Xero Review 2020

Even though Xero has been around since only 2006, the New Zealand–based accounting company has already racked up 2 million customers¹—a number QuickBooks hit just a few years ago in spite of its decades-long history.² In fact, here at Business.org, Xero is our favorite cloud-based accounting software for small businesses, surpassing QuickBooks, FreshBooks, and Wave to nab our top spot.

So what sets Xero’s software apart from the herd, and most importantly, is it a good fit for your business? Keep reading; our Xero review lets you know if the software’s price, features, and support match your business’s needs.

Unlike most of its competitors (most notably QuickBooks), all of Xero’s plans allow for unlimited users. That makes Xero a great fit for midsize or growing businesses with team members who collaborate on accounting tasks. In other words, if your business is large enough that you can’t (or don’t want to) send invoices, read reports, and reconcile bank transactions on your own, Xero is an efficient, affordable choice.

Plus, unlike many of its competitors, Xero includes Inventory management with every plan—with QuickBooks, you don’t get inventory tracking unless you’re paying $70 a month for the Plus plan.

Each Xero plan includes these key accounting features:

• Automatic bank account syncing
• Easy-to-generate financial reports
• Unlimited user access
• Integration with over 800 apps
• Invoicing and billing, including payment acceptance through invoices
• Inventory tracking
• Sales tax calculation and tracking

As of mid-March, all of Xero’s plans include improved data entry and bank reconciliation via Hubdoc. When you use Hubdoc to scan receipts and bills, the financial data will automatically sync with your software so you don’t have to enter the numbers yourself.

Xero is also one of the few accounting software providers with an accounting app for both iOS and Android. While Xero’s app isn’t as popular or well-reviewed as QuickBooks’, it still lets users securely send invoices, reconcile bank transactions, and check business finances from any web-enabled device.

The Early plan’s main perks are its price and unlimited-user capacity. Unfortunately, it has a pretty limited scope: you can reconcile only 20 bank transactions, input 5 bills, and send 5 quotes or invoices a month. For most small-business owners, including solopreneurs and freelancers, these low numbers won’t be enough.

Of course, if you really don’t need to send more than five quotes or collect over five bills, the Early plan’s price is a steal. Just make sure you don’t exceed the limit; if you do, you’ll be automatically bumped up to the Growing plan, which is more than twice as expensive. The drastic price jump from $9 to $30 a month means Xero isn’t particularly scalable—another reason we’re more comfortable recommending it to midsize businesses rather than small ones.

The Growing plan is where Xero really starts to pay for itself. On top of unlimited users, you get unlimited invoicing, billing, and bank reconciling capabilities—and since most businesses large enough to value Xero’s collaboration are also large enough to need unlimited features, Growing is a much better fit for Xero’s primary audience.

At $60 per month, Xero’s Established plan doesn’t come cheap, but it does add three crucial features:

• Support for multiple currencies
• Expense tracking
• Project management (time and cost tracking)

With Xero Expenses, which is included free with the Established plan, your scanned receipts sync with the accounting software in real time. You can assign expenses to projects, create more complex reports, and get a more accurate look at how your business is doing financially.

Xero used to have a stand-alone payroll product, but the company has since rolled it back. Now, Xero advertises payroll with Gusto, one of our favorite full-service payroll providers. Gusto plans start at $39 a month (plus an additional $6 a month per payee) and include automatic payroll tax filing. Gusto’s comprehensive payroll is cheaper than QuickBooks’, so if you’re looking to save money, we recommend pairing Xero with Gusto over a QuickBooks Online + QuickBooks Payroll subscription.

Xero’s pricing starts at $9 a month (increasing to $11 a month on July 11, 2020). However, the $9 plan lets you send only five invoices and enter only five bills. The Growing plan ($30 a month) is a better fit for most midsize businesses.

Customers seem to have a positive experience with Xero. On the consumer review site Trustpilot, Xero has nearly 2,000 reviews and an average rating of four out of five stars.3

Xero's customer service comes in a few different forms. For one, the company offers 24/7 customer support via chat. Alternatively, you can search Xero’s help posts and discussion boards about common problems on Xero Central. While you can’t call Xero directly, you can request a phone call from the company, and a customer service agent will call you instead.

Yes. You can search for Xero-trained accountants, bookkeepers, and advisors on Xero’s site.

If you want affordable cloud-based accounting with inventory tracking and expansive collaboration opportunities, Xero is your software. Sure, Xero could use a few improvements—a better mobile app, for one, and expense tracking for its cheaper plans—but with those features at that price, you’ll be hard-pressed to do better than Xero.

Want to compare more accounting software providers before you make the final call? Read our piece comparing QuickBooks and Wave for two more accounting software options.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.