Xero or Nothing?
Updated May 30, 2015
Xero or Nothing?
Score 8 out of 10
Vetted Review
Verified User
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.
Xero Feature Ratings
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
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
- 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.
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
- Self-taught
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
| Pros | Cons |
|---|---|
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
| Pros | Cons |
|---|---|
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
Yes, but I don't use it