Finance & Accounting Articles

Xero Review – Modern Online Accounting Software

by Jonathan Garro
Published on 18 November 2013

Xero Review - Accounting made easy for small businesses

When it comes to your business, few things are more important than keeping your accounts updated and accurate. The challenge of maintaining a single ledger grows as more people become involved, and desktop software can compound this problem if syncing between computers can lead to inaccuracies and an excessive amount of manual data entry. What makes online accounting software so appealing is the fact that your business only deals with a single ledger that you and your accountant can access.

In this Xero small business accounting review , I'll be looking at the process of setting up and using the app for a small business, and then exploring the usability and power of service's features.

Xero Review - Getting Started

The setup wizard walks you through entering the information you need to quickly set up your business. You can also skip through the wizard and just start using Xero later, but the scope of the information that you input now helps make the experience with Xero simple once you get started. The app walks you through various categories, asking for information about your business and allows you to customize various financial settings like currency and tax rates. Xero's flexibility shines here, as you have total control over how you use the app. For instance, you choose your tax basis and input your tax ID number.

Xero small business accounting Review screenshot

Access Accounts

When the app prompts you to invite other users, it will explain the convenience of allowing your accountant to access Xero's web interface. After entering his or her name and email address, you can establish the level of access given to each user. These options include Read Only, Invoice Only, Standard, and Advisor. Each of these levels also has some customization regarding bank information and invoicing powers.

Xero small business accounting Review screenshot

Enter Financial Information

Powerful Interface

After taking the time to get set up, you will be brought to the dashboard for your company. Anyone familiar with the concept of double-entry bookkeeping will feel comfortable with the interface immediately. For those who need a few pointers, a getting-started guide is presented upon first accessing the dashboard, and I found the videos to be particularly helpful in explaining the app's features. The dashboard gives you easy access to your bank accounts and expense claims, as well as widgets that show money coming in and money going out. From these widgets you have quick access to your sales and purchases pages.

Xero small business accounting Review screenshot

Money coming in & out

Navigating around the various options is done via the drop-down menus at the top of the page and offers quick access to your dashboard, accounts, reports, contacts and settings. For the most part, Xero presents information in a very clean way, and balances simplicity with rich information. Many pages, such as your sales overview, add monthly data to give you a quick visualization of trends.

Xero Review

There are plenty of opportunities to customize the Xero interface to suit your workflow. For instance, the reporting page is divided up into performance, positions, cash, detail, and foreign currency, and each of these categories contains several reports that are automatically updated. A star icon next to each of these can be selected to move the link into your navigation bar for quick access in the future.

Integrated Features

Xero does much more than simply helping you keep an eye on your ledger. The sales section offers a robust invoicing system to create and track what customers owe you. Invoices can be created manually or on a repeating basis. The grid allows users to enter basic information about the client and the work that was completed or the items that were sold. Once an invoice is created, you can save it as a PDF or email it directly to the customer. Organization tools allow you to filter invoices based on their payment and approval status, and you can be alerted when one is past due. There are invoicing services that offer users more control over how the documents look, but having these tools integrated directly into an accounting app is incredibly convenient.

Xero small business accounting Review screenshot

Xero's billing tools work in much the same way as invoicing, and are also integrated into your dashboard via the "money going out" section. Again, any bills you enter can be categorized in a number of ways, from utilities to materials.

While the dashboard gives you a good overview of your company's finances, you will almost certainly want to dig deeper with Xero's powerful reporting tools. The app will calculate your assets and liabilities to form an up-to-date balance sheet. The time frame for the balance sheet can be adjusted to any time period you choose, and you can add a second time period to easily compare them. In addition to a balance sheet view, Xero also allows you to view your cash summary and income statement, as well as sales tax reports and aged payables and receivables.

Xero Review

In order to streamline your accounting, Xero also allows users to create their own database for contacts. By default, you will find a group for clients and for suppliers, but you can customize these groups as you see fit, and importing is simple with CSV file support. The advantage of having a unified list of contacts built into the app is the tight integration it offers with bills and invoices. Pulling up a contact reveals associated information about invoices or bills.

New Features

Xero releases new features as frequently as every three weeks. They recently released files and purchase orders features and will roll out payroll in the U.S. in a few weeks.

Traditionally, files created and received as part of business have been stored away in filing cabinets, shoeboxes or in some folder on computers. With this new feature businesses will no longer have to store financial data and files separately. The Files feature lets users attach multiple documents to almost anything in Xero and have them available exactly where you expect to find them. Files can be associated with invoices, transactions, expense receipts, fixed assets, contacts, chart of accounts, bank accounts and even manual journals.

As of last week, Xero users can now create purchase orders and email them directly to suppliers from within the application. These documents live in the Purchases dashboard, where they can be easily located by sortable columns or a search function. Like invoicing, purchase orders can be customized to include branding and set to follow an approval workflow.

Integrated payroll and accounting is currently available in Australia and will be released in the U.S in mid-December. There will be more to come on this feature in our next Xero review.


Xero offers tiered pricing that varies by region (United States, New Zealand, Australia, and the United Kingdom). They have recently announced a new pricing structure that will take effect on December 9. In the U.S, Starter and Standard tiers will cost $9 and $30 respectively Businesses that need payroll for multiple employees can choose from the Premium packages that range from $70 to $180 per month. In Australia, the Starter and Standard tiers will cost $25 and $50 per month respectively. The Premium tiers will range from $60 up to $90 per month. In the UK, pricing will range from £9 to £25 per month . In New Zealand, pricing will range from $25 to $65 per month. For countries located outside these regions, pricing ranges from $20 to $40 per month.


There is a number of accounting software on the market, but this Xero small business accounting review demonstrates that Xero manages to set itself apart by operating in the cloud. Having a ledger that is always without the need to sync between desktops not only ensures accuracy but also makes collaboration extremely efficient. This accounting app is an excellent example of a tool that is intuitive enough to begin using immediately yet robust enough to meet the needs of organizations of any size. In addition to the highlights I mentioned, there are dozens of features that new users will continue to be pleasantly surprised by. Xero is also making significant efforts at helping small businesses understand how they can use accounting software with a dedicated site that includes comprehensive small business guides.


Apps mentioned in this article