Each business is unique and many factors need to be taken into account when selecting accounting software which best suits your business. All accounting software will handle the basics of accounting and produce accounts, but they vary in their functionality and how much they can do.
Xero is a cloud-based software which is perfect for small and medium businesses, sole traders, start-ups and freelancers. It is specifically designed as a simple accounting software which provides users with the tools they need to handle all the basic accounting functions at a reasonable price. This includes creating purchase orders, managing expenses, and viewing cash flows, transactions and account details.
However, that does not mean it lacks quality or the features you need. On the contrary, its features of asset management, invoicing, and multi-currency support may also prove useful for slightly larger businesses which have international partnerships.
1. Ease of Access
Xero is a single program with three different pricing plans; Starter, Standard, and Premium. You can select the plan based on the features that best suits your business needs.
Access to Xero is easy because it is compatible with both Windows and Mac, so anyone can use it. It also has a mobile app which is compatible for both Apple and Android. The app is fast, responsive, and intuitive. It is ideal for busy people on the go.
A useful feature for any business is that Xero also has unlimited user access for free. That means not only select people in your company can have access, but you can collaborate online with accountants and bookkeepers and everyone will be able to see your financial data in real time.
2. Ease of Use
For people who like visual cues, Xero is ideal. One of its key features is a customisable dashboard where you can get a very quick idea of your current financial situation with simple charts and graphs. You can monitor your bank account, credit card and PayPal accounts, or quickly see how many invoices are outstanding, or monitor your sales and spending.
The software is simple, but it still achieves enormous flexibility to the user by offering integration with over 800 third party software and apps. There are POS apps, payment apps (such as GoCardless, Stripe, credit card, or online payment), scanning apps for bills and receipts, CRM accounting, and many more.
3. Simultaneous Reporting
Xero allows you to run multiple reports at the same time. You don’t have to wait until the end of the month to find out how your business is performing. You can view and share interactive sales, inventory, budgets, statements of income and cash flow, and your balance sheet in real time.
There are over 55 accounting reports available, but you can still customise them further to suit your business and save them as a default. That way you can run them and get updates whenever you want. Columns, formulas, blocks of text and drag-and-drop accounts can all be customised.
Comparing financial performance against actual or selected periods is especially useful to provide an indication of how your business is doing at any one time.
4. Multi Currency
Many businesses these days have a component of international trade, even small businesses. Xero’s Premium Plan features software which will allow you to get paid in over 160 currencies. You can not only accept payments and receive bills in another currency, but you can also send invoices, quotes and purchase orders in another currency. Xero’s multi-currency feature provides excellent flexibility and can save you a lot of hassle and time when dealing in other currencies.
All foreign currency transactions are converted into Australian dollars in real time. Foreign exchange rates are updated hourly through XE so you know instantly how foreign income and expenses are affecting your cash flow.
If you have an overseas partner that you regularly deal with, Xero allows you to add a default currency to a specific contact. All quotes, purchase orders, invoices and bills will default to that currency.
Xero will also automatically create an invoice using an automatic exchange rate. But if you want to customise an invoice, you can also enter your own rate manually if you wish.
If there are some transactions you do not wish to convert into Australian dollars, you can also add foreign currency bank accounts into Xero.
You can customise your invoices in Xero with your logo and details. Xero allows you to send invoices and accept online payments through debit and credit cards, and other payment gateways such as PayPal. The advantage of online payment gateways is that you can receive payments up to 35% faster than waiting for bank transfers. It also allows your customers to process their expenses quickly.
Instant payment options work better with online invoicing. You can set up your invoices to include an option to click ‘pay now’. Xero will also allow you to see when invoices have been opened by your client.
Accounting information is probably the most sensitive information you can put online, so accounting software needs to be secure. Xero began as an online platform, and its security is excellent.
Xero proudly boasts high levels of online security:
• Xero is certified as compliant with ISO/IEC 27001:2013 which is globally recognized as the premier information security management system (ISMS) standard.
• Xero has produced a Service Organization Control (SOC 2) report which is the result of an independent auditor’s examination of Xero’s cloud-based accounting system.
• Xero complies with the Payment Card Industry Data Security Standard (PCI DSS) to level 3 (PCI DSS v3.2, SAQ A).
It is always wise to speak to your accountant to find out which accounting platform your accountant uses and which one they recommend for you. But if you’re looking for something simple that will cover your business needs, Xero is definitely worth investigating.