How to integrate Xero MCP with OpenAI Agents SDK

This guide walks you through connecting Xero to the OpenAI Agents SDK using the Composio tool router. By the end, you'll have a working Xero agent that can list all active xero tenant connections, show latest contacts added this week, retrieve all open quotes for this month through natural language commands. This guide will help you understand how to give your OpenAI Agents SDK agent real control over a Xero account through Composio's Xero MCP server. Before we dive in, let's take a quick look at the key ideas and tools involved.

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Xero is cloud-based accounting software for small businesses, offering invoicing, bookkeeping, and real-time financial reports. It helps you manage business finances efficiently from anywhere.

41 Tools

Introduction

This guide walks you through connecting Xero to the OpenAI Agents SDK using the Composio tool router. By the end, you'll have a working Xero agent that can list all active xero tenant connections, show latest contacts added this week, retrieve all open quotes for this month through natural language commands.

This guide will help you understand how to give your OpenAI Agents SDK agent real control over a Xero account through Composio's Xero MCP server.

Before we dive in, let's take a quick look at the key ideas and tools involved.

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TL;DR

Here's what you'll learn:
  • Get and set up your OpenAI and Composio API keys
  • Install the necessary dependencies
  • Initialize Composio and create a Tool Router session for Xero
  • Configure an AI agent that can use Xero as a tool
  • Run a live chat session where you can ask the agent to perform Xero operations

What is OpenAI Agents SDK?

The OpenAI Agents SDK is a lightweight framework for building AI agents that can use tools and maintain conversation state. It provides a simple interface for creating agents with hosted MCP tool support.

Key features include:

  • Hosted MCP Tools: Connect to external services through hosted MCP endpoints
  • SQLite Sessions: Persist conversation history across interactions
  • Simple API: Clean interface with Agent, Runner, and tool configuration
  • Streaming Support: Real-time response streaming for interactive applications

What is the Xero MCP server, and what's possible with it?

The Xero MCP server is an implementation of the Model Context Protocol that connects your AI agent and assistants like Claude, Cursor, etc directly to your Xero account. It provides structured and secure access to your accounting data, so your agent can retrieve contacts, manage connections, update invoices, and monitor quotes automatically on your behalf.

  • Connection management: Instantly list all active Xero tenant connections linked to your account, making it easy for your agent to select and operate on the right organization.
  • Contact retrieval and lookup: Fetch detailed, up-to-date lists of business contacts including filtering, paging, and incremental updates to keep your records synchronized and actionable.
  • Quote management and tracking: Retrieve, filter, or search through your sales quotes so your agent can help you stay on top of prospective business and follow up faster.
  • Invoice updating and automation: Modify details of existing invoices—such as amounts, due dates, and line items—allowing your agent to keep your invoicing accurate and up to date without manual edits.

What is the Composio tool router, and how does it fit here?

What is Composio SDK?

Composio's Composio SDK helps agents find the right tools for a task at runtime. You can plug in multiple toolkits (like Gmail, HubSpot, and GitHub), and the agent will identify the relevant app and action to complete multi-step workflows. This can reduce token usage and improve the reliability of tool calls. Read more here: Getting started with Composio SDK

The tool router generates a secure MCP URL that your agents can access to perform actions.

How the Composio SDK works

The Composio SDK follows a three-phase workflow:

  1. Discovery: Searches for tools matching your task and returns relevant toolkits with their details.
  2. Authentication: Checks for active connections. If missing, creates an auth config and returns a connection URL via Auth Link.
  3. Execution: Executes the action using the authenticated connection.

Step-by-step Guide

Step by step09 STEPS
1

Prerequisites

Before starting, make sure you have:
  • Composio API Key and OpenAI API Key
  • Primary know-how of OpenAI Agents SDK
  • A live Xero project
  • Some knowledge of Python or Typescript
2

Getting API Keys for OpenAI and Composio

OpenAI API Key
  • Go to the OpenAI dashboard and create an API key. You'll need credits to use the models, or you can connect to another model provider.
  • Keep the API key safe.
Composio API Key
3

Install dependencies

npm install @composio/openai-agents @openai/agents dotenv

Install the Composio SDK and the OpenAI Agents SDK.

4

Set up environment variables

bash
OPENAI_API_KEY=sk-...your-api-key
COMPOSIO_API_KEY=your-api-key
USER_ID=composio_user@gmail.com

Create a .env file and add your OpenAI and Composio API keys.

5

Import dependencies

import 'dotenv/config';
import { Composio } from '@composio/core';
import { OpenAIAgentsProvider } from '@composio/openai-agents';
import { Agent, hostedMcpTool, run, OpenAIConversationsSession } from '@openai/agents';
import * as readline from 'readline';
What's happening:
  • You're importing all necessary libraries.
  • The Composio and OpenAIAgentsProvider classes are imported to connect your OpenAI agent to Composio tools like Xero.
6

Set up the Composio instance

dotenv.config();

const composioApiKey = process.env.COMPOSIO_API_KEY;
const userId = process.env.USER_ID;

if (!composioApiKey) {
  throw new Error('COMPOSIO_API_KEY is not set. Create a .env file with COMPOSIO_API_KEY=your_key');
}
if (!userId) {
  throw new Error('USER_ID is not set');
}

// Initialize Composio
const composio = new Composio({
  apiKey: composioApiKey,
  provider: new OpenAIAgentsProvider(),
});
What's happening:
  • dotenv.config() loads your .env file so COMPOSIO_API_KEY and USER_ID are available as environment variables.
  • Creating a Composio instance using the API Key and OpenAIAgentsProvider class.
7

Create a Tool Router session

// Create Tool Router session for Xero
const session = await composio.create(userId as string, {
  toolkits: ['xero'],
});
const mcpUrl = session.mcp.url;

What is happening:

  • You give the Tool Router the user id and the toolkits you want available. Here, it is only xero.
  • The router checks the user's Xero connection and prepares the MCP endpoint.
  • The returned session.mcp.url is the MCP URL that your agent will use to access Xero.
  • This approach keeps things lightweight and lets the agent request Xero tools only when needed during the conversation.
8

Configure the agent

// Configure agent with MCP tool
const agent = new Agent({
  name: 'Assistant',
  model: 'gpt-5',
  instructions:
    'You are a helpful assistant that can access Xero. Help users perform Xero operations through natural language.',
  tools: [
    hostedMcpTool({
      serverLabel: 'tool_router',
      serverUrl: mcpUrl,
      headers: { 'x-api-key': composioApiKey },
      requireApproval: 'never',
    }),
  ],
});
What's happening:
  • We're creating an Agent instance with a name, model (gpt-5), and clear instructions about its purpose.
  • The agent's instructions tell it that it can access Xero and help with queries, inserts, updates, authentication, and fetching database information.
  • The tools array includes a hostedMcpTool that connects to the MCP server URL we created earlier.
  • The headers object includes the Composio API key for secure authentication with the MCP server.
  • requireApproval: 'never' means the agent can execute Xero operations without asking for permission each time, making interactions smoother.
9

Start chat loop and handle conversation

// Keep conversation state across turns
const conversationSession = new OpenAIConversationsSession();

// Simple CLI
const rl = readline.createInterface({
  input: process.stdin,
  output: process.stdout,
  prompt: 'You: ',
});

console.log('\nComposio Tool Router session created.');
console.log('\nChat started. Type your requests below.');
console.log("Commands: 'exit', 'quit', or 'q' to end\n");

try {
  const first = await run(agent, 'What can you help me with?', { session: conversationSession });
  console.log(`Assistant: ${first.finalOutput}\n`);
} catch (e) {
  console.error('Error:', e instanceof Error ? e.message : e, '\n');
}

rl.prompt();

rl.on('line', async (userInput) => {
  const text = userInput.trim();

  if (['exit', 'quit', 'q'].includes(text.toLowerCase())) {
    console.log('Goodbye!');
    rl.close();
    process.exit(0);
  }

  if (!text) {
    rl.prompt();
    return;
  }

  try {
    const result = await run(agent, text, { session: conversationSession });
    console.log(`\nAssistant: ${result.finalOutput}\n`);
  } catch (e) {
    console.error('Error:', e instanceof Error ? e.message : e, '\n');
  }

  rl.prompt();
});

rl.on('close', () => {
  console.log('\n👋 Session ended.');
  process.exit(0);
});
What's happening:
  • The program prints a session URL that you visit to authorize Xero.
  • After authorization, the chat begins.
  • Each message you type is processed by the agent using run().
  • The responses are printed to the console.
  • Typing exit, quit, or q cleanly ends the chat.

Complete Code

Here's the complete code to get you started with Xero and OpenAI Agents SDK:

import 'dotenv/config';
import { Composio } from '@composio/core';
import { OpenAIAgentsProvider } from '@composio/openai-agents';
import { Agent, hostedMcpTool, run, OpenAIConversationsSession } from '@openai/agents';
import * as readline from 'readline';

const composioApiKey = process.env.COMPOSIO_API_KEY;
const userId = process.env.USER_ID;

if (!composioApiKey) {
  throw new Error('COMPOSIO_API_KEY is not set. Create a .env file with COMPOSIO_API_KEY=your_key');
}
if (!userId) {
  throw new Error('USER_ID is not set');
}

// Initialize Composio
const composio = new Composio({
  apiKey: composioApiKey,
  provider: new OpenAIAgentsProvider(),
});

async function main() {
  // Create Tool Router session
  const session = await composio.create(userId as string, {
    toolkits: ['xero'],
  });
  const mcpUrl = session.mcp.url;

  // Configure agent with MCP tool
  const agent = new Agent({
    name: 'Assistant',
    model: 'gpt-5',
    instructions:
      'You are a helpful assistant that can access Xero. Help users perform Xero operations through natural language.',
    tools: [
      hostedMcpTool({
        serverLabel: 'tool_router',
        serverUrl: mcpUrl,
        headers: { 'x-api-key': composioApiKey },
        requireApproval: 'never',
      }),
    ],
  });

  // Keep conversation state across turns
  const conversationSession = new OpenAIConversationsSession();

  // Simple CLI
  const rl = readline.createInterface({
    input: process.stdin,
    output: process.stdout,
    prompt: 'You: ',
  });

  console.log('\nComposio Tool Router session created.');
  console.log('\nChat started. Type your requests below.');
  console.log("Commands: 'exit', 'quit', or 'q' to end\n");

  try {
    const first = await run(agent, 'What can you help me with?', { session: conversationSession });
    console.log(`Assistant: ${first.finalOutput}\n`);
  } catch (e) {
    console.error('Error:', e instanceof Error ? e.message : e, '\n');
  }

  rl.prompt();

  rl.on('line', async (userInput) => {
    const text = userInput.trim();

    if (['exit', 'quit', 'q'].includes(text.toLowerCase())) {
      console.log('Goodbye!');
      rl.close();
      process.exit(0);
    }

    if (!text) {
      rl.prompt();
      return;
    }

    try {
      const result = await run(agent, text, { session: conversationSession });
      console.log(`\nAssistant: ${result.finalOutput}\n`);
    } catch (e) {
      console.error('Error:', e instanceof Error ? e.message : e, '\n');
    }

    rl.prompt();
  });

  rl.on('close', () => {
    console.log('\nSession ended.');
    process.exit(0);
  });
}

main().catch((err) => {
  console.error('Fatal error:', err);
  process.exit(1);
});

Conclusion

This was a starter code for integrating Xero MCP with OpenAI Agents SDK to build a functional AI agent that can interact with Xero.

Key features:

  • Hosted MCP tool integration through Composio's Tool Router
  • SQLite session persistence for conversation history
  • Simple async chat loop for interactive testing
You can extend this by adding more toolkits, implementing custom business logic, or building a web interface around the agent.
TOOLS

Supported Tools

Every Xero action and event your agent gets out of the box.

Create Bank Transaction

Create a bank transaction in Xero.

Create Contact

Create a new contact in Xero.

Create Invoice

Create a new invoice in Xero.

Create Item

Create an inventory item in Xero.

Create Manual Journal

Create one or more manual journals (journal entries) in Xero with journal lines.

Create Payment

Create a payment in Xero to link an invoice with a bank account transaction.

Create Purchase Order

Create a purchase order in Xero to order goods/services from suppliers.

Get Account

Retrieve a specific account from Xero's chart of accounts by its unique ID.

Get Asset

Retrieve a specific asset by ID from Xero.

Get Balance Sheet Report

Retrieve Balance Sheet report from Xero.

Get Budget

Retrieve a budget from Xero.

Get Connections

Tool to list active Xero connections.

Get Contacts

Tool to retrieve a list of contacts.

Get Invoice

Retrieve a specific invoice by ID from Xero.

Get Item

Retrieve a specific item by ID from Xero.

Get Manual Journal

Retrieve a specific manual journal by ID from Xero.

Get Organisation

Retrieve organisation details from Xero.

Get Profit & Loss Report

Retrieve Profit & Loss report from Xero.

Get Project

Retrieve a specific project by ID from Xero.

Get Purchase Order

Retrieve a specific purchase order by ID from Xero.

Get Quotes

Tool to retrieve a list of quotes.

Get Trial Balance Report

Retrieve Trial Balance report from Xero.

List Accounts

Retrieve chart of accounts from Xero.

List Assets

Retrieve fixed assets from Xero.

List Attachments

List all attachments for a specific entity in Xero (invoice, contact, etc.

List Bank Transactions

Retrieve bank transactions from Xero.

List Credit Notes

Retrieve list of credit notes from Xero.

List Files

Retrieve files from Xero Files.

List Folders

Retrieve folders from Xero Files.

List Invoices

Retrieve a list of invoices from Xero.

List Items

Retrieve items (inventory/products) from Xero.

List Journals

Retrieve journals from Xero.

List Manual Journals

Retrieve manual journals from Xero.

List Payments

Retrieve list of payments from Xero.

List Projects

Retrieve projects from Xero.

List Purchase Orders

Retrieve list of purchase orders from Xero.

List Tax Rates

Retrieve tax rates from Xero.

List Tracking Categories

Retrieve tracking categories from Xero.

Update Invoice

Tool to update an existing invoice.

Update Contact

Update an existing contact in Xero.

Upload Attachment

Upload a file attachment to a Xero entity (invoice, contact, etc.

FAQ

Frequently asked questions

With a standalone Xero MCP server, the agents and LLMs can only access a fixed set of Xero tools tied to that server. However, with the Composio Tool Router, agents can dynamically load tools from Xero and many other apps based on the task at hand, all through a single MCP endpoint.

Yes, you can. OpenAI Agents SDK fully supports MCP integration. You get structured tool calling, message history handling, and model orchestration while Tool Router takes care of discovering and serving the right Xero tools.

Yes, absolutely. You can configure which Xero scopes and actions are allowed when connecting your account to Composio. You can also bring your own OAuth credentials or API configuration so you keep full control over what the agent can do.

All sensitive data such as tokens, keys, and configuration is fully encrypted at rest and in transit. Composio is SOC 2 Type 2 compliant and follows strict security practices so your Xero data and credentials are handled as safely as possible.

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