Xero Review
Unlimited users and advanced features make this cloud accounting software platform a good fit for many small businesses.
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WRITTEN & RESEARCHED BY
Lead Staff Writer
Last updated onUpdated
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REVIEWED BY
Editor & Senior Staff Writer
Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.
Xero
| Total Rating | 4.0 |
|---|---|
| Pricing3.7 | |
| Ease Of Use3.8 | |
| Features4.1 | |
| Customer Service4.7 | |
| User Reviews4.3 | |
Accounting Method
Accrual & Cash BasisPricing
$15 - $78/monthBusiness Size
Medium to large with unlimited usersXero At A Glance
- Xero is strong cloud-based software with a robust feature set
- Xero support unlimited users at no additional cost
- Xero integrates with hundreds of additional business software programs and apps
Pros
- Unlimited users
- Numerous integrations
- Suited for large businesses
- Advanced features
- Double-entry accounting
Cons
- Steep learning curve
- Poor customer support
- May be expensive for smaller businesses
- Some features limited to the most expensive plan
Table of Contents
What Is Xero?
Xero is cloud-based accounting software that has been giving QuickBooks a run for its money since 2006. Xero is a robust accounting solution with sophisticated accounting features, ample reports, 800+ integrations, and unlimited users. Unlike QuickBooks Desktop, Xero also has the mobility and modern UI of cloud-based software.
While Xero has a lot going for it, pricing increases, a lack of built-in payroll, and limited features on its least expensive plans are potential issues. Additionally, customer support has gone downhill since our last review. Still, despite the price ruling out the software for some small businesses, Xero has a lot to offer for medium and large businesses or those in need of multiple users.
Xero Pricing
| Pricing3.7 |
|---|
| Software Plans 3.8 |
| Pricing Transparency 4.2 |
| Pricing Customization 2.2 |
Xero used to offer incredibly scalable pricing. The other appeal of the software was that each plan came with unlimited users, access to every Xero feature, and payroll.
Xero no longer includes payroll — although a paid Gusto add-on is available — and it has limited some features (such as expenses and multicurrency support) to its most expensive plan. Unlike some of its competitors, there are very few add-ons. These factors lowered our pricing score for Xero to 3.7/5. Each plan still offers unlimited users and live bank feeds, so businesses can download, categorize, and reconcile their transactions as usual.
| Xero Plans | Price | When To Use |
|---|---|---|
| Early | $15/month | If you need accounting software with up to 20 invoices and 5 bills for unlimited users |
| Growing | $42/month | If you need accounting software with unlimited invoicing and bill management for unlimited users |
| Established | $78/month | If you need accounting software with advanced analytics, multicurrency support, and project management for unlimited users |
Xero offers three different pricing plans. Payments are made monthly. There are no annual contracts, so you can cancel your subscription at any time (although you must give a 30-day notice of your cancellation).
Xero offers a free 30-day trial and even has a demo company set up already, so you can explore the software before you buy it. Xero offers discounts for nonprofits and owners of multiple companies. Xero has been known for offering discounts in the past, so be sure to check the company’s website to see if it’s having a sale.
Here’s what you get with Xero’s new pricing structure:
Xero Early Plan
Xero’s Early plan costs $15/month and includes:
- 20 invoices and quotes
- 5 bills
- Bank reconciliation
- Bill & receipt capture
- Cash flow analytics
- W-9 & 1099 management
- Sales tax calculations
- Contact management
- Inventory management
- Live bank feeds
- Online payments
- Purchase orders
- Document storage
- Reports
- Unlimited users
Xero Growing Plan
Xero’s Growing plan costs $42/month and includes everything in the Early plan, plus:
- Unlimited invoices and quotes
- Bill management
- Bulk reconciliation
Xero Established Plan
Xero’s Established plan costs $78/month and includes everything in the Growing plan, plus:
- Expense claims
- Project management
- Multicurrency support
- Advanced analytics
Extra Xero Costs & Fees
| Xero Extra Costs | Price |
|---|---|
| Gusto Payroll | Starts at $40/month + $6/month/employee |
Xero no longer offers built-in payroll, but it does integrate with Gusto Payroll. Plans start at $40/month plus $6/month per employee.
Is Xero Easy To Use?
| Ease Of Use3.8 |
|---|
| Initial Setup 2.2 |
| Software Reliability 5.0 |
| Everyday Use 4.2 |
| Integrations 5.0 |
Xero has an attractive, modern UI. While the software is well-organized, it does have a steep learning curve (not as steep as QuickBooks, but it is more difficult to learn than other cloud-based options). It takes quite a while to explore all of the features it has to offer, but once you get acquainted with the software, Xero is fairly easy to use. Getting started is the most difficult part, and it’s this learning curve that lowered our ease of use rating to 3.8/5.
Xero tries to throw you as many bones as possible by adding a video or help article to the top of every page you open. If you need some extra assistance in finding features or understanding the software, Xero also offers a help center. We also have a comprehensive and free How To Set Up Your Xero Account guide that teaches you how to use and optimize your Xero account.
To get the most out of your software, Xero has over 800 integrations to choose from. If this isn’t enough, Xero also integrates with Zapier, connecting the software to hundreds of additional add-ons. Some Xero integrations are country-specific, so make sure they are compatible before you make any additions or purchases. Xero also offers API for developers.
Xero Features
Xero often gets praised for its robust feature selection by its customers, and we have to agree. Overall, Xero has a set of features that easily rival competitors like QuickBooks Online. However, we are disappointed that Xero lacks tax support, doesn’t have more advanced inventory, and doesn’t have more invoice templates.
Still, Xero’s feature set is strong, leading to our rating of 4.1/5.
| Xero Features | Availability |
|---|---|
| Budgeting | |
| Tax Support | |
| Invoicing | |
| Estimates | |
| Client Portal | |
| Contact Management | |
| Expense Tracking | |
| Bank Reconciliation | |
| Chart Of Accounts | |
| Accounts Payable | |
| Inventory | |
| Time Tracking | Established plan only |
| Project Management | Established plan only |
| Number Of Reports | 55 |
Here are more details about some of Xero’s key features:
Invoices & Estimates
Xero only offers a single invoice template. You can create custom templates and customize them extensively, but there could be more template designs to choose from. You can also create quotes with the same template. Here’s what to expect from Xero’s invoices and quotes:
- Recurring invoices
- Automatic invoice reminders
- Default payment settings
- Bulk invoicing
- Replication of previous invoices
- Client portal where customers can view, print, and pay invoices directly online
- Xero to Xero, which allows you to easily send and receive invoices from other Xero users
- Payment gateways available for invoice payments
- Create quotes
- Convert quotes to invoices, purchase orders, or bills
- Duplicate past quotes
- Add internal notes to quotes
Bookkeeping
- Xero Dashboard: The customizable dashboard features a beautiful UI with graphs labeled Bank Accounts, Invoices Owed To You, Bills To Pay, and Total Cash Flow. You can rearrange the order of these charts. A brand new navigation menu now reads Dashboard, Business, Accounting, and Contacts, and you can access a quick create button, search button, recent notifications, and an in-software help button along the top right.
- Sales Overview: In addition to a dashboard, Xero has a Sales Overview page with charts and graphs showing your invoices and estimates.
- Xero Expense Tracking: You can connect your bank and credit card account directly to Xero, or you can manually import your bank statements. You can easily categorize your expenses and split transactions. Xero’s smart categorization remembers the past transaction categories you used and automatically categorizes new transactions for you. (You still have to click each transaction individually to approve the categorization.) Note: Like most software using live bank feeds, Xero partners with Yodlee, which may violate some banks’ Terms and Conditions. Consult with your bank to see whether live bank feeds are a good choice for you.
- Expense Claims (Established Plan Only): To clear up any confusion, every Xero plan comes with the expense tracking features listed above. Established plan users get access to additional expense features, such as expense claims, automatic receipt scanning, extra expense analytics, and the Xero Expenses app. Note: Existing Xero users who were already using the expense claim feature will still have access to expense claims no matter which of the plans they are on.
- Bank Reconciliation: You can reconcile your accounts and run a Reconciliation Report in Xero.
- Chart Of Accounts: Xero automatically creates a default chart of accounts for you based on your organization type and industry. You can customize the default version or choose to import your chart of accounts.
- Accounts Payable: You can easily create and manage bills in Xero. You can enable recurring bills and attach relevant documents or photos of the bill to Xero. There’s a nice Purchases Overview screen that shows you details about your bills and purchase orders.
- Journal Entries: Users with Advisor or Standard roles can create journals (so long as they have access to all reports). You can also create recurring journals.
- Class Tracking: Xero allows you to set up two tracking categories with 100 individual tracking options within each category. These categories organize your information and provide more detail on your reports. Some people create categories for locations, departments, teams, manufacturing, etc.
- Purchase Orders: You can easily create purchase orders and convert them into bills. In addition to the basics, you can add internal notes, delivery instructions, and expected delivery dates to purchase orders. If your supplier ships your order in parts, you can record a “part supply” to keep track of how much inventory you’ve already received.
- Packing Slips: If your business needs packing slips, you can download the Packing Slip With Invoice template from Xero’s help center. I’d like to see this template downloaded in Xero so that the feature is already built into the software.
- Checks: Xero added the ability to write, customize, and print checks directly from your account. Read our post on the top places to purchase business checks to find the best deals.
- Fixed Asset Management: You can manage fixed assets and run depreciation schedules within Xero. You can choose between several depreciation schedules (fixed-rate, declining balance, a declining balance of 150%, etc.). You can add information, such as the asset’s serial number and the warranty expiration date.
- Default Email Templates: Xero offers eight default email templates and any number of custom templates.
- Multiple Currencies (Established Plan Only): Xero supports over 160 currencies so long as you have the Established plan. Currencies are updated hourly through XE, and reports can be customized and run in different currencies.
- Importing & Exporting: Xero has extensive import and export capabilities. Most anything can be imported and exported using multiple file forms. Importing data can be quite cumbersome and time-consuming, but Xero does give a lot of guidance on how to import data.
Inventory
You can add products or services to Xero, although Xero is much better suited for product-based businesses. Here’s what you get with Xero’s project management feature:
- Add items and record basic information
- Create internal notes
- Add attachments to items
- Inventory tracking
- Make inventory adjustments
- Track stock levels, average purchase costs, and number of items committed to quotes
There are no email reminders for low stock, and Xero does not allow your tracked items to go negative.
Reporting & Budgeting
Xero offers ample accounting reports and has a Budget Manager for creating and managing budgets. Here are the standout features worth noting:
- 55 reports covering everything from sales and budgeting to cash flow
- Custom reports
- Save your favorite reports for quick access
- Create three-month, six-month, 12-month, or 24-month budgets
- Run a Budget Summary to see if you’re hitting your financial goals
Xero Customer Service
| Customer Service4.7 |
|---|
| Personal Support 4.0 |
| Self-Service 5.0 |
Xero used to offer strong customer support, and while there are still a ton of great support resources available, getting in touch with an actual representative is a lot more difficult.
| Xero Support | Availability |
|---|---|
| Phone Support | |
| Email Support | |
| Support Tickets | |
| Live Chat | |
| Dedicated Support Representative | |
| Knowledge Base or Help Center | |
| Videos & Tutorials | |
| Company Blog | |
| Social Media |
Xero has never offered phone support and has relied on email support. It may take a day or two to get a response to your email, but there are plenty of other forms of support available. Despite a few shortcomings, we rated Xero 4.7/5 for its customer support.
Here are the ways you can reach Xero:
- Email: Contact Xero by email with questions.
- In-Software Help: Whenever you open a feature in Xero, you’ll find a video or an article explaining exactly what that feature is and how to use it. There’s also a help button in the top right-hand corner that will pull up relevant articles from Xero’s help center. Unfortunately, Xero removed the ability to chat with Xero representatives directly in the software.
- Help Center: Xero has a comprehensive help center called Xero Central with how-to articles and common troubleshooting issues. Xero Central also encompasses the Xero community, so you can view comments and questions from other users, and you can suggest new features as well. At the bottom of each help article, you can post questions to the Xero community or email a representative directly. When you email a rep, you can choose to let a Xero customer service agent have read-only access to your account so that they can better assist you with any problems you may be experiencing.
- Guides: Xero offers a ton of business guides, covering everything from invoicing and bank reconciliation to depreciation and more. There’s also a guide called “How To Start A Small Business: The Ultimate Guide” and an “Accounting Glossary” for new users.
- Xero TV: Xero TV offers hundreds of videos explaining how to use the software. It’s one of the best support resources Xero offers and is a great help to new users.
- Podcasts: If 700+ videos are not enough for you, you can check out the Xero podcasts, featuring digital marketing strategy advice and CEO talks.
- Training: Xero U is a training program offered by the company, which includes online courses, such as a “Getting to Know Xero” class.
- Blog: The Xero blog is well-developed and features business news, advice articles, ideas for success, and more.
- Social Media: Xero has Facebook, Twitter, YouTube, and LinkedIn accounts.
Xero Reviews
| User Reviews4.3 |
|---|
| User Feedback 4.0 |
| Review Site Aggregate 4.4 |
Reviews from users and accountants are primarily positive. Xero receives 4.5/5 stars on Software Advice (based on over 2,800 ratings), 4.3/5 stars on G2 (based on over 600 ratings), and 8.5/10 stars on TrustRadius (based on over 700 ratings). We took all user feedback into account when rating Xero 4.3/5 for its user reviews.
Negative Xero Reviews & Complaints
In the past, Xero received predominantly positive customer reviews. While there are still a large number of positive reviews, there are some negative reviews to keep in mind. Here are some of the recurring issues, according to Xero users:
- Mobile app functionality
- Pricing increases
- Steep learning curve
- No phone support
- Slow responses to emails
Positive Xero Reviews
Here are the most common reasons users like the software:
- Easy to use once you learn the ropes
- Robust feature set
- Good reporting
- Numerous automations
- Strong accounting
- Mobility of cloud-based software
- Numerous integrations
Is Xero Safe?
Xero has a reputation for some of the strongest cloud security out there. Security measures include data encryption, two-step authentication, and 24/7 monitoring at multiple locations. Data is backed up daily across various servers, and regular security audits are performed. Xero also boasts an impressive record of 99.97% uptime.
How Does Xero Compare To Other Accounting Software?
| Xero | QuickBooks Online | FreshBooks | |
|---|---|---|---|
| Price | $15-$78/month | $30-$200/month | $19-$60/month |
| Business Size | Medium To Large | Small To Medium | Small To Medium |
| Number Of Users | Unlimited | 1-25 | 1 |
| Accounting Method | Accrual & Cash-Basis | Accrual & Cash-Basis | Accrual |
Xero VS QuickBooks Online
Xero and QuickBooks Online have a lot of similarities, as both have strong features and numerous integrations. However, Xero is more affordable and supports unlimited users. QuickBooks Online is limited to 25 users on its most expensive plan but is easier to use, offers tax support, and has stronger mobile apps.
Xero VS FreshBooks
FreshBooks stands out for its customer support. However, Xero is the better choice if you want more advanced features and support for unlimited users, as additional users are only available for a fee if you use FreshBooks.
Final Verdict: Is Xero Worth It?
Xero is robust, cloud-based software with strong accounting, ample integrations, and some great features. It offers tons of automations to save your business time, such as automatic sales tax lookup, group invoicing, and default email templates. Plus, Xero supports unlimited users at no additional cost — a rarity in the accounting software world.
That said, the software does have its drawbacks. There is limited tax support, limited invoice templates, no built-in payroll, and a steep learning curve. Multiple pricing increases over the years have driven up the cost of the software, and customer support isn’t the best.
However, there are a few things to keep in mind. First, Xero’s built-in payroll was flawed. One of the biggest complaints I had about Xero was that not all 50 states had payroll support. (With Gusto, for example, all 50 states are supported, and businesses get added functionality, such as health insurance and retirement support.)
Xero has also added projects. This doesn’t forgive the fact that some features are limited to the most expensive plan, but considering that Xero offers unlimited users, the Established plan could very well still be cheaper for your business than QuickBooks Online if you have multiple users.
With an overall score of 4/5 in this review, Xero is a good solution for mid-to-large-sized businesses in need of strong accounting features and multiple users. Take advantage of Xero’s free trial to see if this accounting solution is right for you. If you’re still on the fence, check out our picks for the best small business accounting software to compare your options.
Matt Sherman
Lead Staff Writer at Merchant Maverick
Matt has been helping small businesses make decisions since 2017. He has written reviews and articles across many different channels but specializes in the point of sale, payroll, and small business insurance categories and has been quoted in articles for Fox Business, Forbes, and other publications. Prior to joining Merchant Maverick, Matt was a journalist and editor for 14 years for a pair of weekly newspapers. He is a graduate of the University of Oregon and currently resides in Gladstone, Oregon.
View Matt Sherman's professional experience on LinkedIn.
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Accounting Software Review Methodology
We spend hours researching and evaluating each accounting software system we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.
When rating accounting and invoicing software, we use a 47-point rubric that looks at pricing, ease of use, features, customer service, and user reviews. We weigh each section differently to calculate the total star rating.
- Pricing: 30% of the total star rating
- Ease Of Use: 20% of the total star rating
- Features: 30% of the total star rating
- Customer Support: 15% of the total star rating
- User Reviews: 5% of the total star rating
Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like relative cost, number of subscription tiers, data import, invoicing tools, quotes and estimates, client portal availability, bookkeeping support options, and the usability of the software interface. We also ensure that the software offers most standard accounting features and reports, awarding higher rankings to those that provide advanced services, like tax filing.
Read more about how we rate accounting software.
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