Xero Accounting Software Review

Please note that this page contains affiliate links. While we only recommend products that we believe in, we may benefit financially from any purchases you make.

Xero Accounting Software

Excellent Accounting Software for Small and Medium Businesses

Xero accounting software is one of the best products for small businesses available for online accounting.

We say this because Xero is easy to use; there are lots of add-ons, excellent support, and a reasonable pricing structure.

As a bookkeeper, I have looked at lots of different software packages for clients. The one that I always come back to is Xero.

Xero Accounting Software Review

In this review, we will look at the following:

  • Pricing
  • Ease of use
  • Features
  • Reports
  • Security
  • Customer Support
Visit Xero

What is Xero?

Founded in New Zealand in 2006, Xero revolutionised small business accounting with its cloud-based double-entry platform. Over the years, it has evolved from a promising start-up to a market leader in accounting software, boasting over two million subscribers. In 2024, Forbes awarded it an impressive rating of 4.5.

Making the switch from spreadsheets or basic accounting software to Xero can significantly enhance a business’s reporting capabilities and user experience. This sentiment is echoed across numerous bookkeeping forums and groups I participate in, where both bookkeepers and business owners frequently recommend Xero for its efficiency and ease of use.

Xero Accounting Software Review

Xero Pros and Cons

Here is a quick rundown of the pros and cons of Xero:


  • Unlimited Users
  • Advanced Features
  • Price Competitive
  • Clear user Interface
  • Set User Permissions


  • It can be more expensive with added features
  • A steep learning curve
  • Reviews of bad customer service

Xero Accounting Software Review Pricing

Xero has a simple pricing structure with three plans available, starter, standard and premium.

Although the pricing structure is similar to competitors like QuickBooks, there are additional costs for add-on features, including payroll, claiming expenses, tracking projects and submitting CIS returns. These add-ons may make it more expensive, but the price is not everything.

While looking at the pricing, one thing to note is that Xero software offers unlimited users; this is one significant advantage for growing companies and those employing more accounting staff.

As with any accounting software, always take a 30-day free trial to test it for business needs. During the trial, look at all the features and check if it has everything that is required.

Below is the pricing structure per month for Xero; all plans include an unlimited number of users.

Xero accounting software pricing UK

Xero offers some optional features, so we have included the pricing for them.

  • Payroll – £5 per month, then £1 for each additional employee
  • Claim expenses – £2.50 per user and then for each additional active user £2.50 per month
  • Track Projects – £5 per user and then for each additional active user £5 per month
  • Submit CIS returns – £5 per month
  • Pay with Wise – From £3 per month
  • Analytics Plus – free until 31 January 2022

Xero Online Accounting Software

Xero is an online accounting software meaning that it is cloud-based.

There are many advantages of running your accounting software as cloud-based, including:

  • Login from anywhere with internet access.
  • Double Entry system.
  • Multiple users can use the software at the same time.
  • Users can access it from home or work.
  • You can see the current financial position.
  • Grant access to bookkeepers and accountants.
  • No installation of software on computers.
  • Automatic bank feeds for multiple bank accounts.
  • Secure Data.

Xero Making Tax Digital

Making Tax Digital

HMRC is in the process of setting up making tax digital (MTD). Making tax digital is submitting tax returns online using third-party software. The aim is to improve efficiency and get tax right.

Xero has worked hard with HMRC to become Making Tax Digital compliant. For businesses registered for VAT with a turnover above £90,000 already submit the return electronically. From April 2022, all registered VAT businesses will have to submit VAT returns electronically.

The next step is from April 2026 for self-employed and landlords with a turnover above £10,000 to submit the self-assessment online. MTD will see many small businesses needing to convert their accounts to software, and Xero is an ideal solution.

There are also plans in place for corporation tax, although no date is set yet.

Xero Review – Features

Xero has lots of great features, from their dashboard to reporting. We will review some of the main features, but they are working on the software, bringing out new features and updating reporting.

Ease of Use

I have found Xero to be one of the best products available as an accounting solution. It is easy to set up, enter transactions, produce reports, and share information.


Example of Xero Dashboard

The dashboard on Xero shows most of the information that a small business owner requires in one place.

It has an easy to use menu, as well as shows a quick snapshot of the business finances. From here, it is easy to see the bank balance, sales invoices owing and bills that require payment.

All the features in Xero are easy to reach using the simple drop-down menu. If you want to post a new transaction, a ‘+’ sign lists all the different transactions.

Bank Transactions

There are several different ways to get bank transactions into Xero. The simplest way is by setting up bank feeds using open banking. It will guide you through the process and import the bank transactions once connected.

Xero bank feed with transactions

Xero allows you to have more than one bank account and credit card account.

Once the bank feeds are available, it is easy to match outstanding invoices and bills or create the posting transaction. To make the process even more accessible, it is possible to set up bank rules for regular payments, saving time entering the same information each time.

If you do not use the bank feeds, there are also options to add transactions using spend or receive money manually.

Once all the bank transactions are in the system, you can complete a bank reconciliation to ensure that the bank balance in Xero is the same as the bank account statements. Running a bank reconciliation ensures that all the transactions are included. You will need to complete a bank reconciliation for each of the bank accounts.

Sales Invoices and Quotes

Producing sales invoices and quotes for your business is one of the most important tasks.

Xero Accounting Software invoicing

Xero makes it simple to add customers and create quotations to email directly to the customer. It includes a link for the customer to accept the quote. Once accepted, the quote can be converted to an invoice.

One of the significant advantages for a larger company using Xero is unlimited users. It allows the approval of invoices by different people; it might be that various departments approve their invoices, or you have several people in the accounts department. QuickBooks Online only allows a maximum of 5 users.

One of the things I like about producing invoices in Xero is the templates. There are several built-in allowing for the changes in branding, including colour and adding a logo.

The main advantage is a feature to download a template, make the changes needed and upload it. It means that you can include any additional information, change the layout, change colours and make sure it fits the business.

If you regularly invoice the same item to the same customer, recurring invoices are available. They are simple to set up and, once done, will automatically email the invoice each time.

Accounts Receivable

Getting paid fast by customers is essential for cash flow.

Setting up an integration with Stripe or Go Cardless includes a payment link on the invoices, making it quick for customers to pay. If you prefer payments by bank transfer, include the bank details in a notes section on the invoice.

The accounts receivable section in Xero makes it easy to produce reports and see outstanding and overdue invoices.

Sending statements and reminders to customers can be a slow process, but with Xero, they can be set up to send automatically. There is a space to add notes on the invoice, allowing people to know if payment has been chased or a problem.

Expenses and Purchase Orders

Xero accounting software expenses and bill entry

Purchase orders are available to set up and send to suppliers. The process is similar to quotations, where the order can be approved and sent to the supplier. Once the goods or services are received, you mark them complete.

There are several ways to add bills to Xero, including:

  • Emailing a photograph
  • Using Hubdoc reduces data entry
  • Creating a bill from a purchase order
  • Entering it manually

Accounts Payable

Keeping suppliers happy and paid on time is essential to control the flow of goods through a business.

Xero has a feature to set up bulk payments automatically; it is helpful if you have lots of bills or pay suppliers on a specific date.

Using their pay-wise setup means that payment is made directly through Xero, and there is no need to create payments in the bank, saving time.

The dashboard shows outstanding bills, and there are various reports to help keep track of when payments are due.


As with the most popular accounting solutions, Xero has the feature for the Construction Industry Scheme and will report directly to HMRC (see note below).

It enables the business to issue CIS invoices, verify subcontractors and produce statements.

To submit the CIS returns to HMRC via Xero, there is an additional fee of £5


For small business owners invoicing in multiple currencies, Xero is an ideal solution.

It has over 160 currency rates, which you can view, produce reports, get conversions and produce invoices.

Multi-currency is available in Xero on the Premium plan of £33 per month.

Xero Reports

Xero report feature

Xero has an advanced reporting feature.

There is an excellent selection of reports, and it allows you to change columns and add comments.

It is easy to click on transactions or figures and get a breakdown. One advantage is being able to create and save custom reports. Management of small businesses may require a unique report, and it is possible to generate the report and save it.

Additional features

Xero also has other features, which you can look into further by using their trial; these features include:

  • Inventory Management
  • Expense Claims

Customer Support Review

Xero Support Topics

I have used their online customer support on a few occasions. Their support desk is very knowledgeable and will answer any questions.

Xero Central is their online support area. It includes all help topics as well as links to support. Once a ticket is issued with customer support, they will email any answers. All tickets are available to see within the support area.

There is also an online community including accountants and users; this may help answer some simple questions.

The one thing that support doesn’t offer is a live chat, allowing users to contact support via the software.

Xero Security

Xero security is one of the most important features of cloud-based software.

It is committed to protecting users’ data by:

  • Defending data
  • Data Encryption
  • Security monitoring
  • User authentication
  • 2 step authentication

In 2021, a 2 step authentication was introduced, making Xero even more secure for its users.

Alternatives to Xero Accounting Software

If you are looking for an alternative to Xero, there are a few options:

QuickBooks Online

Quickbooks review dashboard
QuickBooks DashBoard

QuickBooks Online is suitable for most businesses, with a similar pricing structure and features to Xero.

Visit QuickBooks

Zoho Books

Zoho Books Dashboard

Zoho Books offers a free version for a turnover of up to £35,000. With lots of additional apps available, Zoho can grow with the business.

Visit Zoho Books


FreshBooks review dashboard

FreshBooks has a competitive pricing structure and is great for self-employed and small businesses.

FreshBooks includes some additional features like time tracking and mileage.

Visit FreshBooks

Read our guide on the best accounting software for small business.

Xero Integrations & Add-Ons

One of the great things about Xero is the integrations available. If you are looking for a complete accounting solution, you should find an integration for the job.

The apps include some of the following:

  • Payments
  • invoicing and jobs
  • Payroll
  • Track Inventory
  • Time Tracking

Xero’s mobile apps

Xero accounting software has a mobile application for both Android and iOS.

The application includes all the features of Xero, allowing you to complete everyday tasks while out and about.

Xero Reviews

There are lots of Xero reviews online from users.

If you want to read some, they are available on:

There are mixed reviews, but if you are unsure, look at the 30-day free trial.

Xero Accounting Software Review Summary

Xero accounting software is one of the best accounting solutions for medium and small businesses.

I like Xero for ease of use and have assisted clients in setting up and running their accounts. I have also trained a few people on how to use it daily.

Xero is constantly updating its software and developing new features.