What is Xero Accounting Software?

Read our 2023 Xero review to find out if it’s the right solution for your business. Wave is a solid choice for small businesses looking for free accounting software. Our partners cannot pay us to guarantee favorable reviews of their products or services.

• With the assistance of a payment processor such as Paypal, Stripe or ApplePay, your clients can pay directly, on theinvoice they receive.
• If you take advantage of its features, costly late fees will be a thing of the past, and you’ll be able to make sure you don’t come up short when it comes time to pay.
• The internet is changing how we live our lives including how we run our business.
• Xero gives access to custom, ready-to-use, exportable financial reports when you need them, as well as the educational tools you need to create the reports you want.
• If a customer is not already in Xero, they can be quickly added by clicking on the New option in the customer field.
• You can also add an additional bank account or transfer money between accounts from this screen.

We also liked how easily you can switch between checking and savings accounts when reconciling transactions. We also liked the “top customers” graph available from the accounting drop-down menu at the top of the Xero dashboard. When you open this graph, you’ll see one bar per customer, with each bar indicating the revenue that the customer brings you. This way, you can clearly compare customers and direct your efforts accordingly. This was the most direct revenue-by-customer reporting we encountered as we reviewed accounting software platforms.

About QuickBooks Online

Another feature, called Smart Lists, creates customer lists using a default search or your own search, so you can create a list of, say, all customers who are more than 30 days past due paying an invoice. And Tracking Categories in Xero Established are similar to the Class feature in QuickBooks Online Plus in that both let you assign user-defined classifications to your accounting transactions. https://www.bookstime.com/ Once you’ve saved a contact record, its own home page displays related activity front and center, like bills and invoices awaiting payment from this contact. The primary contact information and financial details appear to the right You can also create new transactions from this page. Xero has a semi-steep learning curve because it is capable of handling complex business accounting.

• After a 30-day trial period, Xero will bill a monthly charge of $13 per month for the Early plan, $37 per month for the Growing plan and $70 per month for the Established plan.
• Here are a few pros and cons of these alternatives, for you to consider.
• Small business owners, bookkeepers, and accountants use Xero Software.
• Bookkeeper and accountant tools include Xero HQ to centralize practice and client data, dashboards, and customizable reporting with report templates.
• Xero is a great option for large teams and small- to medium-sized businesses that need high-level accounting systems.
• QuickBooks is Intuit’s general accounting software, while QuickBooks Online (QBO) is specifically the cloud-based service.
• Here’s what you need to know about foreign currency accounts with BOQ.
• These subscriptions involve a three-tier pricing plan, depending on the size of your business and the extent of the services you require.

There is also a Xero Accounting app for Android (Android 5.0+) and Apple products (iOS 12.0+) and separate mobile apps for Xero Expenses and Xero Projects. While the price may rule out the software for small businesses, Xero still has a lot to what is xero offer for medium and large businesses or those in need of multiple users. It is not necessary to have an accountant or bookkeeper to use Xero, but the company does encourage small business owners to use a professional along with the software.

How Xero Compares

For example, you can give all employees the ability to send quotes and invoices, allow some to enter expenses and limit who can see the company’s complete financial picture. To keep things organized, Xero logs every action users make and compiles the history of every transaction. The company is building more visuals into them, and they’re becoming easier to understand. Several reports offer filters that let you isolate the exact groupings of data that you want. There have been enhancements to many reports, and one exceptionally notable new one, the Blank Report, which is completely customizable using the Xero Established layout editor. This kind of flexibility may be daunting to new users, but the site offers good learning and helpful content.

You can recode contacts, accounts or tax rates in one fell swoop, improving the accuracy of your reconciliation. Freelancers and sole proprietors can start out with one Xero’s less expensive plans and scale up as their business grows. More importantly, Xero integrates with a ton of other applications, so if the feature or function you need isn’t directly available in Xero, it’s likely available in one of the apps that Xero integrates with. So why not take a few minutes to download Xero’s 30-day demo and find out if it’s right for you. During setup, you also have the option to accept Xero’s chart of accounts or build your own.

Xero Accounting

Xero tries to throw you as many bones as possible by adding a video or help article to the top of every page you open. If you need some extra assistance in finding features or understanding the software, Xero also offers a help center. We also have a comprehensive and free How To Set Up Your Xero Account guide that teaches you how to use and optimize your Xero account. More than 1,000 third-party apps integrate with Xero’s accounting software.

While there was initial resistance to this idea, Xero quickly grew to own a significant share of the local market. Xero has a reputation for some of the strongest cloud security out there. Security measures include data encryption, two-step authentication, and 24/7 monitoring at multiple locations.

How Does Project Tracking Work?

Xero developed two new tools in response to the financial uncertainty created by the COVID-19 pandemic. It projects future bank balances a week or 30 days out based on bills and invoices entered into the app. The other is Xero Analytics Plus, the add-on mentioned previously. It offers even more projections, including those based on cash predictions and scenario planning.

• The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
• The initial setup for Xero accounting software isn’t difficult but requires a fair amount of information.
• These tools cost a fraction of the price, compared to traditional enterprise accounting systems.
• This can be helpful if your company is growing fast, or you simply want the reassurance that there’s no limit to how many people can be part of the team.
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For self-guided education and troubleshooting, Xero offers support articles in Xero Central. If you have additional questions, click the “Contact Xero support” button at the bottom of any support article, and Xero will contact you by email. Whether you’re sending payments to suppliers or collecting payments from clients, all it takes is one click of the Pay Now button on an invoice. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. If you do get lost, just click on the question mark in the upper right corner, which gives you plenty of support options, including quick access to Xero Central support.

Bookkeepers and accountants use Xero software in their practice and offer simple Xero Cashbook or Xero Ledger to their clients through a Xero partner plan. Bookkeeper and accountant tools include Xero HQ to centralize practice and client data, dashboards, and customizable reporting with report templates. Bookkeepers and accounting firms also receive a free subscription to the Xero premium plan.