A web-based software system designed by Xero for startups and small organizations.
Our Rating: 9.1
We recommend Xero for its user-friendly interface, affordability, and unlimited users per subscription. Xero is responsive and intuitive, with core accounting features in billing, invoicing, purchasing, and expense tracking.
However, we would not use Xero if your team requires consistent one-on-one support. Xero does not provide a customer service phone number. Instead, you can reach out via email to create a support ticket or request that an agent call you.
Xero is a cloud-based, double-entry accounting software for small businesses not exceeding 2,000 transactions a month. It aims to improve bookkeeping processes like bank reconciliation and financial reporting. Xero can customize sales tax rates, automate calculations, and prepare sales tax returns.
It provides a comprehensive view of a company’s cash flow by presenting upcoming bills and outstanding invoices in a clear, tabular format. Whether you have its basic or most advanced plan, Xero supports unlimited users for real-time collaboration between your employees, accountants, and financial advisors.
|Usability - 10||Has a navigable, user-friendly interface and core accounting functionalities; uses clear, non-jargon language for better accessibility; bulk reconciliations are unavailable in the Early plan.|
|Support - 7.3||Offers extensive guides and videos on basic accounting practices and software-specific questions; email support is available with a 24-hour response time; customers cannot contact support via phone.|
|Scalability - 9||Simple invoicing and billing functionality for small businesses; offers in-app guidance for accounting beginners; mobile app lacks some functionalities, such as viewing income statements and cash flow reports; does not offer multi-currency at basic plan level like other software.|
|Security - 9.6||Offers multi-factor authentication through the app Xero Verify; exports financial reports into PDF, Excel, and Google Sheets formats; experienced a minor data breach in 2015 but has since remained secure.|
|Value - 8||Similar accounting software offers more functionality at lower price points.|
|Performance - 10||Fast and responsive with no performance issues or lag; dashboards updated in real-time after adding bills and invoices.|
|Key Features - 10||Basic and consistent templates for generating invoices, bills, and purchase orders; account reconciliation presents a side-by-side layout to spot discrepancies easily.|
My assessment of Xero factored in three major functions of accounting software: creating invoices, adding and approving bills, and reconciling transactions.
Creating an invoice in Xero is quick and simple:
We liked that Xero gives you the option to attach files and preview the final look of your invoice at any point in the process.
Quick note: Xero will not auto-save your entries; you must click the “Save” button to commit your invoice or bill to drafts.
Creating an invoice in the mobile accounting app follows the same process, though it’s broken into more steps:
As on desktop, you can then choose to save the invoice as a draft, approve it, or send it via email.
Adding a bill mirrors the invoicing process – we like Xero for its consistent and accessible interface.
We like Xero for its clear, one-to-one comparison layout when reconciling bank line items against your Xero transactions. Here’s how to do that:
The software simplifies this process further by providing written and video guidance on what to do if you encounter differing balances. It also flags Xero transactions that appear to match bank statement lines, making reconciliation more straightforward.
What we don’t like: bulk reconciliation isn’t possible unless you have the Growing or Established plan. Manually reconciling individual line items could be time-consuming for businesses with a larger volume of transactions.
Though Xero provides core accounting functionality in a streamlined interface, it lacks a few key features integral to small businesses:
|Plan||Pricing (No annual billing options)||Features|
|Early||$13/month||Designed for new businesses and the self-employed.
|Growing||$37/month||For growing small businesses. Includes all Early features, plus:
|Established||$70/month||For established businesses. Includes all Growing features, plus:
The average time to become proficient in Xero varies widely, depending on users’ prior knowledge and experience. Xero reports that you can receive certification, free of charge, in approximately 6-8 hours. However, the average time is likely closer to 3-4 weeks as users become more familiar with the software through consistent use.
Xero is not free, though it does provide a free trial of the software for 30 days. Afterward, plans start at $13/month. Wave, Zoho Books, and ZipBooks are a few of our top picks for free accounting software.
Xero does not have built-in payroll capabilities. Instead, you can integrate a payroll add-on called Gusto, recommended for up to 100 employees. It’s a full-service option with unlimited, automated payroll runs and direct deposit. In addition, Gusto pay runs sync seamlessly as Bills in Xero.
Due to its scalability and cost-effectiveness, Xero is a great choice for growing businesses. Because it supports unlimited users, it facilitates employee collaboration and allows them to quickly submit expenses and send invoices. Xero also grows with your company, integrating with your email, customer relationship management (CRM), or point-of-sale platforms to help streamline operations even further.
We recommend using Xero if you’re a small-to-medium-sized company that values affordability, collaboration, and user-friendly design. Because Xero doesn’t charge more as you add users to your plan, it offers a cost-effective way to provide employees access to real-time financials. Furthermore, you can scale it up as your company grows; Xero integrates with over 1,000 third-party apps for payroll, time-tracking, and more.
Keep in mind that support is only available via email or one-way call. If you’re a larger company with multiple bank accounts, go for a more robust accounting system like QuickBooks Enterprise. For heavily inventory-based businesses, we suggest an ERP like NetSuite ERP or Sage Intacct.
Xero offers plans starting at $13/month. All and all, it’s an excellent option for sole proprietors and growing companies requiring an inexpensive way to manage finances and basic inventory.
It’s a beautiful accounting software. They keep the language simple which is great for users who don’t know accounting terminology.
I think Xero has a lot of power and flexibility, which gives it a bigger learning curve to get used to the features available. I recommend finding a bookkeeper who is experienced who can show you the ropes.
If you’re a beginning, Xero has a whole set of videos available to help teach you the software. It’s very similar to QuickBooks Online. I recommend using this software probably as much as QBO, Wave, and Kashoo.
Despite some criticism I have about Xero, I feel they are a strong billing and invoicing software. The customization capabilities is probably the best out of all online accounting software. It’s best to judge accounting software based on what you need it to do, rather than what it can be capable of doing.
The support is heavily weighted to “email” and it can be hard to get people on the phone. However, I feel email does give me better answers.
Easy to use program.
It includes lots of options to customize the software.
I found some sections are complicated to get started.