Xero or Nothing?
Updated May 30, 2015

Xero or Nothing?

Claudio S Barbosa | TrustRadius Reviewer
Score 8 out of 10
Vetted Review
Verified User
Review Source

Software Version

Version 2

Modules Used

  • All
  • Overall my experience is pretty good. The only thing that is frustrating is that I can not create "classes" to capture detailed data for each location. It would have been nice to have the option of being able to have "consolidating and consolidated" financials. As it is, I have to create multiple applications and consolidate manually in an Excel spreadsheet. Or maybe it has been solved already?

Overall Satisfaction with Xero

We used Xero as our general ledger and financial reporting system. We used it to invoice customers and pay vendors and to a certain extent manage our cash. We use it to extend our actuals reporting to financial forecasting and create "what if scenarios" to estimate what the burn rate is going to be. We use Xero for employee expense claims reporting.
  • Multi currency - this is very important function for companies that transacts business in various denominations and locations.
  • Bank Recs - Reconciliation (bank accounts) are done on a daily basis so your accounts are refreshed every day - as oppose to once a month (after you receive your bank statements). In QB, there are so many additional steps to balance your bank account on a daily basis if you are managing cash and trying to figure out what payments have not cleared.
  • Financial Reporting - reporting is pretty good that you can determine the layout of your financials - so you can format it based on how you track your KPIs - cost per acquisition (customer), recurring revenue,etc.
  • Classes - allowing "classes" so that a company can track financials in various companies or locations.
  • Sales Tax Reporting - creating reports that presents sales before sale taxes and after taxes as well as reporting by state/city tax rates. There is an Income by Contact report but that is not sufficient for reconciling sales taxes payable by city and by state.
  • Expense Claim - being able to set up the tax rates such that when employees submit their expenses with sales tax included in it, the sales tax rates are not available for selection as it usually ends up in the sales taxes payable (system treats it as a sales taxes payable).
  • Bank Feeds - some bank feeds are not available. For example, Chase Credit Card transactions have to be manually uploaded as Xero is still developing interface? For a small company, this may be a hardship as most purchases are not on a PO basis or vendors are not willing to do terms.
  • Good T&E functionality - one less manual Excel process that is subject to manual errors. Eliminates double work.
  • Role based access - allows unlimited number of users to access the application and view what they have been assigned access to (not all or nothing)
  • Good reporting - reports can be customized (accounts group) somewhat.
  • Online customer support is pretty good (not being able to speak to some directly can be tough when you need answers immediately).
  • QBO
Xero is an improvement over QBO (see my comments above). For a small company with very little budget for accounting software, it is an adequate tool and even handles multi-currency. QBO does not handle multi-currency which may be a difficult subject to understand for non-accountants. The T&E functionality (expense claims) is built within the application so it makes for a far more efficient process (review and approval - coding, etc). Unlimited number of employees can be added as users and can have role based access. For a service company, this is very important.
The key questions to ask during the selection process are: how seamlessly the application integrates with banks and other third party systems, how flexible is the reporting functionality, how flexible is the chart of account, can the bill/vendor/supplier payment process be automated (considering that the customer/client process can be automated), is there T&E functionality (so there is no need to use a third party vendor), is there forecasting/budgeting functionality (i.e. for comparative reporting, can forecast be uploaded so they can be analyzed), etc.

Xero Feature Ratings

Accounts payable
8
Accounts receivable
8
Cash management
8
Bank reconciliation
9
Expense management
8
Time tracking
Not Rated
Fixed asset management
8
Multi-currency support
10
Multi-division support
8
Regulations compliance
8
Electronic tax filing
8
Self-service portal
8
Inventory tracking
Not Rated
Automatic reordering
Not Rated
Location management
Not Rated
Manufacturing module
Not Rated
Pricing
Not Rated
Order entry
Not Rated
Credit card processing
Not Rated
Cost of goods sold
Not Rated
Pay calculation
Not Rated
Benefit plan administration
Not Rated
Direct deposit files
Not Rated
Salary revision and increment management
Not Rated
Reimbursement management
Not Rated
Dashboards
8
Standard reports
8
Custom reports
8
Not Rated
API for custom integration
Not Rated
Plug-ins
Not Rated
Role-based user permissions
8
Single sign-on capability
8

Using Xero

30 - We have over 30 users in Xero. The Accounting and Finance team is the primary user, the CEO and COO are the secondary users and the rest of the employees use XERO to enter their expense reimbursements. Select employees have view access to certain reports and are able to approve invoices from vendors and send out invoices to customers.
1 - Someone who is a CPA and has had prior experience managing the accounting function hands on is ideal. Obviously, you can not just pick up the phone and call XERO to ask for help so someone who is resourceful and able to figure out the solution on his own will be important as well so in the end the only support required will be "validation" from Xero support that the chosen course of action is the correct one. In effect, you use XERO for confirmation process.
  • Financial reporting - actuals
  • Cash Management
  • Expense Reporting
  • Budgeting and Forecasting
No classes functionality.

Evaluating Xero and Competitors

Yes - QBO - we replaced it because it does not allow for multi-currency transaction and also there is no T&E (expense claims) functionality.
  • Product Features
  • Product Usability
  • Product Reputation
The most important feature we looked for is how innovative and how current is the software (for example, is it cloud based, how frequent do they change/update features, functionality)?
If I have more time, I will talk to more software vendors.

Xero Implementation

I think the most important thing in any implementation is to have a good understanding of the company where you are implementing the software - their business model and how they want to track/monitor/control their numbers. How do they define gross margin, EBITDA for example. What are the key numbers that are interested in measuring as part of their KPIs, etc. These are important because the design of the application should mirror these important management metrics. The reporting (end result) must be useful for doing pro-forma and what if scenarios in Excel, etc.
  • Implemented in-house
I implemented Xero at my current company. I selected it over QBO and other software. Overall I am pleased with the software. There has been a lot of improvements since I first used the software 2 years ago at another company (where I also implemented it). There are some things that Xero can improve on such as the Pay Bills (by connecting to our bank account, similar to an ACH) functionality, increase tracking categories from a maximum of two, adding sub-account functionality to the chart of accounts, etc.
Yes - The implementation was broken into "steps".
1. Historical
financials - because the company never had a formal system prior to
XERO, I have to establish what the prior year balances were. In effect,
making an creating an income statement and a balance sheet from scratch
from which I will get the OPENING balances for certain accounts.

2.
Chart of Accounts - from #1 above, I built the beginnings of a Chart of
Account which will be used going forward. The COA will be adjusted,
updated and or new accounts will be added as I learn more about the
specifics of the business and the business model (for example, a SaaS company).

3. Uploading data - once the COA is completed, I can start loading the data and linking bank accounts and credit cards.

4.
Reporting - created monthly financial reports based on the COA and that
pulls the transactions that were uploaded. There is some room to
adjust/re-group the accounts to a more meaningful order within Xero financial reporting.
Change management was a small part of the implementation and was well-handled - Because the company where I implemented it is a start up company, change management was primarily limited to the founders. I believe there is this perception that setting up an accounting system is a 5 minute job when in fact, it is more involving than that as you are "reconstructing" events and transactions from bank accounts, legal documents, conversations, etc.
  • Data migration
  • Chart of accounts limitations
  • Financial reporting function limitations
  • Budgeting/Forecasting limitations - not one size fits all.

Xero Training

Product was pretty easy to learn without training. What is important is the basic understanding of accounting close cycle (textbook) plus experience in a real business setting where the tool is being used. It is easier than QBO in terms of user friendliness in navigation. There are certain things/functions that may be improved.

Xero Support

There is no a real live person that you can speak to. All support is via email and you are not sure when it is answered.
ProsCons
Quick Resolution
Good followup
Knowledgeable team
Problems get solved
Kept well informed
Immediate help available
Support cares about my success
Quick Initial Response
Escalation required
Need to explain problems multiple times
No - I think that XERO should know all the issues that needs to be resolved given the amount of data/inquiries that they get. They can create a customer help documentation that is "searchable" etc.
When the functionality is not available, Xero immediately tells me that it is not yet included in the product road map.

Using Xero

There are still a number of functionalities that Xero needs to build and integrate into their system to make it fully usable - data feeds, reporting, category creation, budgeting and forecasting, etc.
ProsCons
Like to use
Relatively simple
Easy to use
Technical support not required
Well integrated
Consistent
Quick to learn
Convenient
Feel confident using
Familiar
None
  • Bank reconciliation
  • Financial reporting
  • Sales Tax Reporting
  • Limited "class" or sub-category functionality
  • Data feeds from certain banks or credit card companies are not available

Xero Reliability

I have yet to fully stress test the product given the size of the company where I am using it. I am sure as we scale to more customers, more vendors and more reporting requirements, I will have a better understanding of what it is capable of in terms of bandwidth and processing.
If by overall availability, it means being available via a web browser and on mobile devices. I have not used the application on mobile device so I am not sure what it can and can not do.
The product is pretty stable in performance. However, sometimes the links to bank feeds are not available which can be frustrating if you need to update the application for important transactions. I currently have to manually upload credit card transactions so that is not ideal and makes for manual errors or duplication.