Xero Review: Pricing & Features in 2022

Eric is a staff writer at Fit Small Business focusing on accountancy capacity. He spends most of his clock time research and studying to give the best answer to everyone. Tim is a Certified QuickBooks Time ( once TSheets ) Pro, QuickBooks ProAdvisor, and CPA with 25 years of have. He brings his expertness to Fit Small Business ’ s account subject .Xero logo
Xero is an on-line account software program that offers accounting services for freelance individuals, small businesses, and growing companies. This app can help you track and pay bills, title expenses, cope inventory, store files, cope invoices, and much more. It can besides integrate with Gusto for your payroll needs. You can try Xero ’ sulfur features free for 30 days and then subscribe to any of Xero ’ s three plans. Pricing starts at $ 11 per month .

What We Recommend Xero For

Xero is a solid choice for most little businesses looking for a less expensive choice than QuickBooks. Its inventory features are excellent for product-based businesses that need small- to medium-volume inventory tracking. Service-based businesses will benefit from its outstanding project account.

Xero Accounting Software Is Especially Good For

  • An alternative to QuickBooks: Xero is our top pick for the best QuickBooks alternatives. It has features very similar to QuickBooks but is considerably less expensive and includes unlimited users.
  • E-commerce: The inventory tracking feature of Xero is ideal for e-commerce companies because it calculates your cost of goods sold (COGS) automatically and maintains a list of customers. You can also monitor customer payments and orders with Xero, making it suitable for online transactions. We chose it as one of our top-recommended e-commerce accounting software programs.
  • Fixed asset management: Xero has a fixed asset manager that keeps fixed asset records and calculates depreciation expenses automatically. It’s the only general bookkeeping program we’ve reviewed that has a fixed asset management feature. This unique feature, along with its overall functionality, earned Xero an honorable mention on our list of the leading small business accounting software.

Xero Accounting Software Is Not Good For

  • Multiple businesses: Xero has a one-account, one-organization subscription rule. This means that every organization you handle will be separately billed, and you cannot add organizations to existing Xero subscriptions. Xero isn’t a good match for you if you’re a bookkeeper who manages books of several clients or a business owner with several businesses. Instead, you can check our best multicompany accounting software.
  • Nonprofit organizations: The overall framework of Xero’s accounting process is tailor-fitted to for-profit organizations. Although Xero gives some reporting flexibility through custom tags, it would take considerable customization to get the reports a nonprofit organization requires. For nonprofits, we recommend QuickBooks Premier Plus 2022 Nonprofit Edition because it has features like end-of-year donation statements, statement of functional expenses, and donor contribution reports.
  • Customer service: You can only contact Xero through email. If you need immediate help, you can use a chat-bot or self-help information. We don’t recommend Xero if you’re looking for superb customer service. Instead, consider Zoho Books because it’s by far the best accounting software in our list that has excellent customer support.

Xero Overview

PROS victimize
Excellent inventory accounting Lowest plan is limited to 20 invoices and five bills
Ideal for project accounting One subscription is good for one organization only (no option to add multiple organizations)
Easy-to-understand bank reconciliation No annual billing option for plans
Robust integration choices with third-party apps through the Xero App Store Limited features for nonprofit organizations

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Xero Case Study

Graphic example of bar chart for Xero vs competitors of FSB Case Study.
In our Fit Small Business case study, we compared respective accounting software using criteria that our experts have developed. Xero performed exceptionally well in most key areas, but it performed good in the area of fixed assets and visualize account. Xero fell short circuit in customer documentation and the mobile app. Zoho Books is our recommendation if you ’ ra particular in these two areas .

Xero Pricing

Xero has three price plans. Before subscribing, you can entree all of Xero ’ sulfur features for 30 days for rid and decide which plan best suits your needs .

  • Early: $12 per month up to 20 invoices and five bills
  • Growing: $34 per month for unlimited invoices and bills
  • Established: $65 per month for unlimited invoices and bills plus project accounting

Xero Accounting Features

In our expert evaluation, we found that Xero has many great, utilitarian features that can work with unlike businesses. Overall, Xero did an excellent job in most of the areas we examined, even though it fell short in customer service and the mobile app. Let ’ s search at our account expert ’ mho walkthrough, analysis, and evaluation of Xero ’ s account features .

General

9.8 / 10
POINTS

We like how easy it’s to set up your business on Xero. The chart of accounts has default accounts set up, but you can modify existing accounts or add new ones as well. The most accessible general feature of Xero is its user-friendly conversion balances window that allows you to input your beginning balances while clearly distinguishing if you’re entering a debit or credit. You can also invite an additional user and set limits to their access.

Xero General Features Video

We like how easy it ’ s to set up your commercial enterprise on Xero. The chart of accounts has default accounts set up, but you can modify existing accounts or add new ones vitamin a well. The most accessible general feature of Xero is its user-friendly conversion balances window that allows you to input your beginning balances while intelligibly distinguishing if you ’ re entering a debit or credit. You can besides invite an extra user and set limits to their access .

Accounts Payable

9.65 / 10
POINTS

Xero’s accounts payable (A/P) management is another of their strongest features in our evaluation. From vendor creation to recording of payments, Xero can help in keeping your billing system organized. Xero also has an outstanding PO system to convert POs into bills, track unpaid bills, record e-payments, and apply vendor credits:
Xero bills window wherein you can see pertinent billing details like vendor, invoice date, due date, amount paid or due, and the status of the bill. Xero ’ mho accounts account payable ( A/P ) management is another of their strongest features in our evaluation. From seller universe to record of payments, Xero can help in keeping your charge system organized. Xero besides has an outstanding PO system to convert POs into bills, track amateur bills, record e-payments, and apply seller credits : The bills window of Xero is presented in a tabular format wherein you can see pertinent bill details like seller, bill date, due date, sum paid or due, and the status of the bill. Navigation is very user-friendly : everything is laid out neatly, and it ’ s not complicated, even for first-time users of Xero .
however, Xero can not record recurring expenses mechanically. Xero can create recurring bills, but you ’ ll need to record the payment of that bill manually. It would be dainty to have an option for a recurring expense to be deducted from your checking report automatically .
We besides found a minor trouble in purchase orders ( POs ) and inventory. In Xero ’ mho system, stock on a PO international relations and security network ’ thyroxine reduced automatically when only a helping of a PO is received. rather, you ’ ll indigence to edit the original PO and adjust the quantity not so far received. otherwise, the act of units available and on a PO will be overstated. Though it can work this way, we still don ’ metric ton see it as a capital solution since there ’ s no newspaper lead or change log when editing POs .
aside from those two minor issues, the AP management arrangement of Xero is outstanding, easy to use, and comprehensive. overall, we gave Xero ’ s AP a high score since it performs well in most of the A/P aspects we want to see in accounting software .

Accounts Receivable

8.70 / 10
POINTS

In the accounts receivable (A/R) management portion, we took into consideration major aspects like invoice creation, inventory adjustments, and customer payments. For invoice creation, we found that Xero doesn’t give users the ability to customize the invoice in terms of invoice color, layout, and font to the extent of other accounting software. Although Xero lets you customize invoice elements, such as invoice line items, we wanted to see some personalization in creating invoices.
In the accounts receivable ( A/R ) management share, we took into consideration major aspects like bill creation, inventory adjustments, and customer payments. For bill initiation, we found that Xero doesn ’ t give users the ability to customize the bill in terms of invoice color, layout, and baptismal font to the extent of other accounting software. Although Xero lets you customize invoice elements, such as bill cable items, we wanted to see some personalization in creating invoices. however, we ’ ra satisfied with how Xero takes into account COGS and inventory adjustments when creating invoices. Xero can accommodate abruptly payments, which is a big have, and it can issue sales receipts for immediate payments :
Xero invoice window, which you can use search invoices using multiple fields and filter them appropriately. The invoices window of Xero is like to the bill window. We like its advance search feature, which you can use to search invoices using multiple fields and filter them appropriately. In compendious, Xero ’ s AR management is competitive when compared to applications like QuickBooks and Freshbooks. Its ease-of-use score is besides high, making it a capital software for A/R .

Banking & Cash Management

9.10 / 10
POINTS

Xero’s banking and cash management features score high in our evaluation because they include all the cash management features we like to see in accounting software. We like the side-by-side layout when reconciling transactions because it’s easy to match transactions and spot bank statements items that haven’t yet been recorded.
Xero ’ randomness bank and cash management features score high in our evaluation because they include all the cash management features we like to see in accounting software. We like the side-by-side layout when reconciling transactions because it ’ sulfur easy to match transactions and spot bank statements items that haven ’ deoxythymidine monophosphate yet been recorded. Users can besides upload files like bank statements to register the transactions in the books automatically. The alone reverse we see here is that users can ’ deoxythymidine monophosphate enroll ending balances of checking accounts. Users have to upload the bank statement first before reconciling .
however, we found that it ’ s impossible to combine multiple checks along with cash into a individual sediment entrance. Xero does provide an account to hold undeposited checks, but the feature doesn ’ thyroxine track when checks are removed and deposited, nor does it allow cash to be added to the down payment. Though such a sport doesn ’ t impact the overall performance of Xero that much, not being able to group payments into bank deposits makes it unmanageable to reconcile your trust account .

Fixed Assets

8.50 / 10
POINTS

A unique feature of Xero is that it has a dedicated fixed assets manager page. Every aspect of fixed asset accounting and depreciation is straightforward with Xero’s fixed asset manager. You can record fixed assets, set up depreciation entries, and account for gain or loss on fixed asset disposal.
A singular sport of Xero is that it has a dedicated fixed assets director page. Every expression of fixed asset accounting and disparagement is straightforward with Xero ’ s fixed asset coach. You can record fixed assets, set up depreciation entries, and account for profit or passing on fixed asset administration. In Xero, you can calculate book depreciation but not tax disparagement, which isn ’ t a major problem since your tax preparer, or tax software, will make that calculation for you .

Project Accounting

10 / 10
POINTS

Xero got a perfect score for project accounting. In our rubric, we emphasized higher weights on project estimate assignment, labor cost assignment, and the recording of inventory used in projects. We saw all of these features in Xero, and we’re satisfied with how it can help companies stay on top of projects in terms of income, expenses, and profitability.

Xero got a perfect score for undertaking accounting. In our title, we emphasized higher weights on visualize estimate assignment, labor price grant, and the record of inventory used in projects. We saw all of these features in Xero, and we ’ rhenium satisfied with how it can help companies stay on top of projects in terms of income, expenses, and profitableness .

Inventory

9.75 / 10
POINTS

In this area, we emphasized certain features like creating inventory items, viewing inventory levels, adding inventory to invoices, and allocating COGS. Xero has all of these features alongside minor features that can help in inventory management, like viewing inventory cost information and POs
In this area, we emphasized certain features like creating inventory items, viewing inventory levels, adding inventory to invoices, and allocating COGS. Xero has all of these features alongside minor features that can help in inventory management, like viewing inventory cost information and POs To reiterate our point in Chapter 2 of our encase sketch, the only defect we see is the trouble with viewing inventory in the PO. Overall, we ’ re satisfied with how Xero ’ mho inventory features performed based on our title. We evaluated inventory as character of our A/P and A/R test, so there ’ s no separate video recording .

Reporting

9.8 / 10
POINTS

In evaluating the reporting features of Xero, we’ve set 16 necessary reports that every accounting software should have. Xero has 14 out of the 16 reports we want to see, including basic financial statements, specialized reports, and other accounting reports, and is missing two special reports: income/loss by customer and unbilled time. But even though it doesn’t have these reports, it doesn’t affect the overall experience.

Reports Included Missing Reports
  • Balance Sheet (comparative)
  • Profit and Loss Statement (comparative)
  • Statement of Cash Flows
  • Accounts Receivable Aging
  • Accounts Payable Aging
  • Income/Loss by Month
  • Income/Loss by Class
  • Income/Loss by Location
  • Income/Loss by Project
  • Unbilled Charges
  • Transaction List by Customer
  • Expenses by Vendor
  • General Ledger
  • Trial Balance
  • Income/Loss by Customer
  • Unbilled Time

In evaluating the report features of Xero, we ’ ve set 16 necessity reports that every accountancy software should have. Xero has 14 out of the 16 reports we want to see, including basic fiscal statements, specify reports, and other account reports, and is missing two limited reports : income/loss by customer and unbilled time. But even though it doesn ’ t have these reports, it doesn ’ deoxythymidine monophosphate affect the overall experience .

Customer Service

3 / 10
POINTS

Xero fell short in customer service. In general, accounting software companies should have open lines of communication with customers. Unfortunately, Xero only has a chatbot, customer service email, and self-help information.
Xero fell short in customer serve. In general, accounting software companies should have open lines of communication with customers. unfortunately, Xero lone has a chatbot, customer service e-mail, and self-help information .

Mobile App

5.25 / 10
POINTS

We want to see comprehensive features in a mobile app, like sending invoices, entering bills, receiving payments, and entering vendor payments. Xero’s mobile app is basic. It has basic mobile app features like receipt scanning, sending invoices, and expense categorization. However, users of the Xero mobile app can’t receive payments from customers, record time worked, assign billable time, and generate reports.

Assisted Bookkeeping Options

We want to see comprehensive features in a fluid app, like sending invoices, entering bills, receiving payments, and entering seller payments. Xero ’ s mobile app is basic. It has basic fluid app features like receipt read, sending invoices, and expense classification. however, users of the Xero mobile app can ’ thymine welcome payments from customers, record time worked, assign billable time, and generate reports. You can access Xero-certified independent accountants and bookkeepers or account firms in Xero ’ second Advisor Directory. aside from Xero advisors, Bookkeeper360 besides offers assisted bookkeeping services for Xero users. Read our Bookkeeper360 review to know how you can connect it to Xero.

Integrations

Xero offers a huge library of apps that can integrate with account software. There are more than a hundred apps available in the Xero App Store. From accountant tools to CRM, it ’ sulfur easy to integrate Xero with your existing software services .

Xero Alternatives

Alternative Software Comparisons

now that you have a detailed understand of Xero, we ’ d like to further aid you in choosing the best accounting software for your little business. We ’ ve compiled the follow articles that compare Xero with other accounting software to help you gauge its capabilities and to provide you with software alternatives that might be the best fit for your needs rather of Xero .

  • Read Xero vs QuickBooks Online if you’re looking for a Xero alternative.
  • Read Xero vs Zoho Books for comparable inventory and project accounting features but with Zoho Books having better customer support.
  • Read Xero vs Wave if you’re looking for a free accounting software alternative.
  • Read Xero vs FreshBooks for comparable project accounting features but with FreshBooks having no inventory management features.

Bottom Line

Xero is a capital alternate to QuickBooks Online for budget-conscious modest businesses. With Xero ’ s relatively low-cost price points, you get features that you ’ ll only see in higher-priced plans for early accounting software. however, we besides found that Xero isn ’ triiodothyronine desirable for nonprofit organization entities or specific businesses that need multicompany account features. overall, it ’ randomness capital software for daily accounting, inventory keeping, and project management. We recommend it for project-based and product-based companies because of its flexible features .

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Category : Finance