What is Xero Bookkeeping Software?
Xero is a sophisticated piece of bookkeeping and accounting software for businesses. It runs through a secure online interface. Companies can use it reliably to store all their bookkeeping records externally, without significant risk of data destruction as might arise when relying solely on physical paper records or on a standalone piece of software on a computer in the company office.
History of Xero Bookkeeping Software
Xero is a relatively young but rapidly maturing product that has been steadily gaining global market share year upon year. According to one estimate, it had achieved a global market share for online accounting software of 9.7% by 2018, second only to the long-dominant market leader Quickbooks Online.
Originally launched in New Zealand by technology entrepreneur Rod Drury in 2006, Xero first became available in the UK in December 2007 before further expanding into Australia in 2008, the United States in 2011, South-East Asia in 2016 and Canada in 2018. It seems to be gradually conquering the world as it builds on its early success with new rounds of investor funding, allowing it to set up dedicated operations in diverse new territories. In January 2018, it was delisted from the New Zealand Stock Exchange in favour of the Australian Securities Exchange. By October 2018, it had achieved a market capitalisation of $6 billion.
In the 2018 chair’s review, Drury, who stepped down as CEO in March 2018 but stayed on as a non-executive director, outlined his vision for further global growth of Xero under the stewardship of his replacement as CEO, Steve Vamos, a former manager of Microsoft’s operations in Australia.
Payroll Software Integration
In 2011, Xero purchased a company called Paycycle that provided an online payroll service, allowing the full integration of payroll management facilities within Xero. This was initially only offered to Australian customers from May 2012 before being rolled out elsewhere, with payroll integration in the UK being achieved from March 2015. From November 2018, payroll integration will be priced as an optional extra in Xero plans, so you only need to pay for it if you want it.
Is Xero as good as Quickbooks?
This can only be a matter of opinion, but there are many who rate Xero as being the superior overall product.
See for example this comparison by the reviewers at Merchant Maverick, which rates Xero the clear winner on features, multi-user support and permissions management, customer service and support, integrations, and security. Merchant Maverick also notes that all features of Xero are available at every optional price point, whereas at lower price points Quickbooks comes with a much more limited feature set.
Another review at Finances Online highlights Xero’s ease of use from the perspective of all functions being accessible from a single main menu screen with seven tabs. Xero’s highly flexible accounting management functionality is emphasised by this review. So too are its strengths in financial reporting and inventory management.
Features of Xero Accounting & Bookkeeping Software
Using Xero, you can efficiently undertake any and all of the following tasks that you may need:
- Invoice clients through the Internet – including online payment options
- Perform stock management and inventory tracking tasks
- Link your business bank account to allow automatic import of live financial transactions
- Receive daily updates on your business bank account balance
- Pay bills on time and to a schedule
- Track cash flow with the help of graphical data presentations
- Pay employees and automatic issue of payslips using the add-on Payroll software
- Keep records of expenses that can be claimed against tax liabilities
- Track the amount of time and money spent on different tasks and analyse their profitability
- Make use of the dedicated mobile app to carry out key tasks while travelling
- Automate the issuance of professionally presented online sales quotes
- Issue custom financial reports tailored to your priorities and needs
- Track gross profit, net profit, debt-to-equity ratio and other business metrics graphically
- Set and track performance goals for key metrics in the integrated business dashboard
- Integrate Paypal, Stripe and other online payment service providers
- Partially automate and fully track your purchase orders
- Send invoices, quotes and purchase orders in over 160 currencies
- Track exchange rates to keep an eye on the conversion values of foreign currency payments
- Store transaction records in the cloud for ease of access
- Store your contacts and a potted history of your key interactions with them
- Track, manage and file your VAT dues to HMRC, including for purchases from other EU countries
- Track your business assets and manage depreciation and disposals
Xero has a huge strength in working with add-ons covering a wide variety of tasks such as processing purchasing invoices, expenses and credit control. These add-ons are plumbed into Xero and work seamlessly. They lead to significant or great efficiencies and sometimes literally transform a business. BookCheck fully supports the choosing and installation of these add-ons.
Xero sounds great, but I just want to run my business and leave the financial tracking and bookkeeping to the specialists. Who can help me?
BookCheck can. If you work with us, we can set up Xero to cover all aspects of your business, and will regularly issue you with reports and advice to help you manage it more effectively, without overloading you with information you don’t need.