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In this Xero review, I share whether Xero really is still the best bookkeeping software for small business owners on the market.
Are you on the hunt for a new bookkeeping software?
You’ve likely come across Xero, a popular accounting and bookkeeping solution designed for small and medium-sized teams.
Xero consistently shines as a leading accounting and bookkeeping solution for small businesses.
But with so many bookkeeping tools available today, does Xero still hold the crown as the ultimate bookkeeping software?
Read more: How To Use Xero?
Quick Summary
- Xero is a popular and user-friendly cloud-based accounting and bookkeeping software available in over 180 countries.
- The platform offers unlimited users on all plans, a full-featured 30-day trial period, and paid plans ranging in price from $15-80 USD monthly.
- Key tools include a user-friendly interface, invoicing and bank reconciliation features, expense and inventory management, and 1000+ integrations.
- Xero is one of the best bookkeeping software for small-medium-sized growing teams looking for an accessible and easy-to-use platform to manage their finances.
- Check out this in-depth video guide on how to use Xero for small businesses here.
Xero Review 2025
I aim to take a deep dive into everything Xero offers, from its features to pricing, ease of use, integrations, and more.
By the end of this article, you should be able to determine whether Xero can help you manage your business finances effectively.
It’s important to note that both small businesses and accountants/bookkeepers can use Xero.
However, for this Xero review article, I’ll be focusing on using Xero for small business use only.
So, with that said, does Xero live up to the hype? And is Xero the best bookkeeping software for your small business?
Let’s jump in to find out now.
Read more: How Much Does a Bookkeeper Cost For Small Business?
What Is Xero?
Xero is a cloud-based accounting software designed for small to medium-sized businesses.
It offers a comprehensive suite of tools to help business owners track their expenses, income, invoices, and financial operations more efficiently.
Launched in 2006 in New Zealand, Xero has since grown into a globally recognized accounting product, now offering its impressive tools in over 180 countries!
Some of Xero’s powerful features include online invoicing, payroll processing, an intuitive mobile app, inventory management, expense tracking, and bank reconciliation.
With a wide range of integrations, powerful automation features, and a user-friendly interface, it’s no surprise that Xero continues to dominate the accounting world.
Read more: 5 Best Xero Alternatives For Small Business.
How To Use Xero?
To get your small business up and running with Xero, follow the simple steps below:
- Go to Xero.com and follow the prompts to sign up for Xero’s free 30-day trial.
- Add your business name, industry, and financial year start date.
- Set up your chart of accounts and add your opening balances and tax rates.
- Connect your bank account.
- Customize Xero’s invoice template.
- Create and send invoices to your clients.
- Add your bills and schedule them for payment.
- Set up, run, and process payroll for any employees you have.
- Reconcile bank transactions (payments received and expenses incurred).
- Generate reports such as P&L statements, balance sheets, and cash flow statements.
- Connect your account to third-party apps like eCommerce, payroll, and inventory tools to enhance functionality.
- Use the Xero mobile app to manage financial tasks on the go.
By following these steps, you can utilize Xero to its full potential and improve your business’s financial management
Ease Of Use
Xero is celebrated for its exceptional ease of use, and I have to say, I certainly agree!
The platform’s intuitive, sleek, and minimalistic design ensures that even beginners who’ve never used accounting software can navigate around with minimal difficulty.
From a seamless onboarding process to a straightforward dashboard that provides an instant overview of your financial health, Xero is designed with user-friendliness in mind.
But that’s not all! Xero’s ease of use also extends to its extensive feature set.
From customizable invoice templates, easy bank connections, and simple reporting functions, Xero aims to reduce the complexities associated with financial management.
Plus, the intuitive mobile app allows you to easily send invoices, reconcile transactions, follow up on payments, and more from wherever you are!
Read more: 6 Best Accounting Software For Self Employed.
Pricing
Xero’s pricing plans are as follows (November 2024):
- Early: $15 USD monthly: Best for new businesses or individuals. Includes 20 invoices and 5 monthly bills, bank transaction reconciling, and receipt capturing.
- Growing: $47 USD monthly: Ideal for growing small teams. Includes unlimited invoicing, quotes, bills, and bulk reconcile transactions.
- Established: $80 USD monthly: Suited for larger, more established teams. Includes all Xero features like multiple currency support, project tracking, expense claims, and analytics.
It’s important to note that Xero’s pricing plans may differ depending on your location.
Check out my article here that breaks down all of Xero’s pricing plans and current discounts
For an in-depth guide on how to use Xero, check out this video tutorial
Xero Key Features
Payments And Invoicing
Xero’s handy invoicing feature allows you to easily make, preview, and then send invoices to your clients in just a few clicks.
You can add your logo and set up recurring invoices and automatic payment reminders to streamline the entire invoice and payment process.
And thanks to Xero’s free invoice template, you can create and customize your invoice in just a few minutes and then save the template for future use.
Although customizing invoices within Xero is possible, Xero’s customization options are limited compared to other platforms like FreshBooks.
However, Xero’s intuitive interface simplifies converting quotes to invoices and includes an easy-to-use drag-and-drop line for easy item reordering.
Plus, I like how you can attach documents or photos of completed work to your invoices.
Upon receiving the invoice, customers can conveniently make immediate payments with their credit card, debit card, or direct debit using the ‘pay now’ button.
And thanks to Xero’s impressive app marketplace, your Xero account can integrate with and accept payments from popular payment options like Stripe, PayPal, and Square.
Read more: Top 5 Bookkeeping Spreadsheets For Small Business.
Bank Reconciliation
Did you know that Xero connects with over 21,000 financial institutions worldwide?
This means that your business bank will likely integrate with Xero! And even if it doesn’t, the good news is that you can still use Xero by importing a PDF statement.
Some of Xero’s dynamic bank reconciliation features include auto-matching and customizable bank rules based on specific transaction conditions.
And when these tools encounter categorization challenges, Xero’s smart learning system draws on past transactions to accurately tag new ones (pending your approval).
Xero also supports bulk reconciling (on their higher-paid plans) to streamline your reconciling processes further.
Plus, you can reconcile from the Xero mobile app when you’re on the go–how impressive is that??
I honestly believe that Xero’s bank reconciliation capabilities are some of the easiest (yet most advanced) in the business!
Read more: How To Export Customers In Xero?
Expense Tracking And Management
With Xero, tracking and managing your expenses is a breeze.
All you need to do is upload a photo of the receipt from your phone, and Xero will categorize the expense and create an expense claim through the mobile app.
This handy feature is inclusive across all pricing tiers and can help streamline the entire expense tracking process.
And if you’ve forgotten to add an expense, simply click the ‘quick add’ feature to add it manually!
Additionally, you can record your mileage using the map feature within the mobile app and set up alerts for when your team makes a claim so you can approve it right away.
Xero’s expense tracking capabilities give you immediate insights into your financial spending and can assist with pinpointing potential areas where you can reduce costs.
Read more: What Is The Best Bookkeeping Template For Small Business?
Inventory Management
Xero’s inventory management feature essentially helps you stay on track with how much stock you have in real time.
The inventory management feature works hand in hand with Xero’s invoicing systems, meaning you can easily add your inventory items to purchase orders and invoices.
This makes it a breeze to send out invoices and keep tabs on what’s selling!
Moreover, you can run inventory reports for specific sales trends, quantities, profitability, and more.
Additionally, Xero’s ‘Inventory Plus’ add-on allows you to view your top-selling products and fulfill orders through third-party eCommerce sites like Shopify or Amazon.
Read more: Best Inventory Software For Small Business.
Project Management
Did you know that Established plan users can use Xero as an efficient project management tool?
Thanks to the built-in project and time-tracking feature, you can monitor the time taken to complete a task and then directly bill that task to a specific project.
This functionality is beneficial for teams looking to assess the value of time, tasks, expenses, and profit margins.
As mentioned, this feature is only available on Enterprise paid plans.
If you’re looking for a project management software (and don’t want to pay for Xero’s top-tier plan), I suggest checking out our list of the best free project management software.
These project management tools provide many similar tools at little to no cost!
Reports
Beyond its billing and invoicing functions, Xero also has a suite of customizable financial and accounting reports.
You can run balance sheets, profit and loss statements, cash flows, and more, then share these reports with your team to assist with future planning and improvements.
One of my favorite reporting tools exclusive to Xero is its ability to generate a ‘report package.’
This feature combines various reports like balance sheets, P&L statements, and top-customer charts into one document, complete with a cover page and table of contents.
Although Xero provides a range of reports, it’s worth mentioning that other Xero alternatives, such as QuickBooks, offer a more extensive range of pre-built reports.
However, Xero’s reporting capabilities give you a straightforward comparison of your budgets versus actual figures, offering solid insights into your finances at any moment.
Read more: How To Use QuickBooks?
Integrations
Whether you want to extend the functionality of Xero or streamline and your connect data, Xero’s impressive App Store (with over 1000 apps) has you covered.
Among its standout integrations are various payment processing platforms and payroll systems, making it easier for you to handle transactions and payroll directly within Xero.
Payment gateways such as Stripe and PayPal can be connected to Xero, allowing for efficient invoice payments and financial tracking.
On the payroll front, Xero’s direct integration with Gusto offers a streamlined solution for payroll processing, tax calculations, and employee financial management.
These integrations enable businesses to centralize their financial operations, improving accuracy and saving valuable time.
Customer Support
Xero offers helpful articles and resources through an impressive free online support resource called Xero Central, which is available 24/7.
Simply access Xero Central through the question mark icon on your dashboard, then type the topic you need help with in the search bar.
A range of Xero Central articles relevant to your topic will then appear!
What about more in-depth support? Guidance articles are available, and any further questions can be addressed by clicking ‘Contact Xero support’ at the end of any article.
This will initiate email communication with a Xero support team member.
While the platform doesn’t have a direct phone number, those who want phone assistance can request a callback by submitting their details and phone number to Xero.
This support ticket approach differs from competitors, like QuickBooks, which offers direct phone call support.
What I Like:
- All plans come with an unlimited number of users.
- Over 1,000 integrations are available.
- Every plan comes with the ability to track inventory.
- An assisted setup process is provided.
- The interface is straightforward, sleek, and beginner-friendly.
What I Dislike:
- You can’t directly call customer service.
- Project tracking and expense claim features are only available on the Established plan.
- The customization options are limited compared to other Xero alternatives.
Is Xero The Best Bookkeeping Software For You?
If you’re a small business needing easy-to-use accounting software with robust features for managing payments, expenses, invoices, and more, you’ll likely love Xero!
Xero is particularly beneficial for small and growing businesses requiring a cloud-based solution that’s accessible from any internet-connected device.
Xero’s vast integration options with over 1,000 apps also make it a versatile choice for businesses looking to streamline their finances.
However, if you’re looking for a bookkeeping solution with affordable project tracking or multicurrency features, Xero may not be your best choice.
This is because these features are only available on the highest-paid plan, which costs $80 per month!
Additionally, businesses needing instant phone support from customer service may struggle with Xero’s one-way phone support approach.
The good news is that there are plenty of Xero alternatives out there! Check out my top 5 best Xero alternatives for small business here.
Stews Final Thoughts
And that brings this Xero review article to a close!
So, with all that said and done, is Xero the best bookkeeping software for you? The answer is…maybe!
In my opinion, Xero is still one of the best accounting and bookkeeping solutions for small businesses.
In saying that, it doesn’t necessarily mean it’s the best choice for you and your business!
I recommend giving the Xero 30-day trial a go for yourself. Only then will you know if Xero is the best bookkeeping solution for you.
Thanks so much for reading this Xero review!
