Xero Review: Pricing, Features, Pros and Cons

Xero connects to more than 21,000 financial institutions around the globe, meaning the chances are very high you’ll be able to connect to your business bank accounts and automatically import transaction info. At Business.org, our research is meant to offer general product and service recommendations. We don’t guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Xero is a great fit for midsize or growing businesses with team members who collaborate on accounting tasks. For starters, unlike most of its competitors (most notably QuickBooks Online), all of Xero’s plans allow for unlimited users. If your business is large enough that you can’t (or don’t want to) send invoices, read reports, and reconcile bank transactions on your own, Xero is an efficient, affordable choice. The Established plan costs $78 per month and includes unlimited numbers of invoices and bills. In addition to all the features of the other two plans, the Established plan includes the use of multiple currencies, tracking time and projects, claiming expenses and viewing in-depth analytics. The tradeoff for Xero’s unlimited users on the Early plan is that it enforces pretty stiff limits on other things, only allowing 20 invoices and 5 bills per month.

Plans to suit your business

Fortunately, Xero syncs with nearly 1,000 third-party apps, including expense tracking apps like Expensify. The Growing plan costs $42 per month and includes unlimited numbers of invoices and bills. In addition to the features on the Early plan, the Growing plan includes bulk transaction reconciliation to speed things up. Xero is a great option for large teams and small- to medium-sized businesses that need high-level accounting systems.

Project and time tracking

In other words, if you need to do accounting for more than one business, you’ll need to purchase an account for each one. This is a real drawback for owners of multiple businesses or bookkeepers who work with multiple clients. These reports help small business owners identify areas for improvement and make evidence-based decisions in real time. Xero doesn’t offer as many pre-built reports compared to Xero alternatives such as QuickBooks. Xero has a mobile app, Xero Expenses, that allows you to snap pictures of receipts and create an expense instead of having to manually enter all the information. This feature is available on all pricing plans; which I appreciate since some accounting software charges extra for mobile receipt capture.

Xero’s simple invoicing tool (Figure A) makes it easy to upload your logo and choose from several branding themes, but I’d love to see more extensive customization options. Xero does offer an invoice template to help get you started, and you can choose to create and save your own templates. Once customers receive the invoice, they can pay you directly from it by clicking the “pay now” button and using a credit card, debit card or direct debit.

Invoicing and payments

1. (In contrast, accounting products from Sage or Zoho sync largely with other Sage or Zoho apps, not third-party solutions.) It’s hard to find a more convenient accounting solution than that.
2. Xero’s invoicing capabilities allow you to create and customize an invoice for clients and then accept credit card, debit card or bank transfer payments within the invoice itself.
3. And we’ve hit on Xero’s unlimited users before, but it’s worth mentioning again.
4. It’s also a good fit if you want to integrate Gusto Payroll to your accounting platform.
5. I also reviewed official product documentation, watched demo videos, consulted user reviews and cross-referenced software reviews in industry publications.

Transactions initiated by app partners budgets accounting and planning may automatically contribute to your invoice limit. †Invoice limits for the Starter plan apply to both approving and sending invoices. Once you’ve got your bank information in Xero, the software will help you match up your transactions for reconciliation (Figure B). Keep in mind that bulk reconciliation is not included with the cheapest Early plan, so you might have to pay to upgrade if you want this feature. I wish it was included in all plans, because manually reconciling one transaction at a time is very tedious for many businesses.

What is better: QuickBooks or Xero?

Hubdoc is included in Xero Early, Growing and Established plans as long as it’s connected to your Xero subscription. Your use of the Xero services is subject to the Xero Terms of Use and your use of the Hubdoc services is subject to the Hubdoc Terms of Use. Hubdoc is included in Xero Starter, Standard and Premium plans as long as it’s connected to your Xero subscription. But if you’re on a tight budget and don’t need the extra features on the Established plan, then I recommend checking out our recommendations for the best free project management software, which offer many of the same tools at no cost.

Most small businesses will exceed that limit quickly and be forced to upgrade to a more expensive plan. Most of Xero’s more advanced features — including multiple currencies and time tracking — first in first out fifo advantages and disadvantages are limited to the most expensive plan, meaning that businesses must be willing to shell out $78 a month to get access to them. FreshBooks starts at $19 per month after the signup discount and incorporates standout features like team roles and time tracking on all plans. The basic plan allows users to send unlimited invoices and estimates and track unlimited expenses up to 5 clients, so if you have more clients than that, you’ll need to upgrade. And we’ve hit on Xero’s unlimited users before, but it’s worth mentioning again.

(In contrast, accounting products from Sage or Zoho sync largely with other Sage or Zoho apps, not third-party solutions.) It’s hard to find a more convenient accounting solution than that. Plus, unlike many of its competitors, Xero includes inventory management with every plan—with QuickBooks, you don’t get inventory tracking unless you’re paying $80 a month for the Plus plan. It gives small business owners access to Xero’s adjusting journal entry definition suite of tools to help manage their business and their people processes in one plan. The Ultimate plan includes all Xero’s core accounting features plus tools for advanced analytics, employee management and multi-currency.