We used Xero in its unlimited trial version where we were able to try all its key features. The free trial version offers up to 180 days usage with 50 bank statement lines and 5 new invoices; fees will be however enforced when you fill in your company details (the trial version offers only a sample company with pre-defined parameters). For commercial use Xero is available in three packages: Small, Medium and Large.
All packages include unlimited number of users, unlimited customer support, access from anywhere, and automatic backups. Payment can be performed by credit card or common bank payment order (even over the XERO user interface) and the subscription can be cancelled at any time. The prices of packages are final, there are no additional fees for application setup or upgrade.
Small package is available for USD 19 per month. This package includes five receivable and five payable invoice accounts per month and up to twenty reconciled bank statement lines per month. Xero recommends this package for freelancers and small property investors. The medium package costs USD 29 per month and includes unlimited invoicing and unlimited bank reconciliation. This package is recommended for small and middle sized businesses. The large package costs USD 39 per month, offers the same functions as medium (unlimited invoicing and bank reconciliation), and adds multi-currency billing. This package is recommended for businesses which operate internationally, and perform international transactions, or have bank accounts in foreign currency.
Registration process is very simple. In the first step we have been asked for the first name, last name, e-mail address, phone number, our business location and which accounting system are we currently using. The second, more important step is setting up your company. It is possible to create more companies and enjoy 25% discount. This is useful namely for specialized accounting companies which provide accounting services for others. In the trial version it is possible to use only the predefined model of the company with pre-configured bank accounts, invoices and historical data. It is usable for Xero features explorations, but not for real usage.
Look&Feel and Application Description
The company setting process includes eight steps. In the first step we must enter the information about our company like displayed name (system identification of company in Xero), trading name, organization type (we can choose from charity, club/society, company, partnership, person, sole trader or trust), address, telephone, fax mobile and DDI. In the second step we set up the primary currency, end of the financial year in our company and tax information like tax id number, tax basis (it is possible to set cash or accruals basis), tax id display name, tax period (1 month, 2 months, 3 months, 6 months or annually), and our time zone. In the third step we can change the design of our invoices. We can import our logo, change titles on invoice, select page size or select which components we want on the invoice (tax number, column headings, unit price and quantity, payment advice cut-away, taxes, address and logo). In the fourth step it is possible to add access rights to other users to access our organization’s data. The trial version and large package offers also the fifth step where we add other currencies with automatic periodical updates of exchange rates (this service is provided by XE.com). In the next step we can enter charged tax rates. Each tax rate has its display name and tax components with particular tax rates. The total tax rate is updated immediately after we add each of the component. In the seventh step it is possible to set up accounts. In Xero it is possible to use predefined chart of accounts, or alternatively we can define our own chart of accounts. In the last step we can import accounts balances (balance sheet) as they were at the end of the first month of the year.
Immediately after setting up our company we can start using Xero accounting and financial management functions. The user interface is sober, pragmatic and painted in colors of Xero.
First it displays the Dashboard page containing general information of our bank accounts balances. Xero is able to connect automatically to our bank, download account statements or performed transactions and provide information about our actual cash balance. On the Dashboard page there are two diagrams with incoming and outgoing money volumes. We are able to add here also receivable or payable invoices. These operations affect the look of these diagrams.
On the second tab called Accounts we can access detailed information about bank accounts, receivable and payable accounts, expense claims and fixed assets. This tab provides payment order function to our business partners. It is possible to transfer money between our bank accounts, send money or perform collection order. Outgoing orders could be performed over the common bank payment order (directly in Xero as has been noted) or we can set order for our credit card. Indeed it is possible to create orders in the electronic banking of our bank - in that case we create only evidence of orders in Xero. We can define “bank rules” for orders classification. In result, Xero provides excellent and very useful unified interface for invoice and payments management.
The third tab called Reports displays financial and accounting reports and budgeting tool (Budget Manager). There are reports for aged pay-ables and receivables, balance sheet, cash summary, profit and loss sheet and sales tax report. The reports can be printed or exported to Excel, PDF, or Google Docs. Budget Manager is a simple tool to create predicted costs and revenues overview. Budget Manager supports export to Excel and Google Docs.
The General Ledger is available on the fourth tab called Advisor. GL transactions are maintained in the Manual Journal. In the Manual Journal we can add rows with description, account, tax rate if needed, name of consultant and debit or credit. All entries in the general Manual Journal should have narration and date. Modified Manual Journal can be saved as a draft or posted. On the Advisor tab we can also select the following options: Management Report (creation of complex report for management), Sales Tax Reports, Annual Accounts (Annual Report), Reconciliation Reports (summary for accountants) and Export GL Transactions (General Ledger could be exported to internal Xero format or other accountant portable format).
Working with Customers, Vendors and Employees
The fifth tab is called Contacts. Contacts are divided to four groups: Customers, Suppliers, Employees and Training Customers. These contacts can be used across the application, especially in invoices and payments orders definition.
The last tab is called Settings. In settings we can change all organization parameters entered during the company creation process, change items in inventory or change Chart of Accounts. Items in inventory can be imported from CVS file, and exported to PDF or CVS. Chart of Accounts can be imported from CVS files, and exported to PDF or directly printed.
Xero doesn’t have any special system requirements. It runs on any standard office computer which runs Windows XP or higher, and supports the following browsers:•Internet Explorer 8 or newer
- Mozilla Firefox 3.6 or newer
- Safari 5 or newer
- Google Chrome
- Microsoft Office Word with DOCX format (to fully customize our invoices)
- Skype (it can be used for keeping in touch with our contacts)
What we liked
- User interface is intuitive and simple
- Xero’s very complex help with detailed processes descriptions and screenplays helps to use the product quickly and efficiently
- Invoices are fully customizable
- Reports can be exported to Google Docs where they can be easily shared with management and partners
- Application is compatible with all main browsers, even on mobile platforms
- It is possible to use Xero in an international environment
- It is possible to integrate Xero with bank accounts to further automate the process
- The pricing model is fair (it does not count the number of users and all packages have full support)
- Good interoperability with other accounting systems allows for easy migration
- Good implementation of various accounting standards allows for international usage.
What we did not like
- Reports are not customizable
- Missing support of exporting to Microsoft Office Web Apps (Microsoft Office Web Apps have better compatibility with docx and xslx Office file format than supported Google Docs)