2014 Review of Xero


  • Easy to use and has simple navigation without giving up more advanced tools for power users.
  • User-customizable rules can be used to automatically assign transactions imported from bank to general ledger accounts and automatically perform other tasks based on definable criteria.
  • The company has a strong ecosystem of add-on products (more than any other application in this review), however, many of these solutions are localized for the Australia/New Zealand markets where Xero has a much stronger presence.
  • Supports download of bank account and credit card transactions from thousands of financial institutions in the U.S.

Potential Limitations:

  • Xero Payroll is available only in seven states (CA, FL, NY, NJ, TX, UT, and VA), so prospective users who cannot wait for the company to begin supporting a particular state should plan on using a third party payroll service like ADP.
  • The bulk of Xero’s subscribers are in Australia and New Zealand, but U.S. subscriber count should be bolstered by the company’s late April announcement of its strategic alliance with retail tax chain H&R Block.
  • Inventory tracking and valuation are not supported natively in Xero, although there are available add-on solutions which can meet this need.

Best Firm Fit:

  • Service-based micro businesses that need to manage cash, receivables, payables, credit cards, and general ledger, along with support for multiple currencies.
  • Companies that would like access to a large ecosystem of add-on products.
  • Users who are comfortable spending time setting up rules to automatically classify transactions into specific accounts based on selection criteria, so they can use the resulting near real time data to manage their business.

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