Xero believes in giving you — the small business owner — the power to plan ahead with your finances.
And truth to be told, I’m completely biased. (I liked the software so much I became a Xero-certified bookkeeper!)
If you’re in the market for software, consider Xero and then check out WaveApps, Zoho, Kashoo, and Freshbooks, too.
Overview of Xero
Xero is a robust accounting software that entrepreneurs can use by paying a monthly subscription between $9 and $70. It’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer.
Is it easy to learn?
Since Xero is so robust, it’s not the easiest of software to get up and running. In fact, I recommend that you use it with a professional accountant or bookkeeper. If you’re looking for accounting software that’s free and easier to learn, check out WaveApps.
That being said, it can be easily navigated once your accountant or bookkeeper is keeping everything organized. You’ll be able to see your cashflow in real time, which allows you to make smart financial decisions, check reports to see if you’re on track with your revenue goals and send beautiful quotes to potential clients.
What are the downsides?
There are a few downsides to using Xero as a small business owner, and I’m going to break them down into three categories: limited multicurrency options, no recurring billing, and accounting jargon.
1) Limited multicurrency option – Unless you choose the most expensive subscription ($70/month), you won’t be able to receive or invoice using foreign currency, which makes doing business with people outside of your country really difficult. So if you’re a solopreneur who needs under 5 invoices but needs multicurrency, you still have to choose the most expensive option.
2) No recurring billing – If you’re invoicing many different clients the same amount each month, you don’t have the option to charge their cards automatically. While Xero will duplicate the previous month’s invoice and send it, the client will still have to enter their credit card information to pay it.
3) Accountant jargon – This software, like many of the others on the market, is made with accountants and bookkeepers in mind. That means that a lot of the feature I love about it (old-school style, journal-based bookkeeping) are things that won’t matter much to you. It also means that you’ll have a more difficult time navigating the software and being able to make the most of its features. It’s best used with a professional.
Why should I use it?
1) Better than a spreadsheet – While Xero isn’t perfect, it’s also a major step up from spreadsheet-style bookkeeping. That means tax time will be easier to manage because everything has already been captured and recorded.
2) Easily accessible and useful reports – The reports are one of my favorite features of Xero.
3) Constant updates and great customer service – Xero knows the value of listening to its customers. As a result, they’re always rolling out new features, fixing technical bugs, and generally making the software more beautiful and easier to use. Plus, if you do encounter problems, the customer service is fast and at your disposal 24/7 for free. They’ll get back to you almost immediately and explain how to solve whatever problem you’re facing with patience.
4) Openly available information – While this software is made for accountants and bookkeepers, Xero still offers a lot of information for the DIY entrepreneur. You can find tutorials in dedicated training, articles, videos, and their handy-dandy accounting glossary.
5) Able to track inventory – This is a built-in feature that’s great for business owners who sell physical products, like t-shirts.
Quick rundown of Xero
- Started doing business in: 2006
- Based in: New Zealand
- Cost: Paid monthly subscription ($9 – $70)
- Free trial: 30 days
Credit card processing fees (via Stripe): %2.9 + 30 cents
- Automatic billing: No
- Payroll available: Yes (includes features like built-in timesheets, employee leave, and reimbursement of expenses)
- Multicurrency: Yes
- PayPal payment option: Yes
- Etsy connection: No (only through 3rd party applications)
- Shoeboxed connection: Yes
- Freshbooks connection: No
- Customized invoices: Yes
- Mobile app: Yes (There are separate apps for Invoices / Receipts / Payroll)
- Option to collaborate with team members: Yes
Still have questions about whether or not Xero is right for you? Leave a comment below or send me a message.