Software Guide: Xero

Intro

Xero is cloud accounting software designed for small businesses. Launched in 2006, Xero pioneered or popularised many concepts that have become standard features in all cloud accounting software.

Xero first gained recognition and a loyal following because of its appealing interface and design, which makes it easy for non-accountants to use. 

Xero has also invested heavily in building a strong network of bank connections. It can automatically pull bank statements as a daily feed and apply rules to automate a large part of the reconciliation process.

Xero’s expense claims module is another example of its focus on automating data capture. Users can take a photo of receipts and Xero will extract information required for expense claims. 

While Xero is designed with small businesses in mind, it can handle a high number of daily transactions and is used by a number of larger businesses. However, this can cause timeouts with reports at the upper end. Xero also limits the number of staff in its payroll module to 200 employees.

Highlights

• Easy to use - Simple user interface makes it easier for business owners and non-accountants to create invoices, pay bills and understand the financial performance of their business. BEST IN CLASS
• Extensible platform - Large marketplace of app integrations that extend the power of the platform by automating data sharing and processes 
• Faster bookkeeping - Reliable bank feeds with many financial institutions to automatically import bank transactions on a daily basis. BEST IN CLASS
• Faster bookkeeping - Matches transactions with invoices and bills, and suggests codes in the chart of accounts for recurring transactions. BEST IN CLASS 
• Faster bookkeeping - users can scan receipts with their phone and automatically extracts information for lodging expense claims
• Faster bookkeeping - powerful cash coding feature speeds up the reconciliation process
• Strong AI adoption - constantly improving quality of transaction matching in reconciliation and reading data in receipts
• Browser based - no software to download or secure, available on Windows and Mac 
• Mobile apps - includes apps with limited functionality for iOS and Android
• International trade - matches foreign currency payments to invoices and automatically applies the exchange rate
• Superannuation - automatically calculate and pay super directly from Xero
• Batch payments for suppliers 
• Pre-built reports are easy to run and have a basic level of customisation
• Deep integration with Stripe that matches Stripe charges for collecting payments online
• Online billing – send invoices with multiple payment methods such as credit/debit card and direct debit

Limitations

• Email-only support, no live support (chat or phone)
• Transactions limit
• Staff limited to 200 in payroll
• No native consolidation of multiple entities
• The interfaces for Expenses and payroll modules aren’t as good as the rest of the program
• Not all financial institutions are supported for bank feeds. These require manual importing bank statements
• Very basic inventory – requires third-party inventory management tool
• Forms have limited customization options

List of Modules

https://www.xero.com/au/accounting-software/all-features/

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Accounting 

Invoices

Purchase orders

Quotes

Bills

Accept online payments

Claim expenses

Bank reconciliation 

Bank connections

GST Returns

Payroll

Contact management

Capture data

Files

Reporting 

Multi-currency

Accounting dashboard

Fixed assets management - basic

Analytics - basic

Inventory - basic

Project management - basic

List of Modules - Extended

https://www.xero.com/au/accounting-software/all-features/

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Online invoicing with Xero

Work smarter with intuitive invoicing software. Send online invoices from the desktop or app as soon as the job is done.

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Customise your online invoices

Add your logo and make them your own.

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Accept payments instantly

Make it easy for customers to pay you.

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Set automatic reminders

Take the work out of chasing payments.

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Invoice direct from the app

Send online invoices on the go.

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Reconcile bank transactions quickly

Keep your financials up to date. Categorise and reconcile bank account transactions each day using suggested matches.

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Reconcile each day

Stay current with daily bank reconciliation.

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Use suggested matches

Check and accept automated account reconciliations.

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Bulk reconcile transactions

Code transactions in bulk – except on Starter plans.

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Pay your bills on time, every time

Track and pay bills on time. And get a clear overview of accounts payable and cash flow.

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Keep on top of bills

See what bills are due and pay them on time.

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Schedule payments

Make batch payments and schedule them in advance.

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Store bills in one place

Access all your bills online from anywhere.

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Use Xero expense manager on the go

Capture costs to submit and reimburse expense claims, plus view spending – all with expense manager tools.

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Take a photo of receipts

Make expense claims fast and paperless.

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Reimburse expenses promptly

Approve expense claims without delay.

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Monitor employee spending

View analytics to manage expenses.

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Do expenses on the go

Claim expenses right away using the mobile apps.

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Connect your bank to Xero

Connect your bank to Xero and set up bank feeds. Transactions flow securely straight into Xero each business day.

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Automatic bank feeds

Bank transactions flow securely into Xero.

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Stay on top of business

Keep track of money coming in and going out.

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Keep your data secure

Get a secure and reliable bank connection.

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Accept online payments easily

Accept payments online and get paid up to twice as fast by connecting to Stripe, GoCardless and others.

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Use online invoice payments

Take payments using Stripe, GoCardless and more.

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Get paid from the invoice

Add a ‘Pay now’ button to your online invoices.

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Better online protection

Safely accept credit card payments and direct debits.

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Track projects and jobs with Xero

Quote, invoice and get paid for jobs. Plus keep track of costs and profitability with project and job tracker software.

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Estimate and quote on jobs

Quickly prepare quotes based on your estimates.

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Track time and costs

Use the app timer or location-based tracking.

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Send customised invoices

Turn quotes into invoices for online payment.

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View profitability

Monitor profit margins on a dashboard.

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Lodge your BAS online

Xero calculates GST and speeds up preparing business activity statements. Submit your BAS to the ATO from Xero.

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Lodge your BAS online

GST is recorded and included in BAS automatically.

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Manage GST transactions

View GST transaction details and make adjustments.

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Connect to the ATO

Lodge BAS easily and securely direct to the ATO.

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Powerful payroll software in Xero

Pay staff and report payroll details to the ATO with online payroll software. Automate tax, pay and super calculations.

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Single Touch Payroll sorted

Simplify compliance and reporting.

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Automated online payroll

Xero calculates tax, super, and leave.

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Employee self-service

View payslips and request leave online.

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Manage Xero contacts effortlessly

Use Xero for contact management. See details of a customer’s or supplier’s sales, invoices and payments in one place.

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See transaction history

Get a complete picture of a contact’s history.

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Create lists and groups

Generate lists and groups from saved searches.

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Connect your email

See all your email correspondence in Xero.

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Data capture done automatically

Get copies of documents and key data into Xero automatically. Data capture without manual entry using Hubdoc.

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Capture bills and receipts

Take photos, use email, scan or upload documents.

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Capture data automatically

Add key information to Xero without data entry.

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Match bank transactions

Seamlessly reconcile data with bank feeds.

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Store documents online

Search and access bills and receipts from anywhere.

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Sort files with online file storage

Use Xero for online file storage. Manage and share documents, contracts, bills and receipts safely from anywhere.

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Store files in Xero

Email or upload any kind of file to the library.

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See docs alongside data

View the original document when entering data.

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Share files in real time

Give access to your accountant or bookkeeper.

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Up-to-date accounting reports

Track your finances with accurate accounting reports. And collaborate with your advisor online in real time.

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Get reports any time

See up-to-date reports when you need them.

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Customise your reports

Decide how to present the data in each report.

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Compare and calculate

Apply formulas to compare budget versus actuals.

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Understand your business

Easily run reports to support decision-making.

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Simple inventory management software

Keep track of what’s in stock with inventory software. Populate invoices and orders with items you buy and sell.

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Track items in stock

Xero keeps count of items and their value.

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See what's selling

View reports on how well items are selling.

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Add items to invoices

Use preset details in invoices and orders.

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Do business in multiple currencies

Pay and get paid in over 160 currencies with multi-currency accounting. Use instant currency conversions.

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Instant conversions

Xero converts international transactions for you.

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View rate change updates

See how currency markets affect cash flow or profit.

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Report in any currency

View reports in local or foreign currencies.

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Easy-to-use purchase order software

Create and send purchase orders online with purchase order software. Keep track of orders and deliveries at every step.

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Customise purchase orders

Tailor the layout and use your own order numbers.

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Create online orders

Use templates, add items, then email orders as PDFs.

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Convert orders into bills

Turn purchase orders into bills ready to be paid.

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Create online quotes in minutes

Create professional online quotes using Xero software or the app. Send quotes instantly from your phone or desktop.

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Create online quotes

Create quotes from a template or by copying one.

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Click to accept a quote

Send online quotes for acceptance on the spot.

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Convert into invoices

Create and edit an invoice directly from a quote.

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Look ahead with Xero Analytics

See future cash flow, check financial health and track metrics. Upgrade from Xero Analytics to Analytics Plus for more.

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Track cash flow

Quickly get an idea of your short-term cash flow.

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Everything in one place

Get an overview of your business in one place.

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Check financial health

See how you’re tracking through a dashboard.

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Upgrade to Analytics Plus

Get more with customisation and predictions.

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Xero dashboard: know your numbers

Keep an eye on your finances day by day using the accounting dashboard. Track bank balances, invoices, bills and more.

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Stay on top of your cash flow

Gain insight into your sales and spending.

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See bank and card info in one place

View your account balances and reconciliations.

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Follow up on outstanding invoices

Easily follow up what’s owed to you.

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Track areas of your business

Customise the dashboard to monitor certain things.

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Manage fixed assets easily

Xero makes it easy to track fixed assets and work with your accountant to manage them, keeping your books up to date.

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Record and update your assets

Keep track of your assets online, in one place.

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Manage depreciation and disposals

Work with your advisor to manage your assets.

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Get a full picture of your finances

Run reports to show fixed assets and their value.

Acquisitions

2011 Pay cycle - payroll - AU

2012 Spotlight Workpapers - tax preparation - New Zealand

2018 Hubdoc - data capture - Canada

2018 Instafile - tax preparation and filing - UK

2020 Waddle - invoice financing - Australia

2021 Planday - workforce management - Denmark

2021 Tickstar - e-invoicing - Sweden

2021 Locate Inventory - inventory - USA

2021 Taxcycle - tax preparation and filing - Canada