Accounting software

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Xero Review

Reviewer: Stephen Qualtrough
Developer: Xero
Overall rating:
Price: Visit website

Review summary

Good points

 Useful invoicing features

 Online file storage

 Basic inventory management tools

 Integrates with payroll

Bad points

 No timesheet or time tracking features

 Basic reports only

Our verdict

If you’re looking for attractive, easy to use software for a small business with basic accounting needs, Xero is a good option. With a good spread of useful features, Xero may lack the sophistication of a package like QuickBooks but it has the tools you need for accountancy tasks.

Full review

Xero is a New Zealand-based company producing cloud accounting software for non-accounting experts, geared to small businesses. With over 500,000 subscribers, the Xero accounting packages are popular yet not quite in the realm of FreshBooks or QuickBooks.

The Starter Plan is $20 a month and includes a limit on the amount of invoices and bills you can send, and a limit on the total amount of reconciled bank transactions. Standard is $30 per month and the Premium plan is $40 per month. Xero differs from other software packages in that you can have unlimited users on all plans, but multiple currency accounting is only available in the most expensive package. A 30-day free trial is available.

Invoices & Billing

Invoice creation - The set of templates is good in Xero, and you can also completely customize an invoice using your own document to get it looking the way you like.

Invoicing - The online invoices are updated whenever a client carries out any action, such as opening the invoice or paying it. However, Xero lacks invoice overdue reminders and automatic receipts upon payment. Direct payment through credit card and PayPal make it much easier for customers to pay, and for you to be paid on time. You can bill and see cash flow in multiple currencies that are updated hourly by (in the most expensive plan choice.) Create a quote proposal online and get clients to look at, comment on, and decline or accept the quote, which you can then turn into an invoice. Xero also makes it simpler to set up recurring involves or to schedule automatic bill payments so that you don't have to worry about forgetting a task. The bulk sending option is also handy.

Inventory - Xero provides basic inventory management tools for you to track your goods and the services you sell. Understanding your real time inventory value is great when you are a retail business or you sell goods online, but for medium and large businesses you will probably need to add on a more substantial inventory management tool. You can integrate external inventory tools with the Xero system. Create your own purchase orders so you can keep track of the items you are buying from suppliers, and crucial details like the agreed cost and delivery date.

Billing - Paying bills is easier with Xero. You can set up a list of all bills due, in order, and from there decide which need to be paid first. Suppliers can send invoices direct into your account so you don't lose anything, and the billing integrates with expenses so you can claim back anything that a client owes you in terms of billable items and time.


Xero has excellent bank reconciliation features. Import and categorize your bank transactions with the software so you can make sure all your transactions are correctly carried out and expenses are automatically imported. We like the tagging system for expenses – tag items as billable expenses and they show up on the designated invoices automatically. An easy way to process expenses is to take a photo of your receipt using your phone, and keep this as part of your records.

Xero has basic payroll facilities for some locations where you can record details of your payroll expenses, and print and save pay slips for staff members. If you need a more comprehensive payroll package you can integrate Xero with specialist payroll apps.

Time tracking

No timesheets or time tracking available with this product.


Find a range of basic reports in the Xero package, from profit and loss to aged creditors and debtors. In addition, the budget creation tools are useful and if you use Xero for payroll there are a number of payroll reports that you can run.


With apps for Android and Apple you can download and use Xero wherever you are. As the system is cloud based it does not matter what device you are using or where you are accessing Xero from – the apps work well on mobile devices and make it easy to stay connected to your finances.

Sharing & Integration

Over 400 apps link with Xero, making it one of the best-connected online accounting packages out there. All the popular integrations appear and there are new add-ons arriving all the time.

One handy tool that you’ll probably use quite a lot when you use Xero is the file attachment tool. Email items directly to your Files Inbox in Xero – great for adding any bills you receive from suppliers, or memos from your accountant. Storing all documents online in one place makes it easier to collaborate with your accountant when you need to.


Xero is fully secure and your documents and data are safe within the software. All the data is SSL encrypted and the servers are backed up and protected against unauthorized access. Xero also reports superior uptime, meaning you’re not likely to suffer any performance issues.

Ease of use

There is a setup wizard which gets you started quickly by prompting you to fill in details about your company, and you can also use a quick-convert mode if you are transferring data from another accounting software package like QuickBooks. Once you are set up, the interface is easy to use and logically laid out. A set of tabs across the top of the screen gives you the options you need for everyday tasks like checking your bills, creating invoices, and putting together reports. Drop-down menus from each of these tabs provide more options but these too are well-organized and clear.

Help & support

The support offered is good. The user guide is comprehensive and useful. The Xero community forum is another place to go to find answers to your questions, and there are videos for guidance, online webinars, and training courses. There is no telephone number to call but there is an email address that you can use to ask questions or make comments.


A clear and clean interface, easy to use features and reliable accounting processes make this a solid online accountancy package for small businesses.

Looking for more accounting software reviews?
See our side-by-side comparisons and in-depth reviews

1. Freshbooks
2. QuickBooks Online
3. Sage One
4. Xero
5. Zoho Books
6. NCH Express Accounts
7. LessAccounting