How did your tax-info-gathering process go this year? Did you spend hours (or days) scrambling to tally shoeboxed receipts for your accountant? Did you go through the assorted hoops of creating a Quickbooks “accountant’s copy” only to discover — whoops! — that you and your CPA have different, incompatible versions? Do you even know how much money you made before she calculated it for you?
And how did you feel about all that? I suspect you’d rather be growing your business, hanging out with buddies — or probably even watching grass grow. Anything besides dealing with The Books.
Consider getting rid of those headaches and your clunky bookkeeping system (or non-system) once and for all by switching to Xero.
This article doesn’t list features described elsewhere, nor is it a comprehensive review. It’s simply a few reflections on using Xero as an alternative to the current industry
monolith standard, from my perspective as a small service-based sole proprietor.
UPDATE at 10/21/13: Now this is a game-changer! Document attachment has been added as a feature. You may now upload attachments directly to transactions, or store them in a file library until you’re ready to attach them. Reason #826 to use Xero!
1) Automated bank feeds = zero data entry.
Matching the items from your bank feed with your Xero account is truly easy because of the software’s rules-based coding. Once you’ve set up your rules, Xero will match most of your bank transactions automatically.
It’s like magic: Bank reconciliation rules remove the dreaded time-suck element from classifying routine financial transactions.
With this technology, there’s really no more reason to wait until tax time to figure out your numbers, and certainly no more need to have your accountant manually (and expensively!) enter all your transactions into a desktop-based program. This feature alone makes Xero worth the subscription, and will save you loads of time and money.
2) Platform-agnostic, cloud-based, work-with-anyone-anytime.
You use a Mac, I have a PC. No problem.
I live in Asheville, NC and you live in NYC. D’accord!
You and I and your business partners can access the same financial data, from any device, anywhere in the world. No more sending data files back and forth, and no more dealing with “different versions.” Everyone has the same version, all the time, no matter where they are on the planet.
3) 24/7/365 backups.
When was the last time you backed-up your QuickBooks data? (Or your videos, photos, music, and all that other important stuff stored on your hard drive?) Life gets busy and it’s an easy thing to forget, which is maybe OK…..until it isn’t.
With cloud-based software like Xero, there’s no need to worry about manually backing-up your accounting data. That’s because it isn’t stored locally on your computer. If your computer crashes, or your laptop gets lost or stolen, all your important accounting data remains unaffected because it’s stored “in the cloud.”
4) Snazzy-looking invoices.
Businesses do a lot of different things, but getting paid is always one of them. Xero allows you to can create, send, and automate customizable, professional-looking invoices. You can even send them from your phone, right when you’re thinking about it — like when you’re with the client or customer. Though I rarely use the send-from-phone feature myself (preferring just to whip out my Square), it’s still a really handy option.
Another great thing about Xero invoices:
Get paid instantly. Customers just click a PayPal link from directly within your invoice.
5) It’s called “beautiful software” for a reason.
If you’re the kind of person who cares about design and aesthetics, then Xero is for you. Working with the clean and mostly intuitive user interface actually makes bookkeeping
fun completely tolerable, even for non-accountants (or so I’m told.) I have no doubt the clever Kiwis at Xero HQ decided upon the company’s particularly perky shade of Deep Sky Blue because of that color’s association with tranquility, intuition, and dependability.
6) No pop-ups!
And finally, one of the most ginormous benefits of switching to Xero from Quickbooks Online (really, any Intuit product) is that there’s no constant stream of upsells, a noticeable lack of ads and annoying pop-ups, nor an unwieldy array of URLs to manage.
For example, if I’m not a “ProAdvisor” nor a regular user, do I visit accountants.intuit.com? Or is it qbo.intuit.com? And good luck deciphering merchant services!
With Xero, you simply visit xero.com and click the clearly labeled “Log In” button in the top right of your screen.
This is a small detail, but priceless.
The bottom line
Is there a learning curve? Yes.
But really — for what in life isn’t there a learning curve? The Support Guide and Community are both super easy to navigate.
There’s also a unique and sort of non-American language used within the software, which for some folks is apparently a little off-putting. It’s a global world, people! Let’s kick our provincialism to the curb.
Does it cost money? Yes.
There are free accounting solutions out there, and those can be perfect for very budget-conscious micropreneurs who are just starting out.
But most people in the US will compare prices between Xero ($29/month, or $348/year) and QB Online ($26.95 for roughly similar features, or $323/year). So Xero is not free and it’s $2/month more costly than QB Online — but you receive all the benefits noted above. (Especially #6, which ties in closely with #5.)
Is it for everybody? No.
Xero is fundamentally an accounting program for understanding your cash flow in real time, and honestly, not everybody needs to know this information every day. Still, wouldn’t it be better to know what’s happening as it’s happening — when you or your accountant can do something about it, instead of year-end when the time has passed and nothing much can be done?
I’ve found Xero to be perfect for my practice, and I recommend it to other service providers like acupuncturists, psychotherapists, photographers, and certain artists. But if you’re a maker or a retail store, for example, you’ll need to purchase additional apps from other vendors in order to track your inventory. (Which doesn’t make Xero not suitable for those industries; it’s just not a stand alone solution.)
Is it perfect? No.
For example, the Android mobile app leaves much to be desired. As of this writing, I can’t apply my previously set reconciliation rules. I receive a friendly — but frustrating — error message. And I can’t split a client payment between net amount received and Square or PayPal fees.
Supposedly the iPhone app is better. Scratch that. I read the reviews on iTunes, and they’re mixed, just like with Android.
(I wholeheartedly trust that Xero will fix all these issues eventually.)
It’s virtually unknown in the U.S. Isn’t that scary? No.
Xero is a very successful, publicly-traded New Zealand company with a U.S. team based in San Francisco. They’ve raised and invested millions of dollars, and intend to be a serious competitor in the U.S. by uniquely addressing the needs of a huge small business market undergoing massive technological disruption. They’re in it for the long haul, and I’m frankly excited and proud to be along for the ride with them. (You can read about the business of Xero on their page for Investors.)
Should I try it? Yes!
Join over 200,000 people worldwide who are making the switch to Xero. Make this particular part of managing your business SO. MUCH. EASIER. You can’t not do some sort of bookkeeping if you’re a business owner. So why not make it an attractive, convenient, and semi-pleasant part of managing your small business?