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Rapidly growing accounting firm Armanino has adopted Xero, the low-end online software from New Zealand, for providing outsourced accounting services to its clients. It's a big win for the rapidly growing application company, which is still very small compared to its competitors.

The deal shows "that our product is meeting the needs of accounting firms of all sizes," says Jamie Sutherland, president of U.S. operations for Xero.

While Armanino is picking up the product, that does not affect its use of Intacct to provide outsourced services, a spokesman said.  "We are not moving away from Intacct for outsourced accounting," he said. "We're just accommodating different clients in different stages of growth with different products that meet their needs."

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