Xero Accounting: 5 Things to Know

This cloud-based accounting software supports unlimited users on all of its subscription plans.

Kurt WoockFeb 2, 2021
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Xero is cloud-based accounting software that allows small-business owners to manage their finances and collaborate with their accountant or bookkeeper from anywhere. Founded in 2006, it's now a widely used accounting application with more than 2 million subscribers.

The New Zealand-based company stands out from the competition by allowing subscribers to add unlimited users to their accounts on any subscription tier. With plans for businesses with only a few transactions per month as well as those with around 100 employees, it can also easily grow with your business, unlike some applications limited to smaller operations. Xero also connects to and shares data with more than 800 small-business apps, like PayPal for processing payments and Gusto for administering payroll and benefits.

Here's what to know.


Cloud-based accounting software that allows unlimited users on all its subscription tiers.

1. All Xero subscriptions come with unlimited users

With Xero, you can add an unlimited number of users to your account at each subscription level. This is a notable feature for accounting software; often, lower-tier plans on such applications allow fewer users and only higher-tier plans allow unlimited users. Here are the other features included in Xero's three different subscriptions levels:

  • Up to 20 invoices and quotes.

  • Up to five bill entries.

  • Automated bill and receipt capture with Hubdoc.

  • Reconcile bank transactions.

  • Inventory management.

  • Accept payments.

  • Reporting.

  • Purchase orders.

  • All the features of Early.

  • Unlimited invoices, quotes and bill entries.

  • All the features of Growing.

  • Works with multiple currencies.

  • Project tracking.

  • Claim expenses.

Promotional discounts may apply.

When adding additional users, the account owner can also set permission levels for each one. For example, you can give all employees the ability to send quotes and invoices, allow some to pay bills and limit who can see the company’s complete financial picture. To keep things organized, Xero logs every action users make and compiles the history at the bottom of every transaction.

2. The application can generate several types of financial reports

Xero helps transform the data you enter into useful, actionable information at every subscription level. A dashboard shows long-term trends, including the average number of days customers take to pay you and year-over-year income and expenses, while another page dedicated to cash flow provides a shorter-term outlook, charting out how unpaid bills and outstanding invoices can affect your bank balance over the next week.

You can also create more than 100 different types of financial reports, including budgets, balance sheets and income statements. Reports are customizable, with adjustable formatting and the option to add your own formulas and groupings. For instance, you can drag and drop certain expense categories into a single subgroup; an “office expenses” subgroup could include office equipment, supplies and utilities.

3. Live support isn't available

Some accounting applications offer live support via phone or in-app chat box. Xero doesn't, which is a significant drawback for some. You might have to spend more time looking for answers in the central library of articles, webinars and videos, or browsing the company's active user forum.

If you can't find an answer there, you can submit an online ticket and Xero will route your question to a subject matter expert who will respond within 24 hours. While the assistance isn't instant, Xero’s offices around the globe mean that people are working 24/7 and support requests are often answered after just a few hours, according to the company.

4. Several time-saving tools come included

The lifecycle of any transaction can contain dozens of steps. Xero’s automated processes and design features can shave time off each one. For example:

  • You can provide job quotes to potential customers online or in a PDF through Xero. If you send an online quote, you can update it or add notes and customers see the changes in real time, eliminating the need to navigate multiple versions of quotes.

  • You can turn a quote into an invoice and also update your inventory with a click. If customers pay in installments, the online invoice updates the new balance in real time.

  • You can send payment reminders to customers automatically if they don’t pay you after a set period of time.

  • When reconciling books, Xero suggests likely matches between accounting entries and financial transactions. For example, if you have an entry for an invoice of $1,000 and a recent $1,000 deposit in your bank account, it might suggest matching these two transactions. Push the "OK" icon between the two to verify the match is correct.

5. Multiple currencies are supported, but only on the most expensive plan

If you need accounting software that supports multiple currencies, Xero's more-affordable plans won't do the job. You'll have to go with the Established plan, the highest-tier subscription, instead.

But if you need that functionality, it could be worth the cost. The company updates exchange rates for 180 currencies every hour and captures how fluctuating exchange rates impact your bottom line by calculating unrealized and realized gains daily. If a rise or drop takes place between the time you billed a customer and the time they pay, you’ll know about it.

Bookkeeping and accounting software

$15 per month and up.

$4.99 per month and up.

$25 per month and up.

$47.25 per month and up.

Free (add-ons available).

$11 per month and up.

$15 per month and up.