Xero is accounting software specially designed for small businesses to run their bookkeeping efficiently to avoid problems while increasing their growth. The Xero bookkeeping software will help you automate tasks such as filing of year-end tax and uncomplicating invoicing. Thus, you get a clear picture of your business’s financial health. One of the major USPs of Xero is its ability to operate from anywhere and anytime, so you will only need to ensure that you have good internet.
Established in 2006, Xero is now used by small businesses across 180 countries and has 4.16 million subscribers. It features a transparent accounting system that showcases transactions, cash flow, and account details. In addition, it has an online bill-paying feature that lets you keep track of payments and other bookkeeping tasks. These features can help you maintain good relations with your vendors.
Xero integrates well with third-party apps related to e-commerce, finance, and billing thanks to a free API that enables users to integrate with its software. It also has an app version enabling Android and iOS users to generate invoices using their smartphones. Furthermore, this cloud accounting software features multiple currencies and tax rates, making it viable for use around the world. This makes Xero bookkeeping software a one-stop accounting solution for any businessperson. If you have never used Xero, you will find the accounting software and its features quite overwhelming, so you might hesitate to try it out. If you’re new to Xero, it might seem overwhelming, but partnering with experienced Xero accountants can help you make the most of its features.
However, it’s our understanding that by incorporating Xero in your accounting process, you will promote
efficiency and increase productivity. To help you understand Xero bookkeeping software better, we have listed its pros and cons. Do take a look.
Pros
Anytime, Any
As long as you have Wi-Fi or an internet connection, you can use Xero bookkeeping software anywhere in the world at any time, giving it an advantage over desktop
accounting software. You can now access Xero on your smartphone and get updates automatically.
Easy-to-Understand Transactions
Xero offers easy-to-use templates on which you can select required data fields and finalise them. There are also other solutions which you can use for more customisation.
Fraud Reduction
Xero bookkeeping software has multiple security layers, such as two-authentication and multi-approval processes. Even employees can be restricted from accessing financial data, inventory and creating numerous sign-ins.
We understand that the security features might be a bit overwhelming to understand or operate. If you find it difficult to handle, you can partner with CoxHinkins accountants who have experience operating Xero. Live-feeds of Bank Transactions
One big reason to incorporate Xero in your accounting process is its ability to sync multiple bank accounts to the software and create a single live feed with all the
statements available at a single point. You will see the updated transactions on the software, thus enabling you to track sales invoices and match the payments against
purchases. With a live feed of banking transactions in your hands, you can keep a tab on the money coming in and going out, thus reducing the requirement for bookkeeping admin. If you are interested in reducing you bookkeeping admin further than you can explore the option of bookkeeping services of CoxHinkins.
Gives You a Perfect Overview of Your Business Health
Xero bookkeeping software can summarise all your activities through financial reporting. Each report can be tailored as per your requirement, such as adding filters so that you see the data you want to see. Xero offers reports such as balance sheets, cash flow
records, and income statements. You can also filter these reports by each client so that you can check each one’s transaction and invoice history.
Easy to Collaborate
Xero has been designed to be collaboration-friendly, thanks to its centralised information, which can be shared with your accountant. With Xero, you can collaborate with your accountant and streamline your process. This enhances the workflow, especially when working with a management accounting service.
Keeps Updating
Another major pro of Xero bookkeeping software is its continuous upgrades and improvements in-app, web platform, and tools. These updates are free and occur promptly. Also, Xero takes customer feedback seriously and makes modifications to address new needs.
Cons
Imperfect Integration
Xero bookkeeping software can integrate with multiple third-party apps that help you increase the efficiency of your business operation, reduce accounting time, and
streamline cash flow. However, if the integration is not done properly, it will create unnecessary errors that must be fixed, leading to time wastage. To avoid such a situation, you will need to train your accountant in Xero or hire CoxHinkins accountants who are well-versed in operating Xero Bookkeeping Software.
Incorrectly Configured Auto-Posting
Auto-posting is one of Xero’s important features. After each day, all the daily transactions are noted in a report. However, if not configured properly, it can cause serious issues. To avoid such a problem, you will need the help of an experienced accountant who can handle Xero.
Cost
Compared to other accounting software, Xero bookkeeping software is relatively expensive. The reason behind this is its incredible features, which are missing in QuickBooks and Sage. The high price of Xero may entice small businesspersons like you to look at other options.
Not Suitable for Big Businesses
Xero has several unique features, but these are good only for small businesses. Big businesses or corporations have vast volumes of daily transactions. Once your small
business exceeds 2,000 transactions per month, it’s time to change the software. Xero cannot handle so many transactions, and it will slow down the response time and report generation.
Conclusion
All accounting software has its drawbacks, and Xero has its share, too, such as cost, integration issues, incorrect configuration in auto-posting, etc. But let’s not forget its numerous plus points: easy to understand, operate anywhere and anytime, easy to collaborate, constantly updated, restricted access, and gives you live feed of bank transactions. We hope this blog will help you better understand the Xero bookkeeping software.
If Xero fulfils your requirements but you or your accountant need help to operate it, we have a solution: our professional and Xero-trained accountants. CoxHinkins also offers year-end, payroll, bookkeeping, management, and VAT services, to name a few. Apart from Xero, our accountants are well-trained in QuickBooks and Sage accounting software, and we have designed our services to give your business an edge in the market, thus saving you time to invest in other important tasks. We can connect at your convenience by phone or online meeting to discuss our services in detail.
Disclaimer: Kindly note this blog provides general information and should not be considered financial advice. We recommend consulting a qualified financial advisor for personalised guidance. We are not responsible for any actions taken based on this content.
