Xero Accounting Software Review

This is a Xero accounting software review.  Xero promotes itself as a beautiful, innovative, cloud-built software that is simple to use.  The system integrates small business owners and their accountants, so that each can view the company’s finances.  They have an open forum for users to share with each other and with Xero.  They provide unlimited support via phone calls, video tutorials, and an online help center.


Their system caters to all kinds of businesses, including retail, eCommerce, high-tech, non-profit, legal, hospitality, online sellers, and startups, among others.

In this Xero accounting software review, I'm going to give you an idea of the features the software has.  It seems to work best when you plug your outside data into the system.  What I mean is, you can have your financial transactions feed into


 from banks, credit cards, and PayPal accounts, automatically.  Doing bank reconciliations is simply a matter of clicking what matches.  You code the cash transactions, posting them automatically.  And, if necessary, your accountant can recode and update batches of transactions in seconds.


With Xero accounting software, invoicing your customers is easy.  Start with quotes, and turn them into invoices.  You can prepare PDF invoices, and email them to clients, shortening the time it takes a customer to get your invoice.  Then, they can pay online, significantly cutting down the time it takes for you to get paid.  Then it goes ones step further, and sends out automatic reminders on outstanding invoices.  You can see when the invoice was received and opened by your customers.  Xero has a feature called Avalara that calculates sales tax for you.  It can also file your sales tax returns for you.


Do you use purchase orders?  You can create and email purchase orders with Xero.  Then convert them to bills.  You can track inventory, control stock and prepare reports on your products or services in Xero.  Record your expenses, schedule bill payments, pay suppliers, and manage cash flow.  Xero has graphs that show you what bills are due, so you won’t forget.


Xero has a nice cloud storage system, too.  You can store contracts, purchase orders, vendor bills, etc. in a general library, or you can attach the document to a specific transaction.  Keep pictures of purchased assets or finished projects.  Keep all your business documents in one place so they can be easily found.


The Xero dashboard gives you an at-a-glance look at your finances.   It’s a great tool to keep track of your customer information, invoices, and bills.  Charts and graphs show your business’ performance, and you can customize what it shows you.


To review Xero accounting software, I've taken into account all the integrated features it has.

You can prepare payroll with Xero.  Track hours, approve time off, and pay employees.  There is even a mobile app – XeroMe – that lets employees submit timesheets and apply for time off.  However, right now Xero only allows up to 10 employees, and not all countries or states are available.  So if you want to do payroll thru your accounting software, you’ll have to check if your state or country is available.  You can integrate an outside payroll service with Xero, though.

This is done thru the Xero App Marketplace, where you can integrate with CRM solutions, inventory management, point-of-sale, payroll services, debt servicing, and ecommerce solutions to increase your productivity.  Some integrated solutions are Square, PayPal, TSheets, Shopify, ADP, Bill.com, Kabbage, Google Apps for Work, Google Docs, and that’s just a few of 500 integrated services that you can integrate with Xero accounting software.



is mobile.  Use the mobile app to keep track of your business on the go.

Now that you know it's features, let's review Xero accounting software's pricing.

Xero accounting software review of Pricing


So, how much does this cost you?  Xero accounting software starts at $9 per month for the starter package.  This is for very small businesses, as it only covers 5 invoices/month, and 20 bank transactions.  The standard package costs $30 per month, and it covers unlimited invoices, bills, and bank transactions.


Right now they’re having a 30% off sale for the first 6 months.  And they do have the 30 day free trial, so you can see if this will work for you before you buy.

Xero accounting software review comparison to QuickBooks Online

No Xero accounting software review could be complete without comparing it to QuickBooks Online.  The small business accounting software field has been primarily owned by Intuit, the makers of QuickBooks accounting software.  However, Xero is making a name for itself for ease of use and customer service.  QuickBooks can be difficult to maneuver around, and customer service is a bit slow to respond.

Both systems are cloud-based, and are mobile friendly. 

QuickBooks Online (QBO) allows up to 5 users (you can pay for more), Xero allows unlimited users.


Both programs allow your customers to pay you online.  Xero uses PayPal or Stripe, whereas QBO has you use their payment system, which has slightly higher usage fees.  So you pay about a half a percent more in fees on your customer payments with QBO than with Xero. 


Now, for the fees for the software itself, the costs are pretty comparable.  For a basic package, Xero costs $9/month (Starter), and QuickBooks costs $13 (Simple Start), but you get a lot more from the QBO Simple Start program than with the Xero Starter. 

When you move up a step, the Xero Standard plan costs $30/month.  QBO has two mid-level plans, Essentials costs $27 and Plus costs $40/month.  Now, if you’re going to include payroll, this is where you see a difference in price.  QBO Plus plan with payroll is about $100/month.  With Xero, payroll is included, but only for 5 employees with the Standard plan and 10 employees with the Premium plan, which costs $70.


So, if you have more than 10 employees, QBO is the best choice.  If you’re a solopreneur, or only have a few employees, you may want to try Xero.  Although, Xero only covers about half of the US as of right now (2016), so make sure your state is one they cover before making your decision.  Keep in mind, though, the do integrate with a couple payroll companies, like ADP.


There are a couple of features that Xero offers that QBO does not, and that is payment reminders for customer invoices, and expense reports, and the ability to handle multiple currencies (Premium version).  Also, for Inventory Accounting, Budgeting, Purchase Orders, Job Costing, Time Tracking and 1099 preparation, you need the Plus version of QBO Online.  With Xero, any version has those features.


The customer reviews of these two accounting software packages have a place in your decision of which software to use, as well.  Xero accounting software reviews seem to be about 70% positive.  The reviewers comment on how easy it is to use, and how it integrates with other resources beautifully. The complaints are fewer than with QBO, but they address support issues, and payroll problems.  Also, Xero seems to work best when you have you bank account sync with it.  If you want to manually enter bank transactions, this seems to be cumbersome.  The reviews of QBO seem to be about 70% negative.  They range from slow, extra steps and workarounds, support issues, trouble with sales orders and difficulty with cost of goods sold calculations, etc.  Some reviewers state the desktop version is better.

Xero accounting software review - the bottom line

This Xero accounting software review is meant to explore the software's good points and bad points, so you can make a better decision as to which accounting software is best for you.

Nothing is perfect, obviously, and one system may work better for you than the other.  These two accounting software packages seem to be running pretty close together right now.  I’d say if you’re a techie, and don’t mind getting your banking, accounting, and maybe payroll all synced in the cloud, Xero may be for you.  If you want more manual entry, or want to do your own payroll for 10 or more employees, QBO might be a better fit.  Or maybe QB desktop.


Both Xero and QuickBooks Online offer free 30 day trials, so you can check each one out and see which will work best for you and your small business.

For more free information about small business accounting, go from this Xero accounting software review page to my

home page.