Xero is an online accounting system that is an alternative to using QuickBooks or other small business accounting software. It allows a small business to invoice, enter and pay bills, and track their bank balance, among other features. The standard accounting functions of general ledger, accounts receivable, and accounts payable are included in Xero.
You access Xero online, and all your files and the software are stored online. There is no software to install, no upgrades that may cause you trouble and no files to pass pack and forth.
The More, the Merrier
One of our favorite parts of Xero is they allow unlimited users at no additional costs. You’re not penalized for having multiple bookkeepers, multiple employees, or just a lot of friends!
Most other accounting systems charge by the number of users, so this is a huge competitive strategy for Xero. It makes sense when you think about it for an online product, because an increase in the number of users does not necessarily correlate with additional vendor costs.
Beautiful Bank Feeds
The highest payback feature in Xero is the daily bank feeds. Data entry is cut to down dramatically because all of your banking, PayPal, and credit card transactions automatically feed into Xero.
You don’t have to pay your bank a software fee for this either. It’s free. Xero accesses the banking data either directly with your bank or (in the case of most U.S. banks) through a company called Yodlee which provides the feeds.
The bank feed is super simple to set up. All you do is choose your bank name from a drop down list, enter your user ID and password for your online bank account, and that’s it. The transactions are entered automatically. If something goes wrong with your bank or the feed, you can always easily import the transactions via a standard import file.
Is Xero Right for Your Business?
If you’re already on Xero, congratulations. Future articles will include how-to’s and fun features about Xero and its family of add-ons.
If you’re wondering if Xero is right for you, then it’s best to discuss this with an accounting professional that knows your existing software system, your business needs, and the capabilities of Xero. As one of the few Xero Certified Advisors in the U.S., we can help you decide if Xero is right for you.
A few of the types of clients that are perfect for Xero include:
- Clients who need limited accounting features
- Clients in services industries where there is no inventory (Xero has add-on software that does inventory but does not support inventory by itself)
- Clients that wait until tax time and get the entire year caught up in one swoop
- Clients who are unhappy with the software they are currently using
- Clients who are currently using Excel and re-entering everything
- Clients who keep everything in a shoebox
If you fit into one of these categories or are just curious, be sure to reach out and give us a call so we can find out whether Xero is right for your business.