Xero Accounting Software for Small Business: Key Features

Richard Darcy

Xero accounting software is perfect for small businesses, sole traders, start-ups and freelancers. By design, it is a simple accounting software that handles all the basic accounting functions a small business needs, at a reasonable price. However, that does not mean Xero lacks the quality or additional features a small business might need as it grows. In addition to handling the basics – such as creating invoices and purchase orders, managing business expenses and cash flows – Xero accounting software can also help small businesses with asset management and doing business internationally.

Xero offers the flexibility of three different pricing plans: Starter, Standard, and Premium. You can select a plan based on the features you need for your business, as and when you need them. Each business is unique. You will need to take many factors into account when selecting accounting software that will best suit your small business. Our bookkeepers have detailed knowledge of the most popular small business accounting software offerings in the marketplace, including Xero. Call us on 1300 728 875 or send us a message to discuss your needs.

Features of Xero Accounting Software

1. Ease of Access

You can always access Xero easily, thanks to the fact that it is a cloud-based accounting software. It is compatible with both Windows and Mac, and there’s also a mobile app for both Apple and Android. The mobile app makes it convenient for small business operators who aren’t always in the office to manage their finances and accounting on the go. A useful feature for small businesses is that Xero allows unlimited user access at no additional charge. This means you can grant access to your external accountant and/or bookkeeper. They’ll be able to see your financial data in real time. No more emailing Excel spreadsheets and reports containing sensitive financial information!

2. Ease of Use

The software is simple to use but it provides enormous flexibility by offering integration with over 1,000 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. Xero processes every financial data you input and provides intuitive and elegant visual metrics. These allow you to weigh your business’s performance against the standard financial ratios. This includes gross profit and debt to equity among others. This way, you get a general view of how your business is doing. All in one go.

3. Real-Time Monitoring Dashboard

For people who like visual cues to understand the numbers, Xero is ideal. One of its key features is a customisable dashboard where you can get a very quick snapshot of your small business’s current financial situation with simple charts and graphs. You can monitor multiple bank accounts, quickly see how many invoices are outstanding, and keep track of your sales compared to expenses. Xero’s real-time monitoring dashboard even lets you view the contact details of debtors with just one click. Overdue invoices, bills, and account receivables are now safely a thing of the past. Up-to-date data charts on the monitoring dashboard allow you to see where your money is. This will help you make better decisions. With the real-time monitoring dashboard, you can collaborate with your accountant or bookkeeper so you can better assess the accounts you value the most.

4. 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 small business and save them as a default. That way, you can run them and get updates whenever you want. You can customise columns, formulas, blocks of text and drag-and-drop accounts. Xero also boasts report snapshots that allow you to track financial information changes. You can export reports to Microsoft Excel or Google Docs. It will even maintain the formatting and formulas, giving you the flexibility you need. Comparing financial performance against actual or selected periods is especially useful to provide an indication of how your small business is doing at any one time.

If you want personalised support with Xero, our experienced and certified Xero bookkeepers can help. Give us a call at 1300 728 875 or fill out a contact form to get started.

5. Multi-Currency Accounting

Many businesses these days have a component of international trade, even small businesses. Xero’s Premium Plan provides multi-currency functionality, with the option to choose from over 160 currencies. Not only can you accept payments and receive bills in another currency, you can also send invoices, quotes and purchase orders. Xero’s multi-currency feature provides excellent flexibility and can save you a lot of hassle and time when dealing in other currencies. Xero will convert all foreign currency transactions 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 for that contact will default to that currency.

Screenshot of Xero's Partner Ledger page. In the example shown, there's a spreadsheet showing eight transactions for one account in a mix of three different currencies. The account name "The Jackson Group" is highlighted. The three currencies (EUR, INR and USD) are all highlighted, too. Finally, the total amounts of debit, credit, and balance are highlighted. It's drawing attention to the fact that all transactions are documented in the original currency but then are converted automatically to show the total debit, credit and balance amounts in the user's currency.

Xero will also automatically create an invoice using an automatic exchange rate. However, if you want to customise an invoice, you can also enter your own rate manually. If there are some transactions you do not wish to convert into Australian dollars, you can also add foreign currency bank accounts to Xero.

6. Invoicing

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 to clear. 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 your client has viewed their invoices.

7. Security

Accounting information is probably the most sensitive information you can put online, so accounting software needs to be secure. From the outset Xero started 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 recognised 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).

Your Experts in Xero Accounting Software for Small Business

As you can see, Xero has many features and flexible options to make managing the accounts of a small business easier. If you’ve decided to go with Xero, our team of bookkeepers can help you get set up and even provide training. Call us on 1300 728 875 or send us a message to discuss your needs.