Item: Xero
Rating: 9
Author: Blake Oliver

Use Cases and Deployment Scope

We're using Xero for accounting for over 90% of our clients. It is a full double entry general ledger accounting product, so it does just about everything we need from a GL perspective. As a platform, Xero integrates with hundreds of add-ons, allowing us to customize a suite of apps to improve business processes for our clients.

Pros and Cons

Catch-up bookkeeping, AKA "write-up". Xero makes it really easy to import bank statements from Excel files, then reconcile those transactions quickly, even for multiple years of data. This is a huge benefit for our bookkeepers.
Collaborative accounting. Xero is easy to learn and use for non accountants. This allows us to divide work between our client accounting services department and our clients, which increases efficiency, lowers the cost, and improves visibility for our clients.
Integrations. Xero integrates really well with hundreds of third party apps and tools. You can even write your own integration.

Xero's mobile apps are a good start, but could use more functionality, such as being able to access reports or run payroll. The good news is that the web app itself works on iPad, so you can log in through Safari and get what you need. Still, other accounting apps are ahead of Xero in this department.
Payroll is limited (as of May 2015) to a handful of states and is rolling out to more gradually. Scroll to the bottom of this page to see where payroll is available: https://www.xero.com/us/accounting-software/payroll/
Customizable reports. Xero is rolling out a new reporting engine which offers greater flexibility, but it is not yet complete. Make sure that the reports available in Xero will meet your needs.

Return on Investment

Demand for Xero trained accountants and bookkeepers has been key to our growth. Our business was started on Xero and has benefited greatly from interest in Xero from customers dissatisfied with QuickBooks.
The practice management tools provided by Xero make it easy to delegate and restrict access to client files to only the staff who need to have access. This increases efficiency and security.
Xero's support for accounting firms is great. We have a dedicated account rep who can step in and get problems solved for us very quickly.

Alternatives Considered

QuickBooks Online,QuickBooks Premier,QuickBooks for Mac,QuickBooks Pro,QuickBooks Enterprise Solutions,LessAccounting,Accounting by Wave

Xero is the superior product from both a design and engineering perspective. While there are specific features unique to each solution that may make one product a better fit for a particular company, Xero wins overall. It has practice management tools [which are] completely missing in QuickBooks Online and other online accounting platforms.

Xero Rating for Public Practice CPAs

Ease of using Xero is key to building a collaborative client accounting experience. Xero has the right balance of features and ease of use to make it work in the new world of online accounting.

Percentage of clients doing full Business Process Outsourcing

76% to 99% of clients

Likelihood to Recommend

For the vast majority of our clients, Xero is the best option. It handles all their needs for a price that includes unlimited users. They know exactly what it will cost and it is easy for us to support them using Xero's Practice Manager tools. For some clients, it is not the best option. For example, there's no job costing built in to Xero. Whether or not the client is using job costing in their existing accounting system is one of the first questions I ask when assessing if they are a good fit to switch to Xero. There are add-ons that can do this, but using an add-on is not always ideal.

We built our accounting firm on Xero--best in class SMB accounting software

Overall Satisfaction with Xero