If your small business is looking for a simple accounting software, then Xero could be the perfect match. First, we want to fully disclose that we are not affiliated with Xero, and we are not getting paid for this review. We just like the software, and it has worked well for our small business.
Review on Xero
Xero is an online accounting software platform that’s been giving market leader QuickBooks serious competition since about 2006. Xero is an elegant accounting solution that also has sophisticated features for the advanced users. The program was built from the ground up to be a web application, and it feels very modern and smooth.
With Xero, the program automatically synchronizes data with the bank, other accounting tools, the accountants, payment services, and loads of third-party apps. You can easily manage sales, purchases, bills, expenses, inventory, and payroll with just a few clicks.
Here are some of our favorite features in Xero:
Automated data entry. Xero can reduce manual data entry by pulling records of sales and expenses directly from their sources such as banks, point-of-sale systems, and other applications.
Synchronized bank connections. Business transactions are directly pulled from your accounts via a secured feed. This means that everything you spend on your bank account or credit cards will be sucked into Xero without any manual intervention.
Account reconciliation. The software does a good job automatically reconciling items. For example, if you have an incoming payment for $100 and an outstanding invoice for $100 – it will recognize that and ask if you want to match those items up.
Simple online billing. Xero can send invoices and offer customers various payment options including credit, debit, and PayPal among other options. You will need to have an account with the third-party payment providers in order for the integration to work in Xero.
Automated financial reporting. Cash flow statements, balance sheets, profit and loss statements, and other reports can all be generated in Xero with a few clicks. This makes it much easier for your accountants to do your business taxes at the end of the fiscal year – which will likely save you some money.
Integration with other apps. Xero integrates with hundreds of other business apps, and really saves you a lot of time. For example, we can upload our receipts in Hubdoc, which will scan and populate and expense statement. Hubdoc will then automatically link with Xero and feed the information into the accounting system.
Getting Started with Xero
If you’ve been using a lower tier or manual accounting solutions (like Google Sheets or MS Excel), then you are in for a treat. Xero is so much easier, and you can also easily import existing records, transactions, statement of accounts, and other data.
If you’re starting your small business accounting from the ground up with Xero, then be sure to take a look at all of the online tutorials as well as the demo company that is set up for you. If you’re working with an accountant, they can also hop into the system and get things set up. Some of these set up activities include connecting your bank accounts, creating a statement of accounts, getting your customer contacts set up, and creating supplier contacts. Xero is better than most of its competition when it comes to ease of use and getting started.
Final Thoughts on Xero
Xero is a great cloud-based software for small to medium sized businesses. It comes with robust accounting features, hundreds of third-party integrations, and simple reporting.
The main drawback we have encountered is the lack of quick customer support over the phone and live chat. This is a bit of a pain if you have an emergency, but the issues are usually solvable if you have an hour to look over help materials online or chat with your accountant.
If you’re still not sure whether this is the right software for you, then take advantage of their free trial to find out.