A Tech-savvy CPAs Review of Xero

Overall Satisfaction with Xero

Xero is currently being used for our own firm's accounting, however, we primarily use Xero as a software product to accomplish selling our services to small businesses. Xero is the central piece in the financial systems we set up for our clients. We use a variety of other apps in conjunction with Xero to fit the needs of our clients. Xero solves many problems, the foremost being:

  1. Inaccurate financial reporting
  2. Timely financial reporting
  3. Double entry
  4. Dealing with paper bills/invoices/documents
  5. Too much cost hiring bookkeepers and accountants
  • Integrated Reconciliation - As you categorize transactions they are reconciled at the same time, thus making it a one-step reconciliation process
  • Fully Featured - Xero can do billing, invoicing, simple inventory, fixed assets, reconciliation, financial reporting, and payroll with the features that the majority of small businesses need.
  • Collaboration - Xero allows for collaboration between financial advisors and businesses. Notes can be left on transactions for others to see, financial reports can be published and viewed by other users with footnotes.
  • Accountant Friendly - There are a plethora of features that Xero offers specifically for accountants to do their work faster. Switching between clients, bulk coding and recoding, reporting templates that can be used across clients.
  • A more robust invoicing system. They need to more payment provider add-ons so they can accept payments via ACH, instead of only credit card. They need to add the ability to have automatic recurring payments.
  • A more robust reporting system. They need to add in financial reports with more flexibility on what fields you can add/remove.
  • Payroll. I'd prefer if they had an option to do full-service payroll. They also don't yet support electronic filing and payment in all 50 states. This should be done ASAP.
  • My employee efficiency when compared with similar tasks on QuickBooks has increased by at least 50%. When compared with QuickBooks desktop it was over 100%.
I have written several reviews comparing Quickbooks/Freshbooks/Xero. In many categories they offer very similar features. What sets them apart and will continue to set them apart in the long run is their approach to the market. Quickbooks has a closed ecosystem approach, while Xero is encourages and stimulates add-on partners to build products that connect to their system. This allows for more robust integrations over time and improved automation in their ecosystem of apps. That is the main reason I prefer Xero over Quickbooks.
Secondly, Xero offers many more accounting partner related features for cleaning up books, setting up clients quickly, and making it easy send out reports.
  • Client onboarding is a big deal. Xero has a QuickBooks conversion tool to speed this up and bring in past transactions, but it can be improved.
  • Xero has chart of account templates that can be used across clients very easily.
  • Xero has reporting templates that can be used across clients very easily.
  • The two features above make it really easy to set up industry specific verticals in Xero. The chart of accounts and reporting make up the framework for the accounting and the deliverable to the client.
  • Collaboration with clients is easy. We send links to our clients, they click on them and leave notes right in the system. If there were notifications on this it would be a bit easier.
Do you typically work online with cloud apps? What type of industry are you in and if Xero can't provide all the features, are there add-ons that will work well enough?
Do you prefer to be involved with your finances or just receive a report? Or, what will you be doing with your financial reports? (Typically owners that just want a report won't appreciate all the features that Xero can offer and the collaboration that helps provide timely and insightful financial information.)

Xero works well with almost all service industries. Add-ons can be used to service retail/e-commerce and other inventory/manufacturing companies.

Xero Feature Ratings

Accounts payable
8
Accounts receivable
8
Cash management
5
Bank reconciliation
9
Expense management
9
Fixed asset management
9
Multi-currency support
10
Multi-division support
8
Regulations compliance
10
Self-service portal
10
Inventory tracking
7
Pricing
9
Order entry
9
Credit card processing
7
Cost of goods sold
7
Pay calculation
10
Benefit plan administration
8
Direct deposit files
7
Salary revision and increment management
9
Reimbursement management
8
Dashboards
9
Standard reports
8
Custom reports
7
API for custom integration
10
Plug-ins
10
Role-based user permissions
9
Single sign-on capability
9