Based out of New Zealand, Xero has been around since 2006. Today, it has offices around the world, and has attracted more than one million users in over 180 countries. The company has been named the Forbes #1 Innovative Growth Company twice, and is said to be the primary accounting solution for more than 16,000 accounting firms.

As a leading contender in the world of accounting software, Xero offers strong customer service and an exceptional set of features. Providing an expansive range of technical support, Xero offers valuable features that include unlimited users, strong permissions settings, bulk invoicing, and inventory tracking. Add to that all the little details on offer that make everyday accounting so much simpler for small businesses, and it’s easy to see why Xero is so popular.

While it may be lagging behind bigger competitors in terms of its limited invoicing choices, lack of project management and job-costing features, weak mobile apps, and incomplete payroll support, Xero is always updating its software to offer improvements. So, it may not be long before these issues are addressed and improved, allowing users to enjoy its “beautiful accounting software” to its full capacity.

What does Xero offer?

Designed for small and growing businesses, Xero is a web-based accounting system that can be accessed from any device with an active internet connection. Providing a range of robust accounting features, Xero makes it easy to view business cash flows, transactions and account details from any location.

Online bill pay helps keep track of spending and stay on top of bills due, and personal expenses can be managed with mobile review and approval of each receipt. Offering unlimited user support and integration with a variety of systems, including ADP, Bill.com and Vend, Xero also allows bank transactions to be automatically imported and coded for total ease of use.

Pricing

If you’re new to Xero and want to test out its features and functionality, you can opt for the company’s 30-day free trial. If after the initial trial period, you decide Xero is right for your business, there are five scalable plans you may choose from. It’s worth noting that Xero provides a 25% discount for non-profit organisations, and a 15% discount for users with multiple companies registered on Xero.

Starter: $9 per month

  • Expense tracking
  • 5 invoices and quotes
  • Reconcile 20 bank transactions
  • 5 bills
  • Live bank feeds
  • Customisable reports
  • W2’s and 1099’s

Standard: $30 per month

  • Expense tracking
  • Unlimited invoices and quotes
  • Unlimited bank transactions
  • Unlimited bills
  • Live bank feeds
  • Customisable reports
  • W2’s and 1099’s
  • Payroll for 5
  • Direct deposit

Premium: $70 per month

  • Expense tracking
  • Unlimited invoices
  • Unlimited bank transactions
  • Unlimited bills
  • Live bank feeds
  • Customisable reports
  • W2’s and 1099’s
  • Payroll for 10
  • Direct deposit
  • Multi-currency support

Premium 20: $90 per month

  • Expense tracking
  • Unlimited invoices
  • Unlimited bank transactions
  • Unlimited bills
  • Live bank feeds
  • Customisable reports
  • W2’s and 1099’s
  • Payroll for 20
  • Direct deposit
  • Multi-currency support

Premium 100: $180 per month

  • Expense tracking
  • Unlimited invoices
  • Unlimited bank transactions
  • Unlimited bills
  • Live bank feeds
  • Customisable reports
  • W2’s and 1099’s
  • Payroll for 100
  • Direct deposit
  • Multi-currency support

Features

One of the most attractive things about Xero is its extensive range of features. These are the types of features small businesses will find most useful, providing excellent functionality and useability.

Dashboard: Offering an appealing user-interface, Xero provides a customisable dashboard, complete with graphs displaying your bank accounts, invoices owed to you, bills you need to pay, expense claims, and other business performance graphs.

Estimates: While the estimate feature may be basic, it is efficient. Xero provides a single estimate template that allows you to program default terms and conditions, and can easily be converted into an invoice.

Accounts Receivable: Helping to save time on recurring, everyday tasks, Xero allows for recurring invoices, automatic invoice reminders, default payment settings, bulk invoicing, and previous invoice replication. But with just one invoice template, Xero lacks customisation options. You may choose to upload your own template.

Accounts Payable: Offering further time-saving features in this area, Xero allows users to create recurring bills and purchase orders. You can also make batch payments, enable recurring bills, and attach important documents or photos of the bill to Xero.

Contact Management: Allowing users to add basic contact information, Xero also lets you create contact groups and smart lists. These can act as marketing tools, making it easy to target certain groups of contacts, or alternatively, invoice an entire group at once.

Bank Reconciliation: Utilising a smart categorisation feature, Xero remembers past transaction categories, to automatically categorise new transactions. Users can choose to set up live bank feeds or import bank statements manually.

Inventory: Xero allows users to save items under inventory with its corresponding item code, price, account, tax rate, and picture. Tracking inventory can record stock levels, average purchase costs, and the number of items committed to quotes.

Payroll: Only available through Standard and Premium options, Xero payroll is available in New Zealand, Australia, the UK, and 37 US states. Simple to use and extensive, it allows you to customise pay schedules and keep track of benefits, deductions, overtime, bonuses, sick days, paid vacations, time-off requests, and employee earnings.

Reports: Providing a comprehensive reporting system, Xero offers 65 reports, covering everything from basic balance sheets and aged payables to detailed budgets and depreciation schedules. You can customise reports, and save favourite reports for quick access.

As they are wide-ranging, it’s not possible to go into detail on all Xero’s features here. However, users may find its user permissions, default emails, tracking capabilities, expense claims function, multi-currency function, import/export capabilities, and its tax support to be very useful indeed.

Pros and Cons

With so much on offer, weighing up the pros and cons becomes a little more tricky. Which is why we’ve created this easy-to-read pros and cons list. Worth checking out the free 30-day trial? Check out the pros and cons of Xero to find out.

Pros

Easy to use

While there may be something of a learning curve to Xero, it is easy to use overall. This is one reason many accountants like Xero, as they can teach their clients how to use it quickly.

Extensive feature selection

As we have already seen, Xero has a huge range of features, providing almost endless functionality to users.

Mobility

As Xero is cloud-based, it is perfectly portable. As long as you have an internet connection, you can access your accounts. While the mobile apps offer added functionality, they need some work to make them as efficient as the desktop version.

Plenty of integrations

Helping to make the process of running a business much smoother, Xero has more than 500 integrations, including PayPal, Stripe, Shopify, Insightly CRM, WorkflowMax and Vend. Xero also integrates with Zapier, connecting the software to hundreds of additional add-ons.

Security

With a reputation for some of the strongest cloud security in the business, Xero offers security measures that include data encryption, two-step authentication, and 24/7 monitoring at multiple locations. A daily backup is carried out across various servers, and regular security audits are performed.

Cons

       x   Lack of invoice templates

As mentioned previously, Xero offers just one invoicing template and very few customisation options.

       x   Time-consuming CSV imports

Making setup a much longer process than it should be, Xero makes importing .csv files a long and tedious process, involving downloading Xero’s unique invoice formats and reconfiguring your file to fit their templates.

       x   No projects/job costing feature

While there are integrations that allow you to add this feature, Xero itself doesn’t offer it as standard, which may be a deal breaker for some users.

       x   Limited payroll

Again, this will not affect all users, as long as they are in a location that offers payroll support.

       x   Underwhelming mobile app

Lacking in functionality, Xero’s mobile apps don’t allow users to access many of the features offered on the desktop version. Users also complain of bugs and crashes.

Decision Time

Offering an abundance of features, Xero provides an exceptionally functional accounting software package to small and medium size businesses. While premium versions may be somewhat costly, the functionality on offer may be worth the extra cost.