A review of cloud accounting software: Xero
From time to time we take a look at our internal accounting processes. Just recently we started looking at a better way of organising our accounts. Having spoken with our accountants they recommended we looked at Xero Accounting which was a bit of a shock, but what a great recommendation that was!
Probably like any business we had been using Sage for sometime and had moved over to Sage One which is their online and cloud based offering. We had been struggling with using it and had the intention of going back to desktop Sage as this seemed a quicker way of keeping on top of our purchase and sales receipts. We'd been using Zoho Invoicing for our client invoices as this gave us the chance to record time and billing via an iPhone when out and about, however that was starting to get complicated in terms of reconciling bank accounts which is what led us to start looking at things in closer detail.
So, let' dive in a little deeper and take a look at the stand out features of Xero and why we feel it's better than Xero.
Accounting Made Simple
One of the first things you'll notice with Xero is that it's so simple to setup and start using straightaway. You'll be diving into creating invoices and logging receipts in super fast time. Not only that, but your accountant can be given a login and they'll be able to help you no matter where they are!
If you want to manage your payroll then Xero lets you do that as well. Alternatively you can get your accountant to manage this on your behalf via Xero which means your accounts are always up to date and able to give you real-time information, your HMRC PAYE liability and also your VAT.
It's so simple to use we felt that we had missed something, but having checked with the accountant we had been right all along and it is that simple to use.
Xero is built with integration in mind. In their Market Place you will find a number of third-party apps such as Teamwork and PayPal, so you can bolt other applications directly into your accounting platform to ensure things remain seemless across your business.
For an agency such as ours the ability to plug our project management platform directly into Xero is a great help. This will mean that when projects are completed we can finalise the project in our software and generate an invoice to our client. This will be logged in Xero and then the bill will become a balance due, so we can track payment etc. This is the perfect solution for any agency who operates PM software to help in managing their projects and also want to keep on top of billing those "can you just" hours that can make you lose money on a project.
A great dashboard
Understanding the important financial facts about your business is extremely important. Xero offers you a great dashboard where you can dive into the detail if you want to, but also stay at the higher level of data so you can get an overview on your finances.
We would love to be able to customise the dashboard, but based on what we have seen so far that isn't possible. Saying that we know that the team behind Xero are keeping on top of it's development so we hope to see this soon. However the current dashboard is perfect and much better than Sage One's weak and soulless approach of high level statistics.
Sage Line 50 used to cost a business a lot of money, and moreover you needed the support which was costly to ensure that you were able to ensure it was working as it should. Sage One adopted a monthly approach, but the costs are still higher than Xero so this alone makes it stand out for most SME's.
Paying monthly for software is now commonplace. It keeps you up to date with the latest version and also ensures you get continued support direct from the supplier. Your accountant will most likely be using Xero themselves and so having that monthly fee is something they will love as well...it keeps you in control of your cashflow rather than huge upfront payments.
Automatic Bank Reconciliation
We hate bank reconciliation - it's soo boring! However Xero actually makes it a breeze. You will be able to link your bank accounts directly to your Xero account and then you'll be prompted to reconcile any debits or credits. The process is simple and will quickly highlight a purchase you have made that hasn't got an associated record in your accounts. This is a great feature and one we fell in love with quickly.
Our overall opinion
It's amazing, simple and quick to use. In no time at all you'll be flying through your accounts wherever you are. The iPhone app is one we have tested and it's simple to use and you're able to invoice directly from it. Our advice is, give it a trial. There is no harm in checking this out even if you have signed up for Sage One already.