Xero Review: Pricing, Features, Pros and Cons

Instead, you can integrate a payroll add-on called Gusto, recommended for up to 100 employees. It’s a full-service option with unlimited, automated payroll runs and direct deposit. In addition, Gusto pay runs sync seamlessly as Bills in Xero. †Xero customers who use online invoice payments get paid up to twice as fast than those who profit margin formula don’t use online invoice payments. Today’s leading accounting platforms offer standard security features like data encryption, secure credential tokenization and more. While human error will always play some role in security breaches, you can be confident in your accounting platform when it comes to keeping your information safe.

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Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships. Use the accounting app to keep track of due and overdue invoices and whether they’ve been paid. Create, edit and send invoices as soon as the job is done directly from the mobile app.

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That includes the chart of accounts, invoices, bills, contacts and fixed assets. We recommend working with an accountant or bookkeeper, preferably one with Xero experience, when you make the move to how to make an invoice software. With your accounting software and data stored online in the cloud, you can access your up-to-date accounts anywhere there’s an internet connection. Your Xero data is backed up regularly and protected with multiple layers of security. This is because QuickBooks was designed for small businesses that might not have an accounting background, whereas Xero was designed with accountants and bookkeepers in mind. QuickBooks is also better for businesses that need to track inventory, as it has built-in inventory management features.

See how Xero works for your business

For Payroll with Gusto (US), pricing is based on the number of users who are paid each month. 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. Employees can submit a reimbursement request as soon as their receipts are uploaded, and the business owner can track expenses totals by category as they are submitted (Figure C). We recommend using Xero if you’re a small-to-medium-sized company that values affordability, collaboration, and user-friendly design.

1. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities.
2. I don’t use this App for financial reports, adjustments, or other things it does not allow (of course) but I do everything else in Xero cloud/browser.
3. Check out the Xero App Store to find, try and buy business apps that connect easily to Xero online accounting software.
4. These ratings are meant to provide clarity in the decision-making process, but what’s best for your business will depend on its size, growth trajectory and which features you need most.
5. Xero does offer an invoice template to help get you started, and you can choose to create and save your own templates.

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. Most small businesses will exceed that limit quickly and be forced to upgrade to a more expensive plan. It provides a comprehensive view of a company’s cash flow by presenting upcoming bills and outstanding invoices in a clear, tabular format. Whether you have its basic or most advanced plan, the Xero app supports unlimited users for real-time collaboration between your employees, accountants, and financial advisors. Xero and QuickBooks are both great accounting software options for small businesses.

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There is limited tax support, limited invoice templates, no built-in payroll, and a steep learning curve. Multiple pricing increases over the years have driven up the cost of the software, and customer support isn’t the best. In contrast to allowing unlimited users, Xero does limit you to one organization or business per subscription.

QuickBooks is available in both desktop and online versions. The desktop version is installed on a computer, while the online version is accessed through a web browser. QuickBooks Online includes all the components of the desktop version, plus additional features such as more app integrations, a fully functional mobile app and more attractive pricing. The Online plans start at $30 per month, whereas the Desktop plans must be paid annually and start at $492 per year. Xero is cloud-based accounting software that has been giving QuickBooks a run for its money since 2006. Xero is a robust accounting solution with sophisticated accounting features, ample reports, 800+ integrations, and unlimited users.

Apps like Stripe, GoCardless, Vend, and Shopify connect seamlessly and sync data with Xero. Both Xero and QuickBooks Online have their own versions of transaction tracking tags, but QuickBooks Online is the winner in this arena. Xero lets users create two active tracking categories, while QuickBooks Online allows users to create 40 in the Simple Start, Essentials and Plus plans. QuickBooks Online’s Advanced plan allows for unlimited tag groups. The more categories you create, the more reports you can run to get a better idea of how your business functions and where there’s room to grow.

Xero offers discounts for nonprofits and owners of multiple companies. Xero has been known for offering discounts in the past, so be sure to check the company’s website to see if it’s having a sale. If your bank doesn’t already have a connection, you can import PDF statements. They keep the language simple which is great for users who don’t know accounting terminology.

Wave Accounting is a free accounting solution for very small service-based businesses, contractors, freelancers and consultants. If you can’t justify paying for QuickBooks Online or Xero or they workers comp audit have too many features your business doesn’t need, Wave might be an ideal alternative. It has comparable invoicing features, but lacks an audit trail and doesn’t integrate with third-party apps.

This is because Xero allows you to see how much each project is costing you in real time and compare that to your estimated profits. Xero is also a better option for businesses that are expanding internationally as it offers multicurrency support. Just keep in mind that unlike the inventory feature in QuickBooks Online’s higher-tier plans, Xero doesn’t let users set up reorder points that flag when stock is running low.