December 1, 2018

Xero Review: Is It Good?

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Do you find yourself looking at accounting software by the "known name brands"? You may not want to overlook the abilities of the lesser-known companies that stand to offer user-friendly programs that pack a punch.

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Xero is one of those accounting programs that you may not have heard of yet, but it offers features you may not see elsewhere. Xero is a cloud-based accounting system that can help businesses stay on top of their accounting by offering unlimited access from anywhere.

All you need is an internet connection and a web-enabled device to log into your Xero account. As a small business accounting program, Xero uses double-entry accounting and helps you track sales, invoices, bills, cash flow, inventory, and payroll, all in one system. You can automatically upload your bank transactions and even pay your bills online.

You can set up customer records, create loyalty programs, or targeted promotions. You can also process your employee payroll, helping you to keep all of your bookkeeping in one place. This could mean less confusion and more time spent building a great business.

Should you consider Xero for your accounting needs? Keep reading to see just how it works.

Who Is Xero Best For?

Xero was designed for mid-sized companies with payroll needs. However, any business can utilize their services, whether large or small. You just need to know the parameters of what each plan offers to see if it fits within your company's needs and budget.

Contacting Xero Customer Service
Xero doesn't offer phone support, which some see as a downside. However, they do have robust customer service options to make up for the lack of phone support. First, they are available 24/7. You can email, chat online, or search for your question in their robust Help Center. If you don't find the answer you need, Xero provides the opportunity to email customer service right from their site, with a promise of a 24-hour or less response time.

Reasons We Like Xero

  • You can sign up an unlimited number of users. Many accounting software programs limit you to a certain number of users. If you need access for more users, it usually costs you more money. Xero allows an unlimited number of users in any program, even the lowest. You can even invite your accountant to collaborate with you in the software program.

  • You have multiple plans you can choose from for your business. This allows you to tailor your accounting software to your needs. You don't have to pay for services that you won't use, which may save you money in the end.

  • You can process payroll with your accounting software. It's rare to find accounting software that also offers payroll services. The fact that Xero can process payroll for up to 100 employees with their largest plan gives you a lot of flexibility. It also helps you keep your bookkeeping process concise and accurate.

  • The accounting software is web-based, which gives you 24/7 access to your books. You can log in any day of the week at any time and get real-time updates on your cash flow. You can log in on your PC, mobile phone, or tablet and see the same information.

  • Xero integrates with a large number of third-party software systems. You can customize the functions of your Xero software by integrating with their list of more than 700 business apps, including PayPal, Stripe, Square, Vend, and Paychex, just to name a few.

  • You can send invoices online and get updated on their status in real-time. Xero notifies you when your clients open the invoices, offers automated reminders, and allows clients to pay you online for even faster processing.

  • You can get updated inventory in real-time. Anytime you want, you can check inventory levels, inventory values, learn which products are selling the best, and which products are running low so that you can purchase and replenish quickly.

  • Xero offers extensive support in setting up your account for the first time. When you open a never-before used feature, you'll receive video and instructional pop-ups to guide you through the process. You can also search in the Help Center if you have a specific issue. Their video library is also filled with helpful tutorials.

  • The dashboard gives you an instant glance of all aspects of your company's finances. You can see your bank accounts, outstanding invoices, and outstanding bills, all on one page. You can instantly see if you have overdue bills or overdue payments. You can also customize the dashboard to suit your needs, if you prefer different information to show up upon logging into the system.

  • You can automatically import your bank statements for easy reconciling. You can set up automatic import or manual, but either way, the information is synced with Xero quickly. Xero will categorize repeat transactions for you, but you will have to go through line by line and approve each transaction.

Reasons You May Want to Look Elsewhere

  • The Starter plan, which is the most affordable, has very limited functionality. Unless you send fewer than 5 invoices a week, have no more than 5 bills, and no more than 20 bank transactions, you'll have to pay the steeper cost of the Standard Plan, which may apply to a large majority of businesses. Only sole proprietors or very small companies can get by with the smallest plan.

  • Xero offers very few invoice customizations. Aside from adding your logo or branding theme, the invoices aren't very customizable. If you have a specific look you are after or you are used to a specific invoice format, you may be sorely disappointed with the lack of customization offered in Xero.

  • The Xero app is lacking in functionality. If you were hoping that the Xero app was a mirror image of the software program, you may be disappointed. You can only access limited functions on the app. It's basically another way to check your cash flow at a moment's notice, but you can't use any of the robust features of the program unless you are on your PC.


As we stated above, Xero has several programs to choose from, but the Basic plan only applies to very small businesses without any employees.

  • Basic Plan: While it's the least expensive plan at $9/month, the Basic Plan only allows you to send 5 invoices, pay 5 bills, and reconcile 20 bank transactions. If you do anything beyond that, you'll want to jump to the next plan, which is more than double in price.

  • Standard Plan: The Standard Plan costs $30/month and allows you to process unlimited invoices, bills, and bank transactions. It also allows you to process payroll for up to 5 employees.

  • Premium 10 Plan: The Premium 10 plan costs $70/month and has the same features as the standard plan, with the exception of the ability to run payroll for 10 people and operate in multiple currencies.

Xero also offers a Premium 20 and Premium 100 plan; the only differences are the number of employees you can process payroll for each month.

How It Compares

  • QuickBooks Online: QuickBooks Online is the household name for cloud accounting software. Where Xero has QuickBooks beat is customer service and the unlimited number of users they allow. QB Online wins with its app with greater features and its longtime reputation. Both programs cost about the same amount and offer similar features, though.

  • Sage: Sage Business Cloud offers features similar to Xero with the exception of processing payroll. It does offer a robust mobile app that has more features than Xero (such as turning quotes into invoices on-the-fly), but if processing payroll in your accounting software is important to you, Xero is the better option.

  • MYOB: MYOB is another player in the cloud-based accounting software industry. They too offer features similar to Xero, including payroll processing. The largest difference is their presence of phone customer support. Customer support representatives are available 7 days a week from 9 AM - 5 PM.

Bottom Line

If you are looking to make the switch to cloud-based accounting software and you'll use all of the features Xero offers, including payroll, it may be worth the cost each month. However, just as with any other business decision, it's important to shop around to compare your options and see which program offers the best solution for your business.

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