Xero Review: Pros, Cons, Features & Pricing
Looking at Xero from every angle, this review covers the features, trade-offs, and types of businesses that can get the most value from the platform.
We review tools independently, and commissions help fund our testing. See our transparency policy, our methodology, or suggest a tool.
Xero is a cloud-based accounting software for small and mid-sized businesses that need to manage invoicing, bank reconciliation, expense tracking, and financial reporting in one system. I'd especially consider it over QuickBooks Online if your team is growing—Xero includes unlimited users on every plan, while QuickBooks charges per seat, making Xero the more cost-predictable option as headcount scales.
Xero Evaluation Summary
4.4/5
- From $25/month
- 30-day free trial
Why Trust Our Software Recommendations
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Years
Our team has been testing and reviewing software since 2012. As finance leaders ourselves, we know how difficult—and important—it is to choose the right software.
For this guide, we evaluated tools using hands-on testing and independent research, scoring tools using our selection criteria.
Our reviews reflect our human editorial judgment, not a sales pitch.
Xero Overview
Xero simplifies your accounting tasks with its user-friendly interface and robust features, making it a top choice for small business owners.
Pros
- Xero's intuitive interface makes managing finances easy for you and your team.
- Its robust reporting tools give you clear insights into your business's financial health.
- Automatic bank feeds save you time by reducing manual data entry.
Cons
- Invoice and report customization options are restrictive.
- Some users report occasional lag in customer support response times.
- Advanced features may require additional training for effective use.
Is Xero Right For Your Needs?
Who Would be a Good Fit for Xero?
Small businesses, freelancers, and retail shops are a great match for Xero. Its user-friendly interface and strong reporting tools make it easy for you to manage finances without a dedicated finance team. If you’re in retail, Xero’s automatic bank feeds and inventory tracking can save you time and reduce errors. Freelancers will appreciate the invoicing features that streamline billing. Xero’s capabilities help you stay organized and informed, making it a smart choice for those who want to simplify their accounting processes.
- Small BusinessesXero’s intuitive interface and reporting tools make managing finances straightforward for your small team.
- FreelancersYou’ll love the invoicing features that simplify billing and help you get paid faster.
- Retail ShopsAutomatic bank feeds and inventory tracking save you time and reduce manual errors.
- ConsultantsXero’s expense tracking and project management features keep your client work organized.
- NonprofitsIts budgeting tools and reporting capabilities help you manage funds and demonstrate accountability.
- StartupsXero’s scalability and comprehensive financial insights support your growth and decision-making.
Who Would be a Bad Fit for Xero?
Large enterprises or complex manufacturing businesses might not find Xero suitable. Its features may lack the depth required for intricate financial management or large-scale operations. If your work involves complex supply chain logistics or vast data integration, Xero’s capabilities might fall short. Additionally, businesses needing highly customized financial solutions or advanced multi-currency handling could face limitations. Xero’s strengths lie in simplicity and ease, which might not align with the sophisticated needs of big corporations or industries requiring extensive customization.
- Large EnterprisesXero might not handle the complexity and scale of your large operations and diverse financial needs.
- Manufacturing IndustriesIts features may lack the depth you need for managing intricate supply chain logistics.
- International CorporationsWhile Xero handles multi-currency transactions, more advanced multi-currency handling isn’t Xero’s strong suit, posing challenges for your global operations.
- Highly Customized NeedsIf your business requires extensive customization, Xero’s standardized offerings might not suffice.
- Complex Financial StructuresXero’s simplicity might not support the intricate financial management your business demands.
- Data-Intensive CompaniesHandling vast data integration could be challenging with Xero’s capabilities.
How We Test & Score Tools
We’ve spent years building, refining, and improving our software testing and scoring system. The rubric is designed to capture the nuances of software selection and what makes a tool effective, focusing on critical aspects of the decision-making process.
Below, you can see exactly how our testing and scoring works across seven criteria. It allows us to provide an unbiased evaluation of the software based on core functionality, standout features, ease of use, onboarding, customer support, integrations, customer reviews, and value for money.
Core Functionality (25% of final scoring)
The starting point of our evaluation is always the core functionality of the tool. Does it have the basic features and functions that a user would expect to see? Are any of those core features locked to higher-tiered pricing plans? At its core, we expect a tool to stand up against the baseline capabilities of its competitors.
Standout Features (25% of final scoring)
Next, we evaluate uncommon standout features that go above and beyond the core functionality typically found in tools of its kind. A high score reflects specialized or unique features that make the product faster, more efficient, or offer additional value to the user.
We also evaluate how easy it is to integrate with other tools typically found in the tech stack to expand the functionality and utility of the software. Tools offering plentiful native integrations, 3rd party connections, and API access to build custom integrations score best.
Ease of Use (10% of final scoring)
We consider how quick and easy it is to execute the tasks defined in the core functionality using the tool. High scoring software is well designed, intuitive to use, offers mobile apps, provides templates, and makes relatively complex tasks seem simple.
Onboarding (10% of final scoring)
We know how important rapid team adoption is for a new platform, so we evaluate how easy it is to learn and use a tool with minimal training. We evaluate how quickly a team member can get set up and start using the tool with no experience. High scoring solutions indicate little or no support is required.
Customer Support (10% of final scoring)
We review how quick and easy it is to get unstuck and find help by phone, live chat, or knowledge base. Tools and companies that provide real-time support score best, while chatbots score worst.
Customer Reviews (10% of final scoring)
Beyond our own testing and evaluation, we consider the net promoter score from current and past customers. We review their likelihood, given the option, to choose the tool again for the core functionality. A high scoring software reflects a high net promoter score from current or past customers.
Value for Money (10% of final scoring)
Lastly, in consideration of all the other criteria, we review the average price of entry level plans against the core features and consider the value of the other evaluation criteria. Software that delivers more, for less, will score higher.
Core Features
Invoicing
Xero lets you create and send professional invoices quickly. You can track payments in real time, helping you manage cash flow efficiently.
Bank Reconciliation
Automatically import and categorize your bank transactions. It saves you time and reduces errors by matching transactions with your records.
Expense Tracking
Capture and track expenses effortlessly with Xero's mobile app. This keeps your financial records organized and up-to-date.
Financial Reporting
Generate detailed financial reports with ease. It provides insights into your business's performance, aiding better decision-making.
Payroll Management
Process payroll smoothly and comply with tax requirements. You can handle employee payments and deductions without hassle.
Inventory Management
Keep track of stock levels and manage inventory efficiently. This feature helps you avoid overstocking and stockouts, optimizing your inventory.
Ease of Use
Xero’s user-friendly interface makes it a breeze for you and your team to navigate. Its intuitive design minimizes the learning curve, allowing you to quickly access core features like invoicing and expense tracking. Users appreciate how easy it is to manage finances without getting bogged down in complex menus. Automatic bank feeds and simple reconciliation processes enhance efficiency, letting you focus on what matters most—growing your business.
Integrations
Integrations include Hubdoc, Stripe, Syft, Xero Inventory Plus, Shopify, Xero Practice Manager, HubSpot CRM, Xero Analytics Plus, Xero Workpapers, Gusto, PayPal, and Square.
Xero Specs
- 2-Factor Authentication: Yes
- Accounts Payable: Yes
- Accounts Receivable: Yes
- API: Yes
- Balance Sheet: Yes
- Billing/Invoicing: Yes
- BitCoin: Yes
- Budgeting: Yes
- Calendar Management: Yes
- Contact Management: Yes
- CRM Integration: Yes
- Customer Management: Yes
- Dashboard: Yes
- Data Export: Yes
- Data Import: Yes
- Data Visualization: Yes
- Expense Tracking: Yes
- External Integrations: Yes
- Forecasting: Yes
- General Account Ledger: Yes
- Inventory Tracking: Yes
- Multi-Currency: Yes
- Multi-User: Yes
- Notifications: Yes
- P&L: Yes
- PayPal: Yes
- Payroll: Yes
- SAP Integration: Yes
- Stripe: Yes
- Supplier Management: Yes
- Tax Management: Yes
