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Xero

Streamline small business accounting, invoicing, payroll, expense tracking, and financial reporting.

Xero Overview

Updated August 11, 2025

Xero is a cloud-based accounting software designed for small and medium-sized businesses. It simplifies financial management with tools for invoicing, payroll, expense tracking, bank reconciliation, and real-time financial reporting.

Xero’s user-friendly interface enables business owners to manage cash flow, track expenses, and collaborate with accountants seamlessly. With integrations for various apps, it enhances efficiency, automates tasks, and provides insights to support informed business decisions.

Key Features

Intuitive Dashboard: Provides a customizable overview of financial metrics like bank balances, outstanding invoices, upcoming bills, and cash flow snapshots for real-time insights.
Invoicing and Accounts Receivable: Create and send professional, customizable invoices, set automated payment reminders, accept online payments (e.g., via Stripe, PayPal), and track payment status to manage cash flow efficiently.
Bills and Accounts Payable: Track and schedule supplier payments, manage bills, and monitor accounts payable to maintain clear visibility of cash outflow.
Bank Reconciliation: Automatically imports bank transactions from over 21,000 global institutions, suggests matches, and flags discrepancies to streamline accurate record-keeping.
Hubdoc Data Capture: Automatically pulls bills, receipts, and documents into Xero, simplifying data entry and organizing financial records for easy access.
Multi-Currency Support: Handles transactions in over 160 currencies with automatic exchange rate updates, ideal for businesses with international operations (available in Established plan).
Payroll Management: Automates pay calculations, taxes, and compliance (region-specific, e.g., UK, Australia), allowing employee leave requests and timesheet submissions (addon in some regions).
Inventory Management: Tracks stock levels, populates invoices and orders with items, and updates inventory in real-time to streamline operations.
Contact Management: Centralizes customer and supplier details, showing sales, invoices, and payment histories in one place for better relationship management.
Analytics and Reporting: Offers customizable reports, cash flow forecasting, and financial health metrics, with Analytics Plus for advanced insights.
Fixed Asset Management: Tracks and manages fixed assets, integrating with accounting processes to ensure accurate depreciation and book updates.
Expense Management: Allows submission and reimbursement of expense claims, streamlining spending tracking and approvals.
Online File Storage: Securely stores and shares documents like contracts, bills, and receipts, accessible from anywhere.
Mobile App: Enables on-the-go management of invoices, expenses, and financials via smartphone, boosting productivity.
App Integrations: Connects with third-party apps (e.g., CRM, payment gateways) via the Xero App
Store to enhance functionality and workflows.
Automated Sales Tax: Integrates with tools like Avalara to calculate and report sales tax on invoices, ensuring compliance.
Xero Central Support: Provides access to customer support, online courses, and resources for easy implementation and learning.

Price

Early: Basic accounting, up to 20 invoices, 5 bills, bank reconciliation, receipt capture.
Growing: Unlimited invoices/bills, bank transactions, quotes, advanced accounting features.
Established: All Growing features, multi-currency, advanced reporting, project/expense tracking.

Pricing details: https://www.xero.com/us/pricing-plans/

Pros

Competitor	Pros of Xero
QuickBooks Online	Xero offers a cost-effective alternative to QuickBooks Online, with plans starting at $20/month compared to QuickBooks’ $30-$200/month, providing similar core accounting features like double-entry accounting, bank reconciliation, and invoicing at a lower price point. Its unlimited user seats across all plans are a significant advantage for larger teams, unlike QuickBooks, which charges per user. Xero’s inventory and fixed asset management are robust, and its App Store integrations (e.g., Gusto for payroll) enhance functionality, often matching or exceeding QuickBooks’ offerings. Xero’s customizable dashboard and analytical reports, like Business Snapshot, provide unique insights not always available in QuickBooks, making it ideal for businesses prioritizing affordability and team collaboration.
FreshBooks	Xero excels over FreshBooks for businesses needing comprehensive accounting, as it supports double-entry accounting, which FreshBooks’ Lite plan lacks, ensuring greater accuracy. Xero’s unlimited invoicing and billing in higher tiers suit growing businesses, while FreshBooks’ plans become costlier with additional users ($19-$60/month vs. Xero’s $20-$80/month). Xero’s inventory management and multi-currency support (in the Established plan) cater to complex needs, unlike FreshBooks, which focuses on simpler, service-based businesses with strong time-tracking features. Xero’s cloud-based system and extensive app integrations provide scalability, making it a better fit for businesses beyond freelancing or small-scale operations.
Zoho Books	Xero stands out against Zoho Books with its unlimited user access across all plans, a significant advantage for teams, as Zoho Books limits users in lower tiers ($15-$60/month). Xero’s pricing ($20-$80/month) is competitive, and its intuitive dashboard customization is highly rated (90% positive reviews for dashboard features). Xero’s robust fixed asset management and project accounting features surpass Zoho Books’ offerings for businesses with complex asset needs. Its seamless bank reconciliation with over 21,000 bank connections ensures accuracy, and the Xero App Store provides broader integration options, enhancing functionality for diverse business types.
Wave	Xero provides more advanced features than Wave, which offers a free plan but lacks double-entry accounting in its basic offering, making Xero’s ledger accuracy superior. Xero’s plans ($20-$80/month) include unlimited invoicing and billing, unlike Wave’s free plan, which has limitations and requires add-ons for payroll ($16-$40/month). Xero’s inventory management, multi-currency support, and fixed asset tracking make it better suited for complex businesses. Its 4.4/5 rating from 3,100 reviews highlights strong user satisfaction, and its cloud-based system with Hubdoc for receipt capture streamlines data entry, offering more robust automation than Wave’s simpler setup.

Cons

Competitor	Cons of Xero
QuickBooks Online	Compared to QuickBooks Online, Xero falls short in customer support, offering only email-based assistance without guaranteed response times, while QuickBooks provides live phone and chat support. Xero’s mobile app lacks advanced features like receiving payments or generating reports, limiting its utility for on-the-go users, whereas QuickBooks’ app is more comprehensive. QuickBooks’ automatic sales tax calculation based on customer addresses is a feature Xero doesn’t offer natively, requiring third-party integrations like Avalara. Some users report issues with Xero’s forex translations and limited invoice customization, areas where QuickBooks excels with more flexible invoicing options and a larger network of ProAdvisors for support.
FreshBooks	Xero’s interface, while user-friendly, can feel less intuitive for non-accountants compared to FreshBooks, which is designed for users without accounting experience, offering simpler setup and navigation. Xero’s customer support is limited to email, unlike FreshBooks’ live support options, which are more responsive for small businesses. FreshBooks’ mobile app allows direct client communication and recurring billing setup, features absent in Xero’s app. Xero’s Early plan restricts users to 20 invoices and 5 bills, potentially forcing small businesses to upgrade sooner than with FreshBooks’ more flexible entry-level plans ($19-$60/month).
Zoho Books	Xero’s mobile app is less functional than Zoho Books’, which excels in mobile accounting with features like report viewing, expense assignment, and time tracking, all absent in Xero’s app (46% negative reviews for Xero’s mobile access). Zoho Books offers live phone and chat support across all plans, while Xero’s email-only support can be harder to access, with users struggling to find the support portal. Xero’s inventory management is less robust for multi-location stock tracking compared to Zoho Books’ capabilities, even without Zoho Inventory integration. Xero’s pricing ($20-$80/month) can also feel restrictive for smaller businesses compared to Zoho Books’ flexible six-plan structure ($15-$60/month).
Wave	Xero’s pricing ($20-$80/month) can be a drawback for freelancers or very small businesses compared to Wave’s free plan, which includes basic accounting and true double-entry accounting for no cost, though with add-on fees for payroll ($16-$40/month). Xero’s payment management has issues, with 50% of 173 reviews citing delayed transaction updates and refund difficulties, whereas Wave offers smoother payment processing. Xero’s lack of built-in receipt capture (requiring Hubdoc) is a disadvantage compared to Wave’s integrated receipt scanning. Some users find Xero’s interface less visually engaging than Wave’s, impacting the experience for new users.

Customers' Reviews From Reliable Websites

PCMag Review
Reddit Review
Connecteam Review
Trustpilot Review
Capterra Review