Home Business Software Xero Review & Analysis – Is the Accounting Software Worth It?
Krishi Chowdhary Journalist Author expertise
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Our in-depth Xero review evaluates a well-known online accounting software boasting over 3 million subscribers worldwide. Xero’s easy-to-use invoicing and bank reconciliation features have made it one of the most sought-after cloud accounting platforms.

However, with so many accounting solutions available, is Xero the answer to all your accounting woes? It’s perfect for small businesses, but finding a platform with all the features you need at a price you can afford can be challenging. Read this comprehensive review, where we’ll dive deeper into the nitty gritty of Xero.

We’ll discuss its features in detail, analyze its ease of use, highlight what real-world customers are saying, and compare it with some of its top competitors to find out if it is worth your money.

Xero Books Pros and Cons

Let’s quickly look at some of the strengths and weaknesses of this nifty cloud accounting tool.


  • Easy to use and set up
  • Allows unlimited users on every plan
  • Manage projects and track time
  • Competitively priced plans starting at $29/month
  • Build invoices and approve them instantly
  • Solid mobile app to record transactions on the go


  • Allows only 20 invoices on the basic plan
  • The expense claim feature is only available in the highest pricing plan

What is Xero?

Xero is a popular cloud-based accounting software for small businesses that helps you manage your books of accounts from anywhere in the world.

This New Zealand-based business was founded in 2006 and was previously called Accounting 2.0.

Rod Drury and Hamish Edwards started the company with the aim of simplifying accounting for small businesses, and that’s what they have done for the past 18 years. Today, Xero has 3.95 million subscribers in over 180 countries. And don’t forget, 90% of all businesses in OECD countries are small businesses.

Over 3.95 million users use Xero

Xero believes that small businesses are more sensitive to changes in their cash flow and balance sheets. This makes it crucial for them to monitor financial variations and performance in real time.

To solve this problem, Xero introduced remote online accounting solutions and tools like final accounts production and management reporting.

With Xero, you can manage client invoices, get paid instantly, track and pay bills, connect your bank account for easy reconciliation, and even track time and projects in real time.

Is Xero’s Software Any Good?

Xero is one of the best cloud accounting software out there, especially for small businesses. What makes it so suitable is its ease of use – there’s almost no learning curve, and every option on the platform is self-explanatory.

Xero lets you add invoices, mail them to clients, and keep track of payments. You can also easily manage all your expenses and bills.

Xero comes with pre-built charts of accounts so that you can begin classifying your transactions immediately. You can customize these charts according to your business’s demands.

The dashboard is clean, with all the information available at a glance. Plus, Xero’s customer support team is responsive and ensures that your issues and queries are solved as soon as possible.

That said, if streamlining your workflows is a priority, Zoho Books may be a better option since it lets you create quick automation rules with several triggers and actions. Similarly, Xero may not offer all the advanced reporting features you need if you’re a large organization.

Key Xero Features

Now, let’s look at some of Xero’s standout features and how your business can benefit from them.

Invoicing and Payments

Xero makes invoicing and payment collection easy. You can quickly create an invoice online – simply fill in your customer details, date, and description. Xero also allows you to add your own branding.

Xero invoicing

You can attach documents to your invoice. For example, if you’re billing your client based on hours worked, you can attach your time report along with the invoice.

Xero also lets you add a ‘Pay Now’ button to your invoices, enabling clients to make payments directly. Xero’s integrations with Stripe and GoCardless allow you to accept credit cards and direct payments.

The platform comes with automated invoice reminders. You can select when to send an email reminder to the client. For example, when the invoice is 7 days overdue, 14 days overdue, or 21 days overdue.

Bank Reconciliations

Once your bank data flows into Xero, matching transactions is straightforward. You can do it daily to get a real-time view of your cash flows.

We found the platform’s automatic reconciliation suggestions a useful feature. With this, you only have to ‘Accept’ the suggestion to match transactions.

Xero bank reconciliation

You can set up multiple feeds from around 3,500 banks, including American Express, Citibank, and JP Morgan Chase.

If you have Xero’s Standard or Premium plan, you can even group similar transactions and reconcile them simultaneously.

Inventory Management

Xero helps you keep track of your inventory, allowing you to track more than 4,000 items at a time. You can check the quantity of any item in real time and the value of the total inventory in your store.

Xero inventory management

Xero also allows you to save regular inventory items with details like price and size. You can then quickly add saved items to invoices and quotes by simply typing their names – you don’t need to enter the details every time.

What caught our eye was Xero’s accurate inventory management reports. At a glance, you can see which items sell the most and which ones the least.

The reports also tell you your most and least profitable items, enabling you to set accurate reorder levels and make pricing decisions.

Expense Management

Submitting, approving, and managing expense claims is a cakewalk with Xero. Xero’s mobile app, Xero Me, allows you to submit claims on the go as and when they happen. You simply need to take a photo of the receipt, and all the details will be auto-populated.

Xero expense management

You can even track and submit mileage claims with the app. It captures information like distance, cost, description, and the amount spent and pulls it into a claim.

Once you set the start location and destination on the map, Xero Me automatically calculates your mileage.

Xero also makes admin work easy. As soon as a claim is submitted, managers receive a notification. They can then quickly review and approve expenses on the go, which helps employees get reimbursed faster.

This expense data is stored in meaningful reports, which show real-time expense trends. A quick view of expense charts shows you where you’re over budget and helps you make decisions accordingly.

Project Tracking

Xero also doubles as a project management tool, thanks to its Xero Projects modules. Click ‘New Project’ and pick ‘Draft’ to build a new project. Simply select the contact (client) for the project, give the project a name, and set a deadline.

Xero project tracking

You can then add individual tasks within the project with the estimated time and hourly rate. Xero accounting software also allows you to add expense estimations to a project.

Once done, you can send this as a quote to your client. We also found handy options to deselect parts of the quote you do not want the client to see.

Xero automatically calculates the time taken. You can use this recorded time to send invoices to clients.

Now that your project is live, you can start tracking the time for each project task. You can either enter the time as a duration or the start and end time for the task.

We liked Xero’s easy-to-understand interface. At the top of each project page, you can see crucial data such as estimated cost, invoiced amount, total invoiced and uninvoiced time and expenses, and the number of days left until project completion.

Xero Analytics

Xero offers an up-to-date dashboard with a complete overview of your financial performance. Not only can you view your short-term cash flows, but Xero can also predict future cash flows for up to 30 days.

Xero Analytics

You can learn which invoices are most urgent and the impact of each invoice and bill on your accounts.

We loved Xero’s Business Snapshot feature, which shows you different financial metrics in a visual representation. This includes expense trends, operating costs, overall profitability, and cash balances. This makes it easy to compare business performance with last year, month, or quarter.

Xero Integrations

Xero has a dedicated app store featuring all the third-party apps you can connect with the platform. Some popular ones include PayPal, Stripe, HubSpot, Timely, Mayday, and Deel.

You can either filter the apps by function (for example, accounting or HR) or the industry you’re working in to find the one you’re looking for..

Xero integrations

These integrations help you convert Xero into a central hub, build easy workflows, and connect every part of your business. This way, you don’t have to jump from one app to another looking for the same information.

For example, if you connect an HR platform like Deel with Xero, every payment made to your employees will automatically be recorded in your books. Similarly, you can integrate various time-tracking software to record times on various ongoing projects.

Xero Cost and Pricing

Xero offers three plans, Starter, Standard, and Premium, all of which have monthly and annual subscription options. There’s also a 30-day free trial, so you can test the platform without risking a single penny.

Purchasing a Xero plan involves three easy steps: just provide your business’s details, choose a plan, and then make the payment.

If you’re ever dissatisfied with Xero’s service, cancelling a subscription requires a one-month notice period. During this, you’ll still have access to your account.

We recommend you regularly back up and export your data to a different system during the notice period so you don’t lose valuable data just because your subscription has ended.

Note that each Xero plan allows you to add unlimited users at no extra cost. This is something you do not get with other accounting platforms. Let’s now look at what each Xero accounting package offers.

Xero pricing

Starter Plan

This is Xero’s first paid plan. It’s priced at $29/month and offers lots of useful accounting features. These include the ability to send 20 invoices, enter as many as five bills, and reconcile bank transactions.

Also, you can collect W-9 forms, track their status, and prepare and file 1099s.

Xero accounting software is the most affordable of our top-rated providers, so it is great for small businesses and solopreneurs with a tight budget. However, you may want to consider Freshbooks if you’re a larger business.

Freshbooks costs less (starting at $5.70/month), plus it offers more advanced features, such as allowing you to build unlimited estimates and invoices.

However, you do not get bank reconciliations, so that’s a compromise you will have to make.

Standard Plan

Xero’s Standard plan costs $46/month and has three additional features than the Starter plan.

Instead of only 20 invoices and five bills, you can manage unlimited invoices and bills. You can also reconcile your bank statements and accounts in bulk.

You still can’t track projects and time, though, nor can you claim and approve expenses or use multiple currencies for accounting.

Premium Plan

Xero’s Premium plan ($62/month) comes with everything Xero has to offer. Here, you can record international transactions in your local currency and view how changes in exchange rates affect your cash flow.

Plus, you can track costs, manage the project’s budget, and track jobs based on their location or via a time tracker.

You can also access Analytics Plus. This feature uses AI predictions to help you plan up to three months in advance, including scenario planning and deeper insights.

Xero’s Established plan is ideal for mid-sized and large businesses.

You can also track and claim expenses, upload receipts, and get them approved faster, improving your cash flow.

In comparison, Zoho’s equivalent plan (Standard) costs $15/month. While it’s cheaper, it lacks many features in Xero’s Established plan, such as expense tracking and timesheets.

To get these you have to upgrade to Zoho’s Professional plan at $40/month, almost on par with what Xero costs.

Note that with each Xero plan, you have the option of buying Xero’s payroll module integration with Gusto, making it one of the best accounting and payroll software. Where other platforms offer different HR integrations, none have an exclusive partnership with Gusto.

Xero Ease of Use – How Good Is the Interface?

We found the Xero dashboard simple and easy to understand. The blue-themed Xero interface is non-cluttered, with all the information you need in one place.

The dashboard shows you various details, such as:

  • Total cash in and out
  • Bills you need to pay
  • Invoices owed to you
  • Your business bank account with pending reconciliation items
  • An account watchlist showing a summary of all components like expenses, inventory, and sales

Xero dashboard

This gives accountants a snapshot view of what’s going on with the finances. Adding new contacts, bills, and invoices is also straightforward. You just need to click the ‘Plus’ button at the top of the dashboard. T

In our experience, Xero is beginner-friendly, allowing even novices to accounting software to be up and running within minutes.

You don’t have to read different help or how-to articles to learn how to use all the elements on Xero.

Xero accounting software also offers a handy mobile app, which makes on-the-go accounting a breeze. The mobile app allows you to access all the information available on the desktop/web app, add invoices and bills, approve claims, and even pull various reports, no matter where you are.

Despite this, if you feel stuck, head to Xero’s website, where you’ll find a library of support articles. They are neatly categorized into various sections, so help is never more than a minute away.

Xero vs Top Accounting Software

We have curated a table highlighting the key differences between Xero and some of the top players in the industry so that you can make a quick yet informative decision about which platform to choose.

Best Accounting Software Best For Starting Price (/month) Free Trial Standout Features
Xero Small-team accounting needs $29 30 days Bulk bank reconciliations
Invoices and bill creation
Quick expense tracking and claim approval
Freshbooks Freelancers and solopreneurs $5.70 30 days Unlimited estimates and invoices
Online credit card and ACH payments
Automated bank import
NetSuite Large enterprises and businesses Custom pricing 14 days Data visibility and reporting
Accounting automation
Trends forecast
Zoho Accounting Growing businesses $15.00 A free forever plan A/P and A/R modules
Customer portal
Cash flow forecasting report

As you can see, the Xero accounting system offers great value for money. Although it may not have many advanced features, it comes with all the accounting capabilities a small business can ask for. From invoicing and tracking expenses to generating meaningful reports, there’s a lot you can do with Xero.

Our comparison table allows you to gauge your priorities and choose the best accounting software accordingly.

For instance, if you’re a large organization, Xero might not be a perfect fit, and you might have to look towards NetSuite, which has features geared towards businesses with more complex accounting needs.

Similarly, if you’re a rapidly growing business, you might want to go with a more scalable solution like Zoho Books.

Xero Reviews – What Are People Saying?

Now that you have a good idea of how powerful Xero can be for small businesses, let’s look at what other users have to say about this cloud accounting software.

Popular review site G2 contains many positive Xero accounting software reviews, with an overall rating of 4.3 out of 5 stars from 600+ reviews. Here’s a user review that sums up many of Xero’s major strengths.

Xero customer review mentioning its strengths

Almost all reviewers commented on how easy Xero is to use. You can quickly create invoices and bills, and Xero takes care of the backend accounting.

Many users also appreciated Xero’s ability to help businesses get paid faster with professional invoices and bank reconciliations.

Xero customer review appreciating its ability to improve cash flow

Similarly, users on TrustRadius, another popular review site, rated Xero 8.5 stars out of 10, speaking volumes about its popularity.

As many as 98% of reviewers believe it delivers good value for the price, and 96% of users say they would continue using it. That is also because Xero has a quick customer support team that can resolve any issues you may run into.

Xero customer review on Trustpilot

However, a minor issue is that Xero only supports bank and credit card reconciliations, not other balance sheet accounts. However, Xero acknowledged this limitation and provided an alternative to the client.

Xero customer review on G2

All in all, Xero is an excellent value product that delivers the goods it promises. It is easy to set up and can be used by even an accounting novice, which makes it a great choice for businesses with non-complex accounting needs.

Why You Can Trust Our Xero Review

Our experts have more than a decade of experience testing accounting and employer-of-record software. Plus, our detailed testing process includes first-hand analysis of the tool we’re reviewing.

Since we also review the best desktop accounting software and best cloud-based accounting software, we know the ins and outs of these systems and which features to look for so you don’t fall for the marketing blurbs.

We evaluated every Xero feature to help us gauge if the platform delivers the value it claims to.

To make sure our Xero review is accurate and reliable, we also compared the platform with some of the best accounting software out there to determine its best offerings and any downsides.

That’s not all, though. We scoured numerous customer reviews on various reputable platforms, checking what other users thought about the platform. This helps us give a more balanced opinion so that you don’t have to take just our word for it.

How to Use Xero: Setup Guide

Let’s look into how to start using Xero.

1. Setting Up your Xero Account

Here’s how to purchase a Xero plan and set up your account.

Step 1: Visit the pricing page and click ‘Buy Now.’ Then provide details like your full name, email address, and phone number.

Signing Up for a Xero account

Step 2: Click ‘Confirmation’ when you’re done. You’ll receive an email requiring you to confirm your account and set a password.

Confirm your Xero account

Step 3: Enter your business details, such as its name, industry, and whether you have any employees.

Add business details on Xero

Step 4: Select the plan you want to buy, along with add-ons, if any. Read our section on Xero’s cost and pricing for a breakdown of what each plan offers.

Choose your Xero add-ons

Step 5: Head over to the payment page. Note that credit and debit cards are the only payment options.

Make payment to buy Xero

2. Adding Contacts

Contacts form the foundation of accounting in Xero. They are supplier and customer accounts that appear in your books. Here’s how you can add a contact in Xero.

Step 1: Click the ‘Contacts’ tab from the top of your dashboard. Then, choose ‘All Contacts’ and click ‘New Contact.’ A contact can either be a supplier, customer, or employee.

Xero Contacts

Step 2: Enter your business’s name as well as the name and email address of your entity’s primary person. You can even add additional people if you want.

Enter contact details on Xero

Step 3: Click the ‘Sales Default’ option to select the default account as ‘Sales’ (if you’re creating a customer contact, for example). Set a default due date, discounts, and credit limits. However, setting defaults is an optional step.

Xero Customer Sales Default

Step 4: Click ‘Save and Close’ when you’re done.

3. Creating an Invoice

Let’s get cracking with creating an invoice.

Step 1: Click the ‘+’ symbol at the top of your Xero dashboard and then select ‘Invoice.’

Creating an invoice on Xero

Step 2: Enter the customer name in the ‘To’ box, then the item, quantity, and price.

Enter invoice details on Xero

Step 3: Choose the account you want your invoice coded to, for example, Sales. You can also add a tax rate and a region if needed.

Choose your account type in Xero

Step 4: Preview the invoice and click ‘Approve & email’ once you’re sure everything is correct.

4. Adding an Inventory Item

Here’s how to maintain a list of all the products you offer and monitor inventory levels in real time.

Step 1: Click ‘Accounts’ at the top of your dashboard, select ‘Inventory,’ and then ‘Add item.’

Adding inventory on Xero

Step 2: Enter details like the item code and name in the dialog box that opens. Select whether you purchase or sell this item (or both) and enter the unit price, which account the inventory belongs to (cost of goods sold or sales), tax rate, and description.

Add inventory details on Xero

Step 3: Check the ‘I track this item’ box to live-track the product. On doing so, Xero will not let you record a sale transaction if the quantity is zero.

Step 4: Click ‘Save’ once you’re done.

Xero Review Verdict

Xero is one of the best small business accounting software, with a lot of key and easy-to-use accounting features. You can create and track invoices, build client quotes, track time, reconcile your bank accounts, and approve expenses.

We like the Xero Me mobile app, which gives you all the functionalities of Xero’s desktop version, allowing you to work on the go.

The reason it’s so popular among businesses is its ease of use and setup, including an almost non-existent learning curve. The built-in chart of accounts ensures you can start recording transactions right away.

However, certain essential features such as expense tracking and project management are available only on the highest plan, which may be expensive for some small businesses.

That said, the best part is that you can get started with Xero for a reasonable $29/month, and a 30-day free trial means you can try the service risk-free before committing.


Is Xero software any good?

Is Xero accounting worth it?

Is there anything better than Xero?

Which software is better QuickBooks or Xero?


Krishi Chowdhary Journalist

Krishi Chowdhary Journalist

Krishi is an eager Tech Journalist and content writer for both B2B and B2C, with a focus on making the process of purchasing software easier for businesses and enhancing their online presence and SEO. Krishi has a special skill set in writing about technology news, creating educational content on customer relationship management (CRM) software, and recommending project management tools that can help small businesses increase their revenue. Alongside his writing and blogging work, Krishi's other hobbies include studying the financial markets and cricket.

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