Xero has been reviewed as the best accounting software suitable for growing companies. Xero’s pricing plans are flexible enough to meet different stages of development and the evolving small business accounting requirements that come with business expansion, as they are not contingent on staff counts. Xero should be used by companies that are expanding fast and ones that do not want to be concerned with the number of people in their organization using it.
Content Outline
Why Xero Is The Best For Growing Businesses
At the initial stage, any businesses generally start on a small scale. However, as the company grows it has a different financial demand. The majority of small business with this type of attitude of growth prefer to select their accounting software solution and commit to it for years. Compared to other reviewed software, Xero is far more preferable, as it covers the needs of businesses at all their development stages.
It is evident that the pricing structure of Xero suits the dynamically growing businesses. Unlike the majority of its competitors, Xero has several pricing plans that are based on the features, rather than the number of users. Indeed, every Xero plan can include an unlimited number of users; this is especially suitable for growing companies. Xero also connects to more than 1,000 of third-party business apps – more than any other software that is reviewed. The integrations is also expected to increase in later phases of business growth to enable the business to steadily grow and function with ease.
While going through the software testing phase, it was identified that Xero was suitable for people who do not have proper accounting knowledge. Despite all those features, Xero remains easy to navigate and use both the interface and visualization for those customers that are still new to the concept of managing their own business (see the screenshot from our demonstration below). Therefore, Xero is the best accounting software for growing businesses.

Things We Like About Xero
- Xero’s pricing structure is not based on user so you are not restricted by the number of user to add to the software.
- It is compatible with more than 1000 business applications.
- Xero also has a good interface and layout design that lets the user easily understands the complicated accounting numbers.
Things We Don’t Like About Xero
- The lowest tier is limited on the invoicing and bills which implies that many businesses will be forced to use plans with a higher charges.
- It is not easy to customise the invoices like other softwares.
Ease of Use
When using the software, it was relatively easy to navigate and the interface of the Xero software was highly user friendly. The main dashboard shows several main metrics business owners want in their account; such as the amount in the business checking account, clients or customers who owe you, bills due and the cash flow picture at hand.
At the very top of the interface there are several drop-down menus appear to contain all of the features available in Xero. Like most other prominent accounting programs, QuickBooks, Xero can be somewhat complex due to the variety of functions offered. But when it comes to presentation of data, in which competitors we reviewed also failed, Xero is outstanding. For instance, the cash flow graph of Xero has the ability to show money going out of a company as a grey line while that coming into the company as a blue line. An entrepreneur desiring to have good cash flow would prefer to have the blue line higher than the gray line.
Also, Xero do not include a lot of accounting terminology such as ‘debit’ or ‘credit’, anywhere in the app because the majority of business people are not accountants or bookkeepers. There are numerous ways that many other accounting software programs commonly use terms that are related to accounting, Xero use terms such as “invoices owed” and the “bills that you are expected to pay” which is very clear. Even if you are unfamiliar with general ledger accounting, the software is simple to grasp because of to its straightforward language.

Xero Features
Xero helps business owners work efficiently by managing processes and offering tools to complete finance-related work more quickly. Below is a list of accounting features available in Xero to make accounting a less tedious process.
Recurring Invoices
Another useful option is that Xero enables to create repeating invoices with the option to set the send date and frequency, as well as the end date of these invoices. Automatic payment reminders save you time by reminding clients to pay on time, preventing you from having to chase down overdue invoices. The software allows you to program it to email your customers’ receipts as payments are received and recorded, as well as to send reminders before or after the payment is past due.
Online Invoicing
Xero’s invoicing features only had a couple of drawbacks. All activities take place in the cloud which allows users to edit without having to resent the customers. Invoices can be sent directly via email. Xero is linked with PayPal, Stripe, Square and other processors through which you can easily accept payments online.
However, we discovered a drawback: Customization of an invoice’s appearance is slightly less flexible than other software like FreshBooks, which is mainly in the business of creating invoices. This is good to note for anyone who sends out many invoices because a professional-looking invoice is critical for getting paid. However, transforming a quote to an invoice is very simple and invoices possess the feature of the lines of the invoice that can be dragged and rearranged. Fortunately, it is possible to add files to invoices for example a document or a photo of the work (you can see an invoice example in the picture below).
Inventory Management
Xero’s Inventory Plus management system is a new feature of Xero. This system means that you are able to control inventory at the different branches and the different outlets. The program ties into Shopify and contains order fulfillment capabilities together with the delivery selection and tracking data. In our view, this new system will be very helpful for those organizations that are much larger and have heavy focus placed on e-commerce.

Read Streamline Your E-Commerce Finances with Xero
Transaction Monitoring
Xero offers a History & Notes features that gives an activity report at the bottom of every transaction. This feature allows you to track information concerning the document. For instance, you can view whether the invoice was generated directly from a quote, who prepared and, or authorized it, and at what time they prepared it and authorized it. This screen also presents the automatic payment reminder information including the related e-mail address and time. Further, some of the extra notes can be added such as the expected payment date.
Time Tracking
We acknowledge that Xero offers time tracking in all its packages. This is in contrast with many of its competitors like QuickBooks that has time tracking as a feature reserved for higher-tier plans or as a feature in an extension. Clients have to install the free app Xero Projects for time and cost entry, as well as invoicing and reporting. We particularly like that this feature is free even though some of the stand-alone time-tracking applications offer extra features.

Reports
Big data is becoming a real phenomenon influencing businesses and their operations even more every year. Startups and growing businesses require business information that is presented in a simple form so that the business owners can take necessary action. The demo of software used in the project revealed that using Xero can make sense of the data analysis tools available to you. Xero offers a reporting facility that translates your accounting information into colorful bars, pie charts as well as other related diagrams. Some of them are your business’s 10 top customers, a budgeting tool of Xero, and visibility of income from the main sources. Xero is also used to export multiple reports.
Security
Xero links your bank and credit card accounts and imports data daily so that the application uses bank-grade encryption to safeguard your valuable business data. Also to your benefit, there is an opportunity to turn on the two-step verification to add extra protection to your login. If you decide to add employees to your account, then it is possible to set the access rights which determine what data the chosen user will be able to work with.
Xero Pricing
Looking at the fees of the other different accounting software we considered for this guide, Xero is fairly charged. Other software such as FreshBooks and QuickBooks Online begin at $18 per month with no discounts. On the other hand, Xero’s entry-level plan is $15 per month, which is marginally less.
Because of its tiered pricing structure, Xero is perfect for growing companies. Nearly every available feature, including estimates, accounts payable, and inventory management is included in each of Xero’s plans. In some other accounting software, these features are available only in the premium plans. However, there are three features available in Xero’s top plan which are the cost, multiple currencies, and tracking of projects.
Unlike most of the accounting applications, with Xero, you cannot use the number of staff that will gain access as a way to determine the pricing. There is no restriction when it comes to the number of users every Xero plan can be accessed. This is one of the most important advantages of Xero, which means that this application is excellent for companies that are actively increasing their staff number.
In addition, Xero has a 30-day free trial, which will help you and your employees test whether the program is useful for your business or not before you buy it. Since not all accounting software doesn’t offer a free trial, it is commendable.
Here is the description of each Xero plan:
- Early: This plan is $15 monthly, and you are allowed to create 20 invoices and 5 bills per month. It also covers access to Hubdoc.
- Growing: This plan costs $42 monthly and includes all of Early’s plan with endless invoices, bills, and bank transactions.
- Established: This is the most expensive plan with a price of $78 per month. Moreover, the expense and project plans in the Early and Growing plans and the capability to use multiple currencies are also provided in the Established plan.
Implementation and Onboarding
Xero is easy and simple to set up. The new users of the software can get the 30-day trial test which does not mandate the users to enter their credit card details. This can be comfortable for a lot of users since the trial version of Xero is complete, and can be tested with actual data. This puts Xero in a better position than competitors that don’t provide such extended terms of payment.
After creating an account, Xero offers several initial tutorial tips to make you acquainted with the features of the application including, linking the business bank accounts, adding customers, and creating invoices. Most of the pages in the app include links to step-by-step tutorial videos, and detailed instructions, which is very useful for users who are not very fluent in using technology. Read Why Choose Fastlane Group for Your Xero Implementation
Customer Service
Overall, the options available for customer support in Xero were satisfactory. However, they were not as numerous as the features of the other software. There is no direct phone support; you have to first reach out to customer service through the email or live chat option. However, the positive thing is that the software does not make users wait very long hours. Rather than receiving a callback immediately, it will call you back at a prearranged time preferred by the consumer.
The system seems to satisfy at least the majority of the clients. The customer service that Xero provides amasses a score of 4.3 out of 5 on Trustpilot, and many users are giving nice comments about the fast response. This is good for growing businesses that prefer to work with a service that does not spend too much of their time on technical problems.
Besides, there are plenty of ways to get assistance online such as videos, blogs, podcasts, small business guides, and training courses. Xero made it easier to search for help online within the software recently.

Limitations
Xero is a powerful option for your accounting solutions. However, there are some limitations :
- Cap on invoicing and billing: There are still limitations for the basic or lower price plans in Xero in terms of invoicing and billing services. The Early plan allows only 20 invoices and 5 bills per month, which are relatively low. For comparison, FreshBooks offers an unlimited number of invoices to five clients with the basic plan. To get rid of these limits, customers will have to upgrade to Xero’s advanced or premium tier plans.
- Expense tracking: While the Early and Growing plans lack basic functionalities, they do not allow for expense tracking. This feature is on the Established plan and you’ll have to upgrade if you want to use it.
- Niche limitations: Xero provides clients with numerous functional tools, which makes it quite ineffective for businesses that have very specific needs
- Accounts payable limitations: Xero also does not have a vast vendor ecosystem that will establish it within the accounts payable industry. By doing the accounts payable working is a crucial activity in managing business, so small business owners may wish to have additional software that would enhance Xero.
Methodology
As we try to help small companies choose the right accounting software for their needs, we evaluated many accounting and invoicing software. The examined features include payments and invoicing, integrations, mobile applications, reporting, user limits, and customer support when evaluating to produce the quantitative score and use case.
We also checked the price and whether or not there is a possibility of a trial for free. Thus, the information sources included the website of the company and recorded demos of their software. Furthermore, they assist in getting the first-hand impression of the software when they contain users’ reviews with their positive and negative experiences. When searching for the best accounting software for growing businesses in particular, we concentrated on pricing plans, the number of connectable applications, and abundance of the options and instruments.
Xero FAQ
Xero is an innovative accounting solution targeting small businesses to assist them in organizing their finances which include bookkeeping services, invoicing, business analytics, and many other related services.
While QuickBooks has the dominant market position in the U. S. market, Xero has a major market position in places like Australia. Both the software packages have a lot of features and interconnected products, but Xero is slightly cheaper and they do not put a limit on the number of users.
Xero has a user-friendly interface with coherent navigation and it does not use complex terms that normal users who don’t have an accounting background cannot understand.
Bottom Line
Small businesses or freelancers can continue to benefit from the use of Xero for
- Expanding businesses that are adding new employees rapidly.
- Companies that need to link the accounting software to as many other applications as possible.
- Business owners who are not so familiar with accounting seek many colorful codes and figures to get an understanding of the performance of their business.
It is not suitable to use Xero for
- Companies that have several invoices or bills to be sent regularly at relatively low cost.
- Digital businesses such as e-commerce which need a specific and customized set of tools rather than a standardized package.