Xero is a cloud-based accounting software that provides features such as invoicing, expense tracking, bookkeeping, and tax preparation. It is well-regarded for its user-friendly interface, robust features, and integrations with other financial tools. Many users appreciate the software’s mobile app, which allows them to manage their finances. Additionally, Xero’s automatic bank feeds, and real-time updates make it easier for users to keep track of their financials.
How does Xero work?
Xero provides a cloud-based platform for small businesses and freelancers to manage their finances. The software includes features such as invoicing, expense tracking, bookkeeping, and tax preparation. With Xero, users can automatically connect their bank accounts and credit cards to import and categorize transactions in real-time. The software allows users to create and send invoices, track expenses, and generate financial reports. Xero’s user-friendly interface and mobile app make it easy for users to manage their finances anywhere, anytime. Additionally, Xero integrates with other financial tools such as payment gateways, payroll systems, and tax software, making it a complete solution for managing financials.
How Much Does Xero Cost?
The cost of Xero varies depending on the plan you choose. Offers several pricing plans, including:
Early: $13 per month, designed for new businesses or sole traders with basic accounting needs.
Growing: $37 per month, designed for small businesses with more complex accounting needs.
Established: $70 per month, designed for growing businesses with multiple users and advanced financial management requirements.
Advisor: Custom pricing designed for accountants and bookkeepers who manage multiple client accounts.
All plans include unlimited invoices and quotes, expense claims, and bank transactions. The number of users and additional features such as multi-currency support, project tracking, and inventory management vary between plans.
It’s worth noting that the cost of Xero can also increase with the addition of third-party apps and integrations, so be sure to factor those into your budget as well.
Getting Started With Xero
Getting started with Xero is relatively simple and straightforward. Here are the steps to get started:
1 Sign up for an account: Go to the Xero website and sign up for a free trial or choose a paid plan that best fits your needs.
2 Connect your bank accounts: Connect your bank accounts and credit cards to Xero to import transactions automatically.
3 Set up your chart of accounts: Customize your chart of accounts to reflect your business and how you want to track your finances.
4 Enter your contacts: Add your customers, suppliers, and other contacts to keep track of all your business relationships in one place.
5 Invoicing and expenses: Create invoices and enter expenses to track your financials in Xero.
7 Generate financial reports: Use Xero’s financial reports to get a clear picture of your financial health, including profit and loss, balance sheet, and cash flow.
8 Explore integrations: Xero integrates with many other financial tools, such as payment gateways and payroll systems, to provide a complete solution for managing financials.
Once you complete these basic steps, you can use Xero to manage your financials daily. A User-friendly interface and helpful resources make it easy to learn and use, and the support team can assist with any questions.
Xero’s Dashboard
Xero’s dashboard is the central hub for managing your financials in Xero. It provides an overview of your business’s financials in real time and allows you to quickly access important information and features. The Xero dashboard includes the following:
Bank balances
In Xero, the bank balances widget on the dashboard displays the current balances of all the bank accounts you have connected to Xero. This information is updated in real-time, so you always have an up-to-date view of your cash flow.
The bank balances widget shows each bank account balance separately so that you can see the balance of each account, including business checking accounts, savings accounts, and credit card accounts. You can also view recent transactions for each account, including deposits, payments, and transfers, to quickly understand your cash flow.
In Xero, you can also reconcile your bank statements with your transactions to ensure that your bank balances are accurate and up-to-date. This helps you avoid errors and miscommunications and gives you a clear picture of your financials.
Overall, the bank balances widget in Xero is an important tool for managing your finances and tracking your cash flow in real time.
Invoices
In Xero, invoices are a key part of managing your financials. The invoices widget on the Xero dashboard provides an overview of your invoices, including:
- Status: You can see the status of each invoice, such as draft, sent, paid, and overdue.
- Due dates: You can see the due dates for each invoice, so you can follow up with customers as needed.
- Totals: You can see the total amount of money owed to you, so you can track your cash flow and keep an eye on your accounts receivable.
You can create invoices in Xero and send them directly from the platform to customers. And allows you to customize invoices with your own branding, and you can set up recurring invoices for regular customers. You can also accept payments directly through Xero, which saves time and streamlines the payment process.
In Xero, you can track the payment status of each invoice and see which invoices have been paid and which are still outstanding. You can also generate reports on your invoicing, such as aged receivables and sales by customer, to help you understand your invoicing performance and improve your cash flow.
Overall, the invoices widget in Xero is an essential tool for managing your accounts receivable and ensuring that you get paid on time.
Expenses
In Xero, the expenses widget on the dashboard provides an overview of your expenses, including:
- Reimbursable expenses: A summary of expenses that need to be reimbursed, such as expenses incurred by employees while on business trips.
- Approved expenses: A summary of expenses that have been approved and are ready to be paid.
You can easily track expenses in Xero by using the platform’s mobile app to snap a photo of receipts and upload them directly to Xero. This eliminates the need for manual data entry and helps you stay organized. You can also categorize expenses and assign them to specific projects, so you can track expenses by project and understand the costs associated with each project.
In Xero, you can also set up expense claims for employees so that they can submit expenses for reimbursement. You can approve or reject claims as needed and view the status of claims to see which ones have been approved, rejected, or are still pending.
Overall, the expenses widget in Xero is an important tool for managing your expenses and controlling your costs. By tracking expenses in Xero, you can ensure that you have accurate information on your spending and make informed decisions about your business finances.
Reports
In Xero, the reports widget provides access to a wide range of financial reports to help you understand your business’s financial health. Some of the most popular reports available in Xero include:
- Profit and Loss (P&L): A summary of your income and expenses, including your gross profit, operating expenses, and net profit. The P&L report helps you understand your business’s financial performance and make informed financial decisions.
- Balance Sheet: A snapshot of your business’s financial position, including assets, liabilities, and equity. The balance sheet helps you understand your business’s financial stability and liquidity.
- Cash Flow: A report showing your business’s cash inflow and outflow. The cash flow report helps you understand your business’s cash position and make informed financial decisions.
- Tax Reports: A range of reports to help you understand your business’s tax obligations, including VAT, GST, and other taxes.
- Sales Reports: Reports on your sales performance, including sales by product, sales by customer, and sales by location. These reports help you understand your sales performance and make informed decisions about your business strategy.
In Xero, you can customize reports to meet your specific needs and generate reports for specific periods, such as monthly, quarterly, or annually. For sharing with stakeholders, you can also export reports to other formats, such as Excel or PDF.
Overall, the reports widget in Xero is essential for understanding your business’s financial performance and making informed decisions about your finances. Regularly reviewing your reports can ensure that your business is on track and take action if necessary.
Contacts
In Xero, contacts are the people and organizations you work with, such as customers, suppliers, and partners. The contacts widget on the Xero dashboard provides an overview of your contacts, including:
- Recent activity: You can see the most recent activity for each contact, such as invoices and payments.
- Outstanding balances: You can see the outstanding balances for each contact, so you can follow up with customers as needed.
- Contact information: You can access important information about each contact, such as addresses, phone numbers, and emails.
In Xero, you can easily manage your contacts and keep your information up to date. You can add new contacts, edit existing contacts, and categorize contacts by type (e.g., customer, supplier, etc.). You can also attach files, such as contracts and agreements, to each contact for easy reference.
In Xero, you can also use contacts to automate certain tasks, such as sending invoices and receipts to customers automatically. You can also set up payment reminders for customers with overdue invoices, so you can follow up with them and keep your accounts receivable up to date.
Overall, the contacts widget in Xero is essential for managing your business relationships and ensuring that you have accurate information about the people and organizations you work with. By regularly updating your contacts in Xero, you can ensure that you have the information you need to make informed decisions about your business.
Integrations
Xero integrates with a wide range of business applications, allowing you to connect your financial data with other tools you use to run your business. Some popular integrations with Xero include:
- Online payment systems: Xero integrates with popular online payment systems, such as PayPal and Stripe, allowing you to receive payments from customers directly in Xero.
- Point-of-sale systems: integrates with point-of-sale (POS) systems, such as Square and Shopify, allowing you to import sales data directly into Xero.
- Accounting software: integrates with other accounting software, such as QuickBooks and MYOB, allowing you to import and export financial data between systems.
- E-commerce platforms: integrates with e-commerce platforms, such as Amazon and eBay, allowing you to manage your sales and expenses from these platforms directly in Xero.
- Inventory management systems: Xero integrates with inventory management systems, such as TradeGecko and Unleashed, allowing you to manage your stock levels and sales directly in Xero.
Integrating Xero with other applications allows you to streamline your business processes and save time by eliminating manual data entry. You can also ensure that your financial data is up-to-date and accurate to make informed decisions about your business.
Overall, the integrations available in Xero are an essential feature that allows you to connect your financial data with the other tools you use to run your business. Integrating Xero with other applications ensures that your financial data is accurate, up-to-date, and accessible in one place.
The Xero dashboard is customizable, so you can rearrange the widgets and display the most important information. The dashboard is accessible from anywhere, on any device, making it easy to manage your financials from the office, at home, or on the go.
Is Xero Safe to Use?
Yes, it is considered to be a safe platform to use for managing financials. Xero follows strict security measures to protect users’ financial data, including regular security updates, encryption of sensitive information, and secure backups. Xero is also SOC 2 Type 2 certified, which means it meets strict security and privacy standards for cloud-based services.
In addition, it allows users to set up two-step authentication for added security and provides access controls that allow administrators to set different user access levels.
Many users find Xero a safe and secure platform for managing their financials. However, as with any online service, it is always a good idea to implement best practices for online security, such as using strong passwords and avoiding public Wi-Fi when accessing sensitive information.
Xero Pros and Cons
PROS
Exceptional support with context-sensitive help
Uses AI effectively
Provides critical business views
Improved customer records
Advanced analytics
Processes billable employee expense claims
CONS
The user interface could be better organized
No inventory assemblies
Time entries must be tied to projects
Customer Service & Support
Xero provides a range of support options to help customers with any questions or issues they may have with the software. The available support options include the following:
Help Center: Help Center provides various articles and tutorials covering common questions and issues. You can search for articles by keyword or browse by category.
Community: A community is a forum where customers can ask questions, share information, and connect with other Xero users. You can find answers to common questions or start a new discussion.
Phone support: offers phone support for customers who need more direct assistance. You can call Xero’s support team during business hours to help with any questions or issues.
Live chat: also provides live chat support for customers needing real-time assistance. You can chat with a support representative for quick answers to your questions.
Email support: If you prefer to send an email, it provides email support for customers who need more in-depth assistance. You can email Xero’s support team with questions or issues, and they will respond within a reasonable time.
Overall, Xero provides a range of support options to help customers get the help they need when they need it. Whether you prefer to use the Help Center, community, phone support, live chat, or email support, Xero has you covered.
Xero alternatives
Xero is a popular cloud-based accounting software, but several alternatives offer similar features and functionality. Some of the most popular alternatives to Xero include:
QuickBooks Online: QuickBooks Online is a cloud-based accounting software that offers to invoice, expense tracking, and payroll features, among others. It is suitable for small to medium-sized businesses and provides integrations with a wide range of third-party apps and services.
Wave: Wave is a free cloud-based accounting software that provides basic invoicing and expense tracking features and a simple dashboard for tracking financial information. It is best suited for very small businesses or freelancers.
FreshBooks: FreshBooks is a cloud-based invoicing and accounting software that provides features for managing expenses, time tracking, and project management, among others. It is suitable for small to medium-sized businesses and provides integrations with a wide range of third-party apps and services.
Zoho Books: Zoho Books is a cloud-based accounting software that provides invoicing, expense tracking, and payroll features, among others. It is suitable for small to medium-sized businesses and provides integrations with other Zoho apps and services.
Kashoo: Kashoo is a cloud-based accounting software that provides invoicing, expense tracking, and financial reporting features, among others. It is suitable for small to medium-sized businesses and provides integrations with a wide range of third-party apps and services.
These are just a few of the alternatives to Xero available. Each software solution offers different features, pricing, and integrations, so choosing the one that best suits your business needs is important.
Final Verdict
In summary, Xero is a highly-regarded and feature-rich cloud-based accounting software that provides various tools for small to medium-sized businesses to manage their finances. With its ease of use, accessibility from anywhere with an internet connection, and range of integrations with other software, Xero can help simplify accounting tasks for businesses. However, the cost of Xero and its suitability for your business will depend on your specific needs and requirements. To determine if Xero is the right choice, it may be helpful to consider other alternatives and weigh the features, costs, and overall value each software provides.
