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Xero's straightforward accounting software is well-suited for sole proprietors and small and growing businesses. Its intuitive design makes it easy for businesses to link their bank accounts and start sending invoices and paying bills in no time.
Pricing:
Xero often offers promotional pricing, so be sure to check for any applicable discount codes before purchasing a plan.
Early: $15/month
Growing: $42/month
Established: $78/month
Xero is accounting software for small business owners who need an affordable, easy-to-use online accounting solution that includes invoicing, data capture and storage, and bill payment. Xero integrates with Gusto, a full-service payroll provider, for businesses that want to add on a payroll service.
Xero has plenty of features that small business owners love, including an accounting dashboard, invoicing, quotes, bill payment, analytics, and data capture and storage.
Xero's user-friendly dashboard is one of its best features. The dashboard is where you can get a snapshot of your accounting information all in one place. Users can access their bank balances, invoices, bills, and more with just a few clicks.
Your dashboard can display:
You can turn the sample dashboard on to get an idea of how your dashboard could look once it's populated with your business's data.
The Organization menu option enables users to access settings and files or add new organizations.
Clicking the "+" button takes users to a quick actions menu where they can quickly create invoices or bills or add new contacts.
Xero is compatible with over 1,000 apps and has its own app store. Users can access connected apps or add new ones by clicking on the app launcher icon.
Xero's invoicing feature is where it really shines. Xero's online invoicing tool makes it easy to bill customers and receive payments online.
Let's take a look at some of the benefits of Xero's invoicing feature.
With Xero, you can either create invoices from scratch or copy and edit invoices to save time. If a client accepts an estimate, you can create an invoice directly from the quote. You can also generate repeating invoices for recurring jobs. Sales tax is automatically calculated and included in each invoice.
Xero allows users to attach documents to the invoice (such as a summary of the job or associated receipts). What's more, Xero's mobile accounting app allows users to create invoices directly from their mobile devices.
Xero allows you to add your logo and a personalized message to your invoices, which conveys a sense of professionalism and helps customers trust that it's you they're receiving the invoice from.
You can use Xero's demo company to create sample invoices using fictional data. A sample invoice can give you an idea of what an invoice will look like from a customer's perspective.
Xero lets you add your payment terms to an invoice so customers know when it is due (due dates must be at least one day after the invoice's date). After you connect a payment service to Xero, a "pay now" button is automatically added to your invoices so customers can pay you directly from the invoice.
Adding a "pay now" button is free; however, you may be charged a transaction fee for each payment made via card or digital wallet.
Customers can pay straight from their invoices via:
One limitation is that if you use a custom payment URL, you will need to manually apply the payment to the invoice once you receive it.
You can turn on automatic payment reminders to save time otherwise spent pursuing overdue invoices. You can choose how often customers receive reminders, and turn off reminders for specific customers or invoices.
You can also include a link on your invoice that shows all outstanding bills for that contact.
Xero enables you to easily view the payment status of your invoices to see who has paid and what is overdue. You can also bulk import invoices from other accounting software to Xero so all your invoices are accessible from one place.
Xero makes it easy to create estimates by breaking down jobs into billable chunks and attaching written details, images, or documents (such as legal agreements) to the quote. You can also copy quotes to quickly create new quotes.
All you have to do to create a quote is click on the Business menu in the dashboard, select Quotes, then click on New quote.
If you have multiple items for one quote, you can click the Add row button, and if you need to rearrange items you can drag and drop item lines by left-clicking on the icon to the left of the item line.
With Xero's quote tool, you can:
The quote form includes multiple fields, enabling you to provide a thorough description of everything your estimate entails.
You can add unpaid bills and purchase orders to Xero via desktop or mobile app, making it simple for small businesses to keep track of what they owe.
With Xero's bill pay features, you can:
Businesses on Xero's Established plan can pay bills in over 160 currencies.
You can use Xero's demo company to create a sample bill, which contains a payment status bar, the description and cost of the purchased item, and an Add Payment button.
While Xero doesn't offer payroll directly, it does integrate with Gusto. Gusto is cloud-based payroll software that can support businesses of all sizes, from contractors to enterprise organizations.
Gusto offers the features small businesses need, including:
Gusto's plans for small businesses start at $40/month, plus $6/month per person. Its contractor-only plans start at $35/month, plus $6/month per person.
All of Xero's plans come with a data capture and online file storage feature, making it easy to store information from receipts and scanned documents.
Xero uses Hubdoc, a platform that enables you to import financial data by:
From there, Hubdoc converts the information from the documents into data that can be automatically synced with and stored by Xero.
To get started with capturing and storing data, users can navigate to Xero's Organization menu to either set up a new Hubdoc organization or connect an existing Hubdoc account.
Xero's analytics features show business owners short-term cash flow projections and a business snapshot to help them keep a pulse on how their companies are performing.
Xero's analytics feature for the Early and Growing plans includes a summary of important financial trends, the ability to run the dashboard based on either cash or accrual, and cash flow projection for the next seven to 30 days.
The Established plan includes Analytics Plus, advanced analytics that provide custom reporting date ranges, cash flow projections for the next 60-90 days, and predicted cash transactions, bills, and invoices based on your transaction history.
The business snapshot table shows some of the key differences between Xero's analytics and Analytics Plus features.
Xero's inventory feature helps business owners track and report on the quality and value of existing stock.
You can use Xero's inventory tracking service as long as your company meets the following criteria:
For businesses that have larger amounts of stock, do business via an eCommerce channel, or operate with negative inventory, Xero offers Inventory Plus --a full-service inventory management system.
With Inventory Plus businesses can reconcile payouts, integrate with eCommerce platforms, and fulfill up to 1,500 orders per month from multiple sales channels.
Business owners on Xero's Growing or Established plans can purchase Inventory Plus for an additional $39/month.
This comparison table shows the differences in capabilities between Xero's built-in inventory tool and Inventory Plus.
Xero's highly rated accounting app enables you to create and send invoices, monitor cash flow, and reconcile bank transactions directly from your phone.
Xero Accounting's dashboard displays outstanding invoices and bills, a profit and loss report, and a cash flow graph.
Xero uses double-entry accounting, but it's mostly done behind the scenes. As the program operates on the very real premise that, as a business owner, you may not know a lot about accounting, it suggests that if you need to enter a manual journal entry, you farm that process out to your bookkeeper or accountant.
Online accounting needs to be easy to use, otherwise it loses its time-saving appeal. One of the biggest benefits of Xero's accounting software is its simplicity. Small businesses can save time and money by automating their accounting processes and consolidating resources for easy access.
Xero offers a 30-day free trial (no credit card required) for new users and affordable plans for small businesses of all sizes. Businesses that are just getting started or sole proprietors can sign up for the Early plan starting at just $15/month, and then upgrade to its Growing or Established plans as they scale.
All plans include invoicing, bill pay, data capture and storage, short-term cash flow tracking, tax form management, and auto sales tax.
The Early plan is $15/month. This plan is designed for sole proprietors or early-stage enterprises and includes 20 invoices and five bills or purchase orders per month. Users can upgrade at any time to the Growing or Established plans for unlimited bills, purchase orders, and invoices.
The Growing plan is $42/month. This plan is a good option for growing businesses that send a lot of invoices or have multiple financial accounts. It includes unlimited invoicing and bills and bulk reconcile transactions, which allows businesses with multiple business accounts to quickly match the information in their accounting records to their bank statements and detect any discrepancies.
The Established plan is $78/month. The Established plan is best for businesses that have been around for a while or companies that do business internationally. With this plan businesses can pay and get paid in multiple currencies, track projects, claim expenses, and access customized analytics and predictions. As with the Growing plan, businesses on the Established plan get unlimited invoices, purchase orders, and bills.
Xero offers payroll and advanced inventory management as add-ons.
Payroll. Businesses that need full-service payroll can add payroll via Xero's partner Gusto. Gusto's payroll plans for small businesses start at $40/month, plus $6/month per person.
Inventory management. When you sign up for the Growing or Established plans you can add on Inventory Plus -- Xero's full-service inventory management system -- for an additional $39/month. With Inventory Plus businesses can fulfill up to 1,500 orders per month from multiple sales channels.
Early | Growing | Established | |
---|---|---|---|
Invoices | Up to 20 | Unlimited | Unlimited |
Bill pay | Up to 5 | Unlimited | Unlimited |
Bank reconciliation | ✔️ | ✔️ | ✔️ |
Data capture and storage | ✔️ | ✔️ | ✔️ |
Short-term cash flow analytics | ✔️ | ✔️ | ✔️ |
Tax form management | ✔️ | ✔️ | ✔️ |
Auto sales tax | ✔️ | ✔️ | ✔️ |
Bulk reconcile transactions | ❌ | ✔️ | ✔️ |
Multiple currency use | ❌ | ❌ | ✔️ |
Project tracking | ❌ | ❌ | ✔️ |
Expense claims | ❌ | ❌ | ✔️ |
Analytics Plus | ❌ | ❌ | ✔️ |
Inventory Plus | ❌ | Optional | Optional |
Payroll with Gusto | Optional | Optional | Optional |
One sticking point in Xero is the lack of live support. While the application is easy to use
Xero Central offers a variety of learning resources including the following options:
If you can't find the answer to a question from any of the above resources, you can contact Xero via the support page to request additional help.
"There's an app for that" takes on new meaning for Xero users, since Xero currently integrates with more than 700 third-party applications in a variety of categories including payroll, point of sale, practice management, time tracking, CRM, and e-commerce.
Another clear benefit of using Xero is that you don't have to know anything about accounting in order to use the application properly. Finally, if you have employees scattered all over the place, they can still do their work, as Xero is an online subscription service, available anywhere that has a decent internet connection.
It can be difficult to figure out which accounting software application is the best choice for your business. Some of the questions you may ask yourself are:
In Xero's case, the answer is yes to all of the above. 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.
Invoicing & Payments | Budgeting Capability | Customer & Vendor Management | Good Reporting Options | |
---|---|---|---|---|
Xero | ||||
GnuCash | ||||
Wave Accounting | ||||
QuickBooks Online | ||||
FreshBooks |
It's not likely, as there are three plans available, and you can upgrade to the next level at any time.
Yes! There are mobile apps for both iOS and Android devices that allow you to enter and approve invoices, add payments, track expenses, and add receipts.
Xero is perfect for those who don't know accounts payable from accounts receivable. It uses terms we use in everyday life like bills, payments, and invoices.
Our Small Business Expert
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