Xero

Xero is cloud-based accounting software for small businesses and their accountants. It handles bank reconciliation, invoicing, bills, expenses, payroll in some countries, inventory and financial reporting, all in a web and mobile app that business owners and advisers access together. Xero was founded in New Zealand and became one of the early leaders in cloud accounting, building strong market positions in New Zealand, Australia and the United Kingdom, where it is used by a very large number of small businesses and accounting practices. Its approach emphasised collaboration between business owners and accountants in the same online ledger, rather than sending files back and forth. Bank feeds are central to the experience. Transactions flow in automatically from connected accounts, and Xero suggests matches against invoices, bills and rules, so reconciliation becomes a quick daily or weekly routine. Invoicing supports online payments, recurring invoices and automatic reminders; bills can be captured from email and paid in batches; expense claims are managed from a mobile app; and reports show profit and loss, balance sheets, cash flow and budgets. Plans include unlimited users, which differs from competitors that limit or charge for additional users. Xero supports tax compliance in its key markets, such as digital VAT filing in the UK, and payroll in several countries. A large marketplace of integrations connects Xero to payments, e-commerce, point of sale, inventory, CRM and practice management tools, which lets businesses build a broader financial stack around it. Xero is a subscription priced by plan, with some features such as multi-currency or projects on higher tiers or as add-ons. In the United States, its market share is smaller than QuickBooks, which affects how many local accountants use it. Alternatives include QuickBooks Online, the US market leader; FreshBooks for invoicing-focused service businesses; Sage for established businesses in the UK and elsewhere; Zoho Books for value; Wave for free basic accounting; and MYOB in Australia and New Zealand. Choose Xero when you want collaborative cloud accounting, especially in the UK, Australia or New Zealand.