Xero is ideal for businesses in professional services, retail, non-profits, hospitality, and manufacturing sectors. However, you may want to use some Xero alternatives for additional features like unlimited invoices. It is reasonable to be concerned about Xero’s data security because it deals with sensitive personal and banking information. For a bank that does not support a direct feed connection with Xero, it enables bank data import in OFX, QIF, QBO, QFX, or CSV format for smooth operations across various product cost vs period expenses institutions.
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Xero represents a transformative cloud-based accounting solution that empowers businesses of all sizes to streamline their financial management. Xero represents a pivotal advancement in this evolution, offering cloud-based accounting software that addresses the complex financial challenges faced by modern businesses across various growth stages. XeroXero is a feature-rich, cloud-based platform that simplifies your accounting, billing, and financial reporting routines.Secure 90% OFF for 6 Months → As cloud accounting continues to redefine how businesses manage their finances, Xero remains one of the most powerful and user-friendly platforms on the market in 2025. Growing ecommerce businesses benefit from inventory management capabilities, while service-based companies leverage project tracking and billing features. The platform automatically processes bank feeds, categorizes transactions, and updates financial records, saving hours of data entry time while maintaining accuracy.
Here are the top five benefits that make Xero a powerful solution for businesses seeking to streamline their accounting processes. The platform integrates inventory data directly into invoices and purchase orders, maintaining accurate stock counts and valuations. Xero’s invoicing software automates the entire billing cycle through customizable invoice creation, scheduled reminders, and real-time payment tracking. Adviser roles grant specialized access to accounting professionals, and Administrators maintain full system control, including user management and security settings. The platform’s core workflows center around automated bank reconciliation, where transactions are matched against bank statements for accuracy and categorization.
Price: Premium Features Come at a Premium Price
Sales and purchase overviews provide access to bills, expenses, invoices, and purchase orders. It replicates some of the tools and data of the browser-based version, though a lot is missing. The main Xero app is designed for business owners who want to perform accounting tasks remotely. Xero has multiple layers of protection for the personal and financial information you entrust to the company, including encryption for data in storage and transport. Templates are available for one-time and repeating invoices and quotes, and you can queue up multiple statements to print or email.
The platform looks outdated, with a very rudimentary interface and site mapping that isn’t totally logical. This is because the platform is pretty unforgiving, both in terms of a steep learning curve and providing help when you need it. We wouldn’t recommend Xero to accounting novices who are likely to get stuck. For a full breakdown of how these two platforms compare, make sure to check out our guide to Xero vs Freshbooks. By contrast, the likes of FreshBooks limits you to one user per plan, with the option to pay for additional members.
Testing
- In this section, I’ll take you through some of Xero’s standout features, as well as areas where it falls short.
- As I checked each of its features, I was able to use them without any difficulty or challenge.
- If you’re a self-employed worker, how fast can you find out whether you’re on track with your income this month?
These templates, such as Duplicate Statement Lines and Foreign Currency Gains and Losses, focus on specific subsets of data that I haven’t seen on other small business accounting sites. In addition to adding customer data from CSV or TXT files, you can download templates for or import data from bank statements, budgets, Charts of Accounts, fixed assets, inventory items, and invoices. Wave Pro is $19 per month, but it’s most suitable for sole proprietors who don’t require payroll services, rather than the larger small businesses that Xero supports. Our Editors’ Choice winners are FreshBooks for service-based businesses, Intuit QuickBooks Online for companies that sell both products and services, and Wave for sole proprietors who don’t need payroll. Now is the perfect time to see how Xero fits your business, especially with the 90% off for six months discount.
The integration intelligently matches receipts to transactions, applies preset expense categories, and streamlines reconciliation by identifying and flagging matching transactions. Xero’s Brex integration automates several critical financial processes, starting with automatic transaction importing and categorization based on customizable rules. The automated connection maintains consistency between both platforms, providing a single source of truth for all corporate card transactions. The integration between Xero and Brex creates a seamless connection between corporate card spending and accounting records through automated data synchronization. Feature access and limitations vary by plan, allowing businesses to select the most cost-effective option for their specific requirements.
What is Xero accounting software and how does it work?
- As cloud accounting continues to redefine how businesses manage their finances, Xero remains one of the most powerful and user-friendly platforms on the market in 2025.
- Our personal pick would be Zoho Books, which combines excellent core accounting features with unmatched usability.
- The platform’s core workflows center around automated bank reconciliation, where transactions are matched against bank statements for accuracy and categorization.
- One of our eCommerce clients, operating across multiple markets, was struggling with manual data entry, delayed financial reporting, and cash flow visibility.
- Xero handles transactions across 160+ currencies with automatic exchange rate updates.
This saves time and lets you focus more on running and growing your business. Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations. 75+ categories of best business software selections. At FastLane, our Xero-certified team can help you get the most out of the platform from setup and migration to ongoing bookkeeping and reporting.
Xero aims to remedy this by centralising essential accounting tasks under one dashboard. In case you have complex accounting needs, you will still need an accountant to manage bookkeeping and taxation. Yes, Xero is an intuitive software that even beginners can use without training. I thought that I’d received a late reply because I was a trial user. While my overall experience of using Xero was positive, I noticed some platform limitations.
How does Xero accounting software work?
As one of the most trusted platforms in the cloud accounting space, Xero simplifies everything from invoicing and payroll to bank reconciliation and reporting. From small startups how to file taxes for ebay sales to established enterprises, the platform offers a comprehensive suite of features including automated invoicing, multi-currency support, inventory tracking, and real-time financial analytics. This direct integration enables real-time transaction flow from Brex cards into Xero’s accounting software, eliminating manual data entry while ensuring financial records remain current and accurate. Implementing the right accounting software can transform how businesses manage their financial operations and drive growth.
This will be off-putting to novice users, but seasoned accounting pros will appreciate the depth of insight at their fingertips. There’s also Xero analytics, the platform’s dedicated AI arm for accessing detailed cash flow predictions up to 90 days in advance. During our most recent round of testing, we were highly impressed with Xero’s financial planning features.
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It also offers advanced analytics, employee expense claims, and projects. The Xero Established version I tested ($90 per month) is the only one that supports multiple currencies. The Growing plan ($55 per month) supports unlimited billing and invoicing. I’ve been writing and editing technology articles for more than seven years, most recently as part of PCMag’s software team. Along the way, I took on reviews of other types of business and personal finance technology. I’ve been reviewing tax software and services as a freelancer for PCMag since 1993.
Businesses needing advanced financial insights and customization $27/month Currently discounted to $13.50/month for first 6 months £15/month (approx. $20.41) Currently discounted to £7.50/month (approx. $10.21) for first 3 months
Xero’s revamped dashboard (not yet available to everyone, as of this writing) makes for an even better launching pad for your accounting work than before. It’s not as aesthetically pleasing as FreshBooks, especially in areas like contact records, invoices, and transaction registers, which are particularly plain. You can experiment with the app using a demo company and fake data, which provides a good idea of how the app looks and functions. Xero helps set up your company file by asking questions whose answers it uses to build the foundation for your records and transactions. The equivalent Zoho Books tier (Premium) goes for $70 per month. The version of QuickBooks Online (Plus) that’s most similar to Xero Established costs $115 per month; here’s how the two services stack up.
Xero enables you to count the stocked items and shows you their total value, saving you time and reducing errors. It also supports accepting payments directly from the online invoice and reduces the time spent chasing payments. Xero lets you accept payment from your customers using multiple methods, increasing the chance of getting paid on time. You can categorize expenses, attach receipts, and assign them to specific projects or employees to ensure better organization and disputing an invoice accountability. I like that you can set up as many sales taxes as you want, and the software will record them automatically.
Step-by-Step Xero Setup Guide
Xero used to offer online bill pay through an add-on for BILL, a highly regarded standalone accounts receivable and payable application, but it is no longer available to new users. Customizing sales forms isn’t as flexible or intuitive as it is on competing sites, nor are data fields as plentiful. All these changes make the time you spend in Xero easier and more productive. The service expanded and rearranged the widgets (blocks of data) on this page, and they’re more attractive as a result.
While Xero remains a leading option for SMEs globally, it is important to compare it with other major accounting software like QuickBooks, Sage Accounting, Zoho Books and FreshBooks. With direct bank feeds from providers like HSBC, DBS, Airwallex, PayPal, and Stripe, transactions flow into Xero automatically. Xero eliminates tedious manual data entry by automating core tasks such as bank feeds, invoicing, bill payments, and reconciliation. Use Xero’s built-in financial reports like Profit & Loss and Balance Sheet to understand your business performance instantly. Once your data is in place, explore Xero’s built-in financial reports. If you’re switching from software like QuickBooks or MYOB, Xero offers migration tools and certified partners to help ensure a smooth data transition.