Xero Accounting Review – 2017
Xero was created to simplify accounting for businesses of all sizes and needs. They offer online collaboration, real-time reports and work hard to limit how much manual input time you spend on your finances. While they do have excellent features, they can be pricey and even their lower level accounting program limits you on the number of transactions, bills and invoices you can send. That being said, they may be all your company needs to get on track financially.
Cloud-based accounting designed for companies of all sizes.
- Unlimited users
- 24/7 free support
- Free payroll (for some states)
- Free updates and no software to install
- Online file storage
- Limited invoices, bills and transactions per month (starter membership only)
- High monthly price for starter considering features
- Payroll only up to 10 employees
- High price for larger payroll needs
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Scoring and Rating
Accounting and Business Tasks: (Rating: 7/10)
Xero does offer a lot of basic accounting features, including invoicing, estimates, business budgeting (a feature not all accounting programs offer), automatic bank reconciliations, vendor tracking, purchase orders, bills and more.
You can sync your bank accounts and simplify how much you enter, but if you opt for the entry-level account, you are limited on what accounting features you can access. With the Starter you can only create and send five invoices per month, enter five bills to pay each month and reconcile 20 bank transactions while the other account options are unlimited. Considering other companies don’t limit you and the price you pay to use Xero, this could be a big negative to consider.
Invoicing: (Rating: 9/10)
Invoices are simplified with Xero, but still custom. You can add a logo, change colors and make sure invoices are representative of your company. They also offer the one-click payment option for customers to use PayPal or their credit card. You can also tell if a customer has viewed your invoice – so no more saying they never received it. Their templates ensure good-looking invoices every time and you can transfer any estimate into an invoice with ease.
Multiple currencies (highest plan only) and tax rates are also offered by Xero and you can setup recurring invoices. You can also create invoice reminders so that customers are gently notified they have a pending invoice still. Again, you are limited to creating and sending only five invoices with the Starter option. To send unlimited, you have to upgrade to more than three times the starter price, which is a little disappointing. If it weren’t for such extreme limitations, we would probably give Xero a perfect score.
Management: (Rating: 10/10)
Xero is one of the few that allow you to manage your vendors, purchase orders and even pay those company bills via their software. You get unlimited bills and bill pay, except with the Starter program, which limits you to only five bills per month.
You can track inventory with Xero. Their program tracks not only how much you have in stock, but the value of that inventory and can be customized to meet small and big businesses alike. They also have inventory add-ons you can purchase from third parties, such as Unleased, TradeGecko and simPRO for easier inventory tracking based on your industry. When you input your inventory, you can add it to your tracked inventory assets as well.
Two out of the three plans come with built-in payroll, but they don’t offer time tracking. Instead, the employees or company accounts person will have to manually enter hours. Time requests can be submitted through the system for employees though.
Xero can integrate into a POS using their third party apps and options. You may have to pay extra for some of these applications – depending on the one you choose and the current POS you are using.
Ease of Use: (Rating: 8/10)
The program is fairly simple to use, but some users have found it too basic and clunky even when trying to use all of the features. Luckily, Xero has plenty of tutorials and videos so that you can better use your software. When you’re on a page, you can click the Help question mark and you will be able to search for answers or even get help specifically with that page.
They also have a blog that will discuss upcoming feature changes and highlight features already in the system and you can contact support if you ever have a question. Compared to other accounting programs, Xero may be slightly more complicated. They do, however, limit how much you have to manually input so once you do get your account up and running and sync with your company credit and bank accounts, you will not have to worry about wasting time inputting transactions.
Access: (Rating: 10/10)
Xero is a cloud-based accounting program, so you can access it from anywhere and any type of device (including any platform you want). When it comes to mobile-specific, Xero is available on the Google Play and App Stores. You’re your mobile app you can manage your business, reconcile, send invoices, add receipts to expenses, create claims, etc. Because it is cloud-based, you can still access your account regardless if your computer is lost, stolen or crashes.
You can also add users to your Xero account and set strict permissions. You can pick the level of access they have, what they have access to and even if they can change permissions or take on managerial roles. This is what you would also use to give your accountant access to your info.
Taxes: (Rating: 9/10)
Employee W2s and 1099s can only be prepared and printed on all three plans, but you can only access payroll on the upper two plans (and it ranges from five to 10 employees only unless you upgrade even further). You can export a tax file directly to your tax software, calculate sales tax and quickly file your sales tax returns. You cannot, however, estimate quarterly tax payments or submit them and you cannot submit your actual taxes online. Payroll taxes can be paid with the upper two plans, including federal and state payroll taxes.
All three accounts come with unlimited access for as many accountants and bookkeepers as you need and you can also export your files for your accountant if need be.
Pricing: (Rating: 7/10)
Price-wise, Xero is much more expensive than other accounting programs. While they offer generous discounts, once the introductory offer is over, their regular price can be steep – and not necessarily worth the features. While they offer payroll on two of their accounts (Standard and Premium), they are limited to five and 10 employees – which may not suit most business needs.
The Starter plan is affordable, but once you consider the limitations, it may not be worth the price – especially since there are other programs for a similar price that do not limit you to a whopping 5 bills or 20 transactions per month.
Starter starts at $6.30 per month for six months, but after the introductory it goes to its regular retail of $9 per month. Standard’s introductory rate is $21 for six months and then $30 per month thereafter. Premium’s introductory rate is $49 per month for six months and then jumps to $70 per month.
For larger companies they offer their Premium 20 and Premium 100 plans. Premium 20’s introductory rate is $63 per month for six months and then $90 per month for up to 20 employees and payroll, while Premium 100 is $126 per month for the first six months and then $180 per month after that to include payroll and all of the standard accounting features for up to 100 employees.
You cannot collect payments via Xero, but you can integrate payment add-ons such as Square, PayPal and Stripe – but their fees will be in addition to your Xero account fees.
Customer Service: (Rating: 7/10)
Xero’s customer support is available through several outlets including their help center and community. You can also get advice from a local financial expert through the site. They offer videos and guides for new users online, but contacting actual support is not as easy. They offer 24/7 support, but only via email. There’s no quick access to a phone number (unless you want to buy something) and there is no live chat. Most of their Contact Us information guides you back to searching for the answer yourself online – considering how much you pay for Xero, you would think they would offer more customer-friendly services.
Xero is not rated with the BBB at this time.
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Regular Pricing(after intro): Starter $9/mo, Standard $30/mo, Premium $70/mo
Introductory Pricing: Starter 6.30/month for 6 mos, Standard $21/mo for 6 mos, Premium $49/mo for 6 months
Free Trial: 30 Days
Score Based out of Total of 10
# of Users Per Account
# of Clients/Customers
# of Invoices
Basic Accounting Features
Can Import Bank Transactions
Estimates or Quotes
Converts Estimates to Invoices
Managing Bills and Paying Bills
Credit Card/Paypal Processing: Added Fee
eCommerce or POS Compatable
# of Built in Reports: not specified
Provides Employee TimeSheets
Prints Payroll Checks or Process Electronically
Can e-file or Manually File Payroll Taxes
All (Cloud Based)
Mobile Expense Tracking
Receipt Capture via Mobile Phone
Mobile Time Tracking
Help and Support
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What Type of Business Could Use This Software?
Xero makes it clear that they are best suited for small businesses, but they can still accommodate companies with up to 100 employees. That being said, their high prices may make them unsuitable for companies just starting out and most freelancers or independent contractors won’t find the features they need to enjoy Xero’s services. We would recommend Xero for established small-to-medium-sized businesses (with employees) that are looking to simplify their finances and have payroll included in the cost of their accounting software.
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All plans come with a free 30-day trial and introductory rate for six months.
Starter: Limits you to five invoices per month, five bills/payments per month and only 20 bank transactions monthly. Includes unlimited user accounts, unlimited accountant access, reporting, W2s and 1099s, invoicing/estimates, and apps. No payroll is offered with this plan. Starts at $6.30 per month for six months and then $9 per month after introductory rate.
Standard: Unlimited users, invoicing, vendor bills, bank transactions and accountant access. Includes the features of Starter as well as payroll up to five employees. Starts at $21 per month for six months and then $30 per month after introductory rate.
Premium: Same features as Standard, but offers payroll services up to 10 employees. Starts at $49 per month for six months and then $70 per month after introductory rate.
Premium 20: Same features as Standard, but offers payroll services for up to 20 employees. Starts at $63 per month for six months and then $90 per month after introductory rate.
Premium 100: Same features as Standard plan, but offers payroll for up to 100 employees. Starts at $126 per month for six months and then $180 per month after introductory rate.
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What We Like About Xero
Payroll Included: Most business accounting programs make you pay for the basic accounting service and then payroll is an add-on that can cost anywhere from $20 to over $100 per month in addition to the program itself. Xero includes this as part of their same monthly price. The only issue is if a company doesn’t have employees – then they are stuck paying for a service they don’t need. That being said, Xero also allows those with payroll to pay state and federal payroll taxes straight from the program – added convenience for sure. You can also use direct deposit or print physical payroll checks – but this is only included on the higher plans, not the Starter.
Free Trial: It is nice to be able to try out an accounting software and see if you like it. While with most it isn’t a big deal because they are so cheap, with Xero you would definitely want to take advantage because of their higher price. The trial period lasts 30 days.
Contract Storage and File Storage: You can also store your contracts and files online in your Xero account. This is helpful especially if you have purchase orders or specific invoices that correspond to a particular contract.
Third Party App Integration: When most accounting programs are lacking features, you’re stuck with what you get. Xero has made it easy to fill the gaps of their program by offering third party app integration. From integrating with PayPal to your credit card company and more, you can truly customize Xero to meet your needs. That being said, you will have the fees and transaction costs of that particular app in addition to Xero – so these aren’t free. But, it is still a great feature to have because now you won’t have to sit and deal with a program that doesn’t meet your exact company specifications.
Unlimited Users and Accountants: Not all accounting programs, including other cloud-based programs, allow you to add as many user accounts or accountants/bookkeepers as you want to your plan. Xero does. This is a nice feature especially if you want multiple employees to enter their own time, expenses, etc.
Budgeting: This is a feature more online accounting software programs should have. Xero does offer a budget manager, which lets you set monthly budget amounts and monitor your progress.
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What We Don’t Like About Xero
Limits on Starter Plan: We appreciate that Xero makes an effort to have a lower priced option, but the limitations on this plan almost make it useless. No payroll and then you’re limited not only on how many invoices you can send, but the number of bank transactions and even vendors. Most people will have more than 20 transactions and being limited to five invoices per month makes this plan extremely unreasonable. There are plenty of other accounting programs out there that charge a similar fee and have unlimited invoices.
No Estimated Tax Payments: More accounting programs need to consider independent contractors and freelancers. There are very few that do – and should. Xero cannot calculate quarterly estimated tax payments or even offer the option to freelancers.
Multiple Currencies Only on Higher Plans: If you have clients from around the world, you are limited on currencies unless you start at the third tier plan or higher. This is a little disappointing, since other programs will offer multiple currencies for mid-level and low-level plans.
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Xero is a feature-rich cloud-based accounting program and one of the few to offer integrated payroll. Their prices are higher than other programs, but they try to make up for that by offering third party app integrations and other features that you are often charged extra for with other companies.
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