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Review of Xero accounting software

Even the most savvy business owners aren’t automatically amazing at balancing the books. Small businesses especially can be held back from their best work when administration takes up more time than it should. Xero is designed to be a sleek tool for managing your finances with ease, but what exactly could you get for your money? Canstar Blue takes a look.

When you’ve got a small team and have to be particularly strategic about where you invest your resources, hiring an accountant can be cost prohibitive. At the same time, it can be really tough and distracting to try to DIY it when you have basically zero accounting experience. Xero is designed for people like you. The New Zealand-grown accounting software company quickly took off after starting in 2006, growing into a global challenger and named by Forbes as the World’s Most Innovative Growth Company in 2014 and 2015. Today, Xero has over one million subscribers across the globe.

What does Xero offer that has brought it such success? Read on to find out what Xero can bring to your business’s management.

Xero accounting software

Xero is cloud based software – that means it’s not limited to computers with the software installed. You can log in anywhere you want, in-browser or using a mobile app. This can be much more convenient for businesses that don’t follow the traditional mould of fixed office locations with a company server and fixed company computer set-ups.

Xero prides itself on clean, visually engaging design. Its dashboard interface is designed to make it easy to check in on what’s been going on in your business with at-a-glance information presentation.

What features does Xero offer?

features offered by xero accounting software

All Xero subscription plans include the following features:

  • Add anyone (such as team members and accountants) to your platform, choosing what each individual has access to
  • iPhone and Android apps, for easy access on the go
  • Connect to your bank accounts, so that you can streamline payments as well as see your latest transactions from inside the software
  • Create financial performance reports and budgets at any time
  • Integration with 500+ other business apps, for functions such as inventory and time tracking
  • 24/7 Xero support, with regular software updates and upgrades every 3-6 weeks
  • SSL encryption, to keep your business information safe

What plans does Xero offer?

xero accounting software bills batch

As with most subscription-based software packages, Xero has tiered plans with each step up in price accruing access to more features (or more access to certain features), in addition to the base features available to all subscribers.

Starter ($25/month)

The most basic plan seems to be best suited for solo operators – such as creatives and small retailers. This will work for hobby or small business where there aren’t a lot of transactions, or businesses that take on fewer but larger sales or projects. It could also be a money-saving stepping stone for newly established businesses – you can always upgrade your plan later, so why pay extra for capacity you don’t yet need?

Monthly service limits are:

  • Generate 5 invoices & quotes
  • Enter 5 bills
  • Reconcile 20 bank transactions
  • Payroll for 1 person

Standard ($50/month)

The main limitations are that you still can’t access much in the way of payroll, nor can you operate in more than one currency. If neither of those functions are concerns, the Standard plan should cover the majority of any small business’s accounting needs.

Monthly service limits are:

  • Generate unlimited invoices & quotes
  • Enter unlimited bills
  • Reconcile unlimited bank transactions
  • Payroll for 1 person

Premium 5 ($60/month)

For the fullest access to everything Xero has to offer, the Premium 5 doesn’t cost much more than the Standard package. That being said, this still only provides payroll for up to five employees. It costs extra to add more capacity to the payroll function.

Monthly service limits are:

  • Generate unlimited invoices & quotes
  • Enter unlimited bills
  • Reconcile unlimited bank transactions
  • Payroll for up to 5 people (add more people for an extra fee per month to, depending on how many people)
  • Multi-currency functionality (for invoicing, bank reconciliation and payroll)
  • Auto superannuation management through Xero payroll

Should I use Xero accounting software?

Xero is claimed to work well for all different kinds of businesses, from small startups to construction to non-profit. It’s focused on keeping things streamlined and user-friendly, for small businesses that lack the time and expertise to deal with complicated accounting software – it balances customisability with ease of use, taking a lot of the work out of setting up an accounting system without being rigid.

Being cloud-based and offering unlimited access members makes it easy to collaborate with your team across various tasks. Xero prioritises a streamlined interface, as evidenced by its own motto “beautiful accounting software”.  One of the biggest stand-out features of Xero is that it allows unlimited users, with detailed user access control.

However, potential customers should look closely into its payroll functionality – you’ll need to purchase the Premium tier subscription if you want to use the software to manage your payroll for more than one employee. This can quickly raise the cost if you’ve got more than a handful of employees.

No accounting software does everything perfectly, so explore your options with a clear idea of what your business needs to find the right accounting software to minimise your financial woes.

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