of connecting small business electronically and at scale are huge.”

Drury says millions of hours are wasted each year as small business owners rekey invoices that were generated in another accounting system.

“When we started Xero, providing automated daily bank feeds into accounting software was a game changer," he says.

"Now it is functionality that is expected.

"Online invoicing is the next big thing and as it is adopted it will materially improve productivity at a national scale over time.”

More information on Xero’s online invoicing click here