Xero was established in 2006 as web-based accounting software to provide accounting solutions to a small business pursuing growth. It links businesses with their reliable advisors and offers a real-time financial position and report of the business instantly. The best part about Xero is that it can be accessed from anywhere and anytime as long as you have a device that can access the web. The vigorous accounting system by Xero allows users to view their transactions, cash flows, and account details from anywhere. It helps you to stay on top of bills with its online bill pay feature. It also features automated import and coding of all bank transactions. All these features enable you to maintain a healthy relationship with your vendors.
You can also manage your personal expenses with the mobile review and approval of a receipt. It offers limitless integration and user support with various systems such as ADP, Bill.com, and Vend. Xero comes with a free trial of 30 days in which you can test and evaluate the software. Moreover, Xero has connections with financial service partners and banks going past the 200 marks around the globe. Xero also features a free API that enables users to integrate the software with third-party software. Xero supports integration with 700+ third-party apps worldwide, and over 50,000 users are making use of Xero’s API developer tools.
In the year 2011, Xero launched its Xero touch mobile app for Android and iOS. This enabled users to generate invoices from anywhere anytime with the help of their smart devices. The cloud accounting software also features multiple tax rates and currencies. However, as much as there good things about Xero, there also exist the bad and the ugly. Let’s have a look at each one of them separately.
Access from Anywhere, Anytime
One of the greatest advantages of Xero accounting is that you can access it anywhere, anytime. Since the software is cloud-based, it enables you to work from wherever you are and whenever you want. It gets you out of the limits of a single PC access compared to desktop accounting software. Xero can be easily accessed from any of your smart device that is connected to the internet and supports the web. All you need is a Xero package and good internet connection to work on the go with Xero. It automatically updates any information you change for all the users due to its cloud feature.
Another good thing about Xero is that it is generous in the configuration sense. It allows you to edit all the purchase files in a matter of seconds. Xero also features templates for users who prefer to skip the drafting part for individual ones. If you don’t feel like making one on your own, just open one of the templates and check/uncheck all the relevant data fields that you require, and you will be good to go.
Another good thing to love about Xero transactions is how it minimizes fraud. The multiple-approval model and two-factor authentication make sure that no fraud is being committed with you. There is a detailed list of actions performed with all the users, manual notes, and dates. When it comes to sales, this method makes it possible to categorize invoices as awaiting approval, delayed, awaiting payment or drafted as well as control purchase orders.
Automated Daily Bank Feeds
Another good thing that users absolutely love about Xero is that it allows users to link their bank accounts with Xero. The advantage of this link is that it enables you to set up a bank feed. All your bank statements are automatically updated to this bank feed in Xero. There are daily bank feeds which mean that you can immediately track sales invoices which match the payments made against purchases. As a result, you save a lot of time doing bookkeeping.
An overview of your business’s current financial health
Have you ever wanted a quick and efficient financial feedback for your company? This is where Xero wins the game. One of the greatest advantages of Xero is financial reporting. It provides an overview of all your activities in summary. It also enables you to fill in filters, so you only see what you desire. Even a standard report can be cooked according to your needs.
Standard reports such as cash flow records, income statements, balance sheets are all available in Xero. But Xero also provides additional analysis. Some reports in the system are highly specific such as expenses per contacts, tackling sales per item, aged payables, etc. Xero also allows you to filter imperative transactions, draft invoicing histories for different clients, etc.
Collaboration Made Easy
Xero has also made collaboration the easiest thing ever. With everything on the cloud, all the required information is at your disposal at all times. Consequently, collaboration becomes nothing more than a cinch. It can be done anywhere, whether at home, office or on the go.
Cloud Software is Always Updating
Other major advantages of Xero cloud accounting software are regular updates and improvements. The providers can easily provide push updates which they rightfully do so to accommodate customers. This gives Xero an upper hand from all other desktop accounting software. You don’t have to pay for an upgraded version. All the updates happen over the cloud and are quick and free of cost. Xero also refers to customer feedback and releases its update in accordance with the voice of the customers. As a result, all customer requirements are catered to.
One of the best features that Xero offers its customers is its integration with third-party apps. The integration works like a charm as long as there are no issues with it. However, if, by any chance, an issue occurs, it is a hassle to get out of. One of the most common issues for Xero is a broken connection with the third-party app. Most people usually find themselves completely blank if it happens. If you find yourself in such a situation, then know that the communication between Xero and the integrated app has been broken. This usually takes place due to two reasons:
- You accidentally revoked the connection within Xero
- Reauthorization of the connection is required by Xero for some unknown reason. There is no way to avoid either case and, in both cases, you will find yourself struggling to solve the issue. It takes a lot of time and effort to solve such an issue, and it varies from app to app.
Integrating with a third-party app sound all good. But it is only good as long as it is done correctly. Like the broken connection issues, if you don’t do the integration correctly, you will find yourself in a jumble of problems. It will become extremely hard to point out the root of the problem and waste so much of your time. Moreover, you would most probably have to hire a professional accountant to solve the issue, which will cost you a hefty amount. What’s worse is that not all accountants have the understanding of Xero and so finding the right accountant is an added issue.
Incorrectly configured auto-posting
Auto-posting is a great feature that Xero offers, but it comes with its drawbacks too. If you incorrectly configure auto-posting, then get yourself prepared for a nightmare of problems and issues. Most of these issues take a lot of time and effort to figure out. What’s worse is that you probably won’t find most of the errors which add to the headache. Even in this situation, the need for a professional who understands the cloud accounting software becomes dire.
One more bad thing about Xero is the cost factor in terms of the packages it offers. In comparison, Xero will cost you far more than any other cloud accounting software. It sure has its perks, but software like Sage 50 and QuickBooks do the job quite well too and that too at lower prices. For instance, with QuickBooks, you will be spending on average £180-£200 for a three to four years subscription. On the other hand, Xero will cost you around £25 monthly, which is way more than QuickBooks.
Segregation of duties
As much as Xero is praised by businesses for all the good stuff, there is an ugly side to it too. This ugly side of Xero is reflected in the lack of Segregation of duties. Xero does not provide users with this feature. One user goes about complaining:
“This is such a basic feature that I can’t imagine any Enterprise software would ship without it, BUT it seems I can only give my junior accountants all or nothing access to the system. I can’t restrict their roles to Payables or Receivables (they are much more wide-ranging than that).
Ideally, I want everything they do including postings and changes- to be saved as a draft, so I can review it. Currently, I have nothing to assure me that they haven’t gone around editing past transactions to try and make mistakes go away.
This is so basic. I have clients I recommend Xero to, but this is a real deal-breaker if it’s not there.”
Lacking this feature is a major drawback that you cannot restrict employees from accessing everything on your Xero account. They will know about all of your transactions and have access to all your financial records. Moreover, there is no feature in Xero that allows you to go through the edits that other people do. So, you can’t avoid any mistakes at the hands of others.
Lack of customer support call
Xero has become a pretty big name in the finance and accounting world over time. However, being so famous, Xero still lacks a customer support call number. It is really disliked by customers. Anyone can have a problem with the accounting software. To solve it, they have to contact customer support through chat and then wait for their response. This slow customer support can cause further issues. Having a customer support number to receive and solve issues overcall is important for any company to have. Users are simply disappointed in Xero due to this.
Not suitable for big business
Xero does offer amazing features, but these features are only suitable for small businesses. Most of its features lag behind when big businesses are processing big transactions. Moreover, the lack of Segregation of duties might work for small businesses, but with big businesses, it can be devastating. Big businesses often find themselves struggling with Xero, and there have been many complaints out there, but Xero has not responded to any of them and continues to stick to its current system.
With all the automation of entry, links to banks, simplified invoice generation, on the go service, Xero has won the hearts of customers throughout the world. It has revolutionized the accounting and finance world by making time-consuming tasks, time-efficient. Businesses now use the same time doing other productive work moving towards success. However, all of these great features are compensated by the bad and ugly things about Xero. Any broken connection or incorrect configuration leads to a good amount of time and money wasted. It can further impact the overall image of the business. The lack of Segregation of duties feature in the modern world gives the impression that there is still a traditional touch to the software. The cost factor also puts it at a lower level.
It is very important to have continued professional help and support throughout the time your business is making use of Xero. Only qualified and efficient Xero accountants should be hired so that you can have a smooth journey with the software. Hiring someone unfamiliar with Xero is not better than doing it yourself.