Xero Accounting Software [2021] - Overview, Pricing, Features & Competitors

Xero Accounting Software is ranked 283 amongst FT500 Asia-Pacific High-Growth Companies for 2021, joining a select group that could retain their spot in the annual rankings from 2020. This achievement came despite national lockdowns and a global economic slump led by COVID-19. So what makes Xero so attractive to accountants and bookkeepers even in times of stalling business activities?      

About Xero - An Overview

A cloud-based accounting software hailing from New Zealand, Xero enables proactive accounting in real-time for small and growing businesses. It simplifies day-to-day financial tasks, such as paying bills, accepting payments, claiming expenses, and makes light work of financial reporting — all without putting up with the complex accounting practices. As of 2021, over 3 million small businesses, accountants and bookkeepers have subscribed to Xero's accounting software and owing to Xero's robust features and industry-leading support, this number keeps growing. 

A notable advantage of Xero is that it's astonishingly user-friendly. So much so that Charles Chen of Charles & Partners compares operating Xero to using Facebook. Anybody, including those without an accounting background, can use Xero to keep track of their financial transactions, cash flows, and account details. And the best part, you can connect with Xero's certified advisors lest you feel you don't have sufficient accounting knowledge to perform a particular task. 

Since Xero is an online application, any device with an active internet connection can access its accounting software. The company's Xero Accounting mobile app is available for iOS and Android devices, and it provides access to Xero's key features on the go. The software further extends its usability with valuable add-ons and powerful integrations that make small business accounting seem like a breeze. For example, Xero's accounting prowess can be seamlessly clubbed with many market-leading systems like GoCardless, Service M8 and Tradify, to name a few. 

For these reasons, Xero Accounting Software has been registering exceptional revenue and profitability figures year on year. In March 2021, net profits surged to AU$19 Million from AU$3.1 Million in March 2020, citing Xero's high growth projections in the foreseeable future. 

Pricing

Xero offers three pricing plans to choose from — Starter, Standard and Premium. 

The Starter plan is ideal for self-employed professionals, sole traders and new businesses. It costs AU$27/month and includes the following features:

• Send quotes and 20 invoices

• Enter 5 bills

• Reconcile bank transactions

• Payroll for 1 person

• Capture bills and receipts with Hubdoc

• Short-term cash flow and business snapshot

However, if you're a growing business, you might want to consider the Standard Plan, which costs AU$54/month and includes features that allow some room to grow:

• Send unlimited invoices and quotes

• Enter unlimited bills

• Payroll for 2 people

• Bulk reconcile transactions

• Capture bills and receipts with Hubdoc

• Short-term cash flow and business snapshot

If your needs still aren't met, Xero recommends its Premium plan for established businesses like yours, starting at AU$70/month. It includes everything from Xero's Standard plan, plus:

• Payroll for up to 5 people

• Use multiple currencies

• Automate superannuation

All plans cover accounting essentials and offer optional add-ons: Claim Expenses and Track Projects, both of which are provided complimentary for 2 months for Australian-based subscriptions, and Analytics Plus, which is free for all Australian-based subscriptions until 31 January 2022. 

Also, Xero offers free access to all its features for 30 days, after which you can decide which plan suits your business the most. 

Besides these plans, Xero also offers a payroll-only plan for paying up to 4 employees, starting from AU$10.

Features

1. Dashboard

Xero's Dashboard provides instant insights into the financial position of your business. It gives a bird's eye view of the key accounts, income reports, expense reports and pending invoices. Not only that, but Xero also allows you to stay on top of your cash flow and upcoming bills and monitor certain accounts using customized notifications.

2. Bank Reconciliation

Xero Accounting Software imports all financial transactions into its database and matches them against appropriate accounts. Xero can import these transactions from bank accounts, credit cards, as well as PayPal accounts. In Australia, Xero has direct feed connections with banks like NAB, CBA, ANZ, Westpac, and Bendigo Bank. For 12 months until August 2021, Xero processed around 1.76 billion bank transactions using new improvements that leverage Artificial Intelligence(AI) capabilities.

3. Invoicing

With Xero, payments come faster with automatic online invoicing. You can customize the invoices as per your brand and business requirements and issue them for payments from various sources like bank transfers, credits cards or PayPal accounts. Another excellent element of invoicing is that Xero will automatically convert the invoice currency to the one used by your client, thus saving you time and manual work.

4. Security and Updates

For a web-based application that deals with sensitive information, providing adequate security is of paramount priority. Xero Accounting Software is well-aware of threats from hackers that continuously probe for vulnerabilities. Thus, Xero has a dedicated team that keeps adding and improving security layers from time to time that ensure your experience with the online accounting software is always optimal.

   

Competitors

1. Quickbooks Online

Quickbooks is one of the best alternatives to Xero Accounting Software because it has many same features and also offers a robust mobile app for iOS and Android devices. Quickbooks provides its clients with over 130 customizable reports; however, you have to upgrade to its costliest Advanced plan if your business will need more than 5 users.

2. Freshbooks  

Freshbooks offers an affordable alternative to Xero with its lite plan that starts at AU$8/month for six months at 60% off. It's generally preferred by freelancers, primarily for its professional-looking invoices and reliable time tracking.

3. Zoho Books

Unlike any plan offered by Xero, Zoho Books' accounting software is free for businesses with <AU$50,000 in revenues per annum. The software comes bundled in Zoho Suite, which includes Zoho CRM, Zoho Inventory, and Zoho Projects. Zoho Books also has a mobile app like Xero, but the software's integrated payroll feature is limited to Texas, California and New York.

Ending Notes

Xero is robust accounting software for small businesses that want a comprehensive solution to make their accounting less cumbersome, better interactive, and more insightful. The company has a strong track record supported by good growth potential and is renowned worldwide for its outstanding features, powerful integrations and world-class support systems. Therefore, if you're getting Xero for your business or professional practice, go right ahead without any hesitation.