Under Review: Xero Accounting Software

When I log into Xero every morning, it is hard to imagine that only 18 months ago, I was running the company finances on a network of Excel spreadsheets that could only really be understood by me and my accountant (and then only with my detailed interpretation). I’m not a finance specialist, and, at the time when I started using Xero, I had no accounting training, which made this software the ideal choice for my small communications consultancy.

Xero is a cloud-based solution that has been developed with the owner-manager in mind. It simplifies book-keeping and accounting as much as these administrative processes can be simplified. It doesn’t quite take the whole financial management function off your hands (if only), but it does make everything from invoicing to debt collection easier.

Log in to Xero and on your dashboard you can view:
Bank accounts: you can import a bank feed any of 70 UK banks (or financial organisations). And if Xero doesn’t work with your bank, you can ask them to integrate and they will get straight on it. The reconciliation works very well, although I have had a problem setting up automatic feeds for our Barclays credit card statement (Xero has been very professional in dealing with this).

Invoicing: The invoicing function is fantastic. It makes creating and sending invoices a breeze. You simply add your contacts, create an invoice template and raise invoices (Xero can automatically generate an invoice number and you can email them straight from within the system, so no saving and naming files). These are immediately added to accounts receivable so you know when to chase.

Accounts payable (Xero calls this ‘Money Going Out’ so there’s no confusion): enter your receipts into the accounts payable section and you can automatically reconcile them with payments from the bank account. I have an intern handling the data entry for me and then I only need to spend five minutes every second day on reconciliation.

Accounts receivable (aka ‘Money Coming In’): provides a simple list of your invoices that can be ordered according to due date, paid, client, date issued or invoice number. This makes handling any bookkeeping queries quick and easy.

Reports: On the reports tab, you can run reports covering everything from P&L to balance sheet, cash summary and aged receivables. I tend to leave this to my accountant, and I instead focus on ensuring the data in Xero has been entered correctly. However, my accountant has her own log in and can do everything from the VAT return to the management accounts from within the system.

I’ve never actually measured it, but I believe that my accounting bill (which is based on the accountant’s hourly rate) has fallen substantially because Xero has streamlined the whole process. Of course, it wasn’t like this at first, and we had to develop a working relationship that ensured everything went smoothly. This requires discipline on our part, to ensure that we are consistent and accurate in updating Xero.

To familiarise myself with the software I attended one of Xero’s very comprehensive introductory webinars, and that was enough for me to understand how to use the software to improve my ability to manage the finances of the business.

Perhaps the best thing about Xero is their approach to customer service. There is no helpline, which really annoyed me at first, but then I tried the email support function and it won me over. The customer services team is responsive and comprehensive in its approach, and this has been consistent in email and social media communication. They genuinely want you to get the most out of the software and are very good at delivering that.

This is a company that is genuinely interested in delivering a service that makes small business accounting easier and quicker. They are constantly on the lookout for feedback and I have been nothing short of impressed.

Xero offers pricing plans to suit a number of organisations, starting at $19 a month.

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  • Marion Thomson

    Xero makes it very easy to keep your finances completely up to date. You really need to try it out to believe it. I highly recommend it to any small business owner.

  • Quartz

    We started using Xero in August last year. It is a fantastic product and the reporting suite is better than others we saw. A very cost effective solution for us

  • Seán O’Rourke

    Xero is great, add-ons like Receipt Bank make adding purchases invoices a dream. In fact there are hundreds of add on cloud applications that integrate with Xero to help your particular business needs.

  • Linda

    Xero may be good for single entities but the lack of balance sheet reconciliation functionality renders it useless if you process inter entity loan transactions.
    Also hate that you can only have one company open at a time.

  • Ruth Noel-Samaroo

    Xero is MUST for me and I always share the benefits it can give to my clients. Its definitely a useful software application for me as an accountant