Finance & Accounting Articles

A Cloud-Based Accounting Tool That Delivers: Review of Xero by VM-Associates

by Chris Bliss
Published on 10 May 2012

Our cloud migration consulting partners VM-Associates have been reviewing Xero cloud based accounting software.

As they have awarded a rare A+ rating to Xero and granted them their seal of approval for what they consider an "impressive all-in-one accounting solution", we have decided to republish this review to the benefit of our readers.

Read on for their full review.

The Quick And Dirty Verdict

The problem with "most" accounting solutions is they're either geared towards accounting dummies, and thus too limiting for SMB, or toward accounting professionals, and thus overwhelming. Xero bridges that gap. It's usable enough for DIY'ers and powerful enough for accountants. It has an elegant UI, robust feature set, thoughtful integrations, and beautiful reports. It's not perfect - there's still work to be done - but it's pretty damn good.

Functionality Of Xero

Ninety Percent of everything you'd want done in an accounting tool, Xero does. Money coming in (AR), money going out (AP), payroll, expensing, budgets - it's all in there. What's more, it's in there intelligently: Features link up intuitively, and everything comes together with clean, professional reports.

There's more to Xero than just the usual features, though. There's a thoughtful, robust permissions system, so accountants can share the books with business people (and business people can share with sales reps) and not worry about irrevocable damage. There's a clever feature called "tracking" so you can weigh customized categories against one another (ie, department against department, region against region). Auto-feeds from most major banks makes transaction imports a breeze (though no support for HSBC), and the mobile app is great. Never thought we'd say it, but this is one sexy accounting tool…

Of course, it's not all peaches and cream. It's lame that tracking is limited to two fields. There's no real support for inventory systems (though integrations largely take care of this). You can't forecast net profit based on predicted expenses, which sucks for companies with rising fixed costs. Also, Xero could probably take a cue from Freshbooks for their invoicing: online invoices would be a huge plus (currently, it just automates emailing pdfs), as would email reminders for overdue accounts. Oh well.

Usability Of Xero

Accountants aren't known for their grace or style but Xero manages both. Using Xero is a breeze (a pleasurable breeze, even). It contains a wealth of features without seeming overwhelming, and guides users through any technical stuff. The "Dashboard" - your horizontal view of accounts and AR/AP - delivers "at a glance" information, while granular detail is usually just a click or two away. Reconciling transactions - the grunt work - is easy and rule based. No sweat.

Our gripes are minor. The Xero help section, while helpful, feels like the old Microsoft card-catalogue way of organizing articles, and needs a facelift (badly). Also, what's with the fixed-width, left justified screen? It's weird.

Compared to the competition though (*ahem* Quickbooks *ahem*), Xero makes bookkeeping fun.

Security Of Xero

Xero has never suffered a security breach, not once, ever. That's because they employ high standard SSL encryption and firewalls, as well as 3rd party security audits, daily backups, and enterprise class hosting (Rackspace).

Integration Of Xero With Third Party Apps

Thoughtful integration is a big deal for online accounting. It's one of the industry's main advantages - finally, your accounting info alongside customer histories, integrated with your web portal, tied into POS. Luckily, Xero doesn't disappoint. In fact, their integration with others is outstanding: They've tied into numerous CRMs, inventory systems, and timetracking apps (to name a few), and they've done so in a fundamentally intelligent way (helping you get more from Xero). That's awesome.

The two integrations we've tested - Freshbooks and PayPal - were intuitive to setup, easy to maintain, and helpful when implemented. They also have a well documented API.


Xero is cheap. Their most expensive package is $39 USD/mo, and includes multi-currency support.


With the exception of the kinda crappy help section (which we already deducted points for), Xero's support isn't half bad. Complex support requests we submitted on Friday evening were dealt with by Sunday, and phone support was helpful and honest. We like that.

There's also a generous selection of 3rd party consultants available who don't collect referral fees.


It has been a long time coming, so it's great to see a cloud-based accounting tool that finally delivers. If you're a DIY'er small business owner, your invoicing, AP, payroll and more can all now live under the same (cloud based) roof. If you're an accountant managing multiple books, you now don't have to deal with whatever crap you were using. Use Xero instead. It's better.

You can also read this review on Vm-Associates' website and if you'd like to talk about how Xero might work for your business, or if you just want to talk cloud computing do not hesitate to contact them.

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Apps mentioned in this article