Xero

What is Xero

Xero is cloud accounting software designed for small businesses, sole traders, and accounting practices. The platform runs in the browser and through mobile apps, and it focuses on day-to-day bookkeeping tasks such as invoicing, bank reconciliation, expense claims, and basic financial reporting. Xero emphasizes collaboration between business owners and their accountants or bookkeepers by providing shared access and advisor tools.

Xero is used globally and, according to company materials, is adopted by millions of subscribers. It supports multiregional features such as multi-currency and region-specific payroll, and it exposes connectors for banks so transactions can be imported automatically. The vendor maintains different feature sets by region to meet local tax and payroll requirements.

Because Xero is cloud-native, it removes the need to maintain local software installations and backups. Data is stored by Xero and accessible from any internet-connected device. That architecture also enables integration with a large marketplace of third-party business apps for inventory, CRM, point-of-sale, ecommerce, and time tracking.

Xero features

What does Xero do?

Xero covers the core set of bookkeeping and accounting features small businesses need to operate day-to-day. Key capabilities include bank feeds and automatic reconciliation, customizable invoicing, accounts payable and receivable tracking, cashflow dashboards, and baseline financial reports such as profit & loss and balance sheets. The platform provides templates and workflows so businesses can issue quotes, convert them to invoices, and track payment status.

Beyond core bookkeeping, Xero offers payroll functionality in markets where payroll compliance is supported, basic inventory management for product-selling businesses, project and job costing modules for service businesses, and expense capture tools for employees and contractors. Xero's mobile apps let users create invoices, reconcile bank transactions, and capture receipts on the go.

Xero places emphasis on collaboration with advisers: accountants and bookkeepers can connect to a client’s organization to review books, create reports, and work together on tax filing and compliance. The platform includes practice-management features for accounting firms, such as client lists, roles and permissions, and bulk actions that simplify bookkeeping workflows across multiple clients.

Integration is a major part of Xero’s value proposition. The Xero App Store lists hundreds to thousands of add-ons across categories like payments, payroll, inventory, POS, and ecommerce. Integrations use APIs and prebuilt connectors so that a business can pair Xero with systems like payment processors, point-of-sale terminals, or CRM tools.

Security and access controls are integral: Xero offers role-based permissions, two-factor authentication (2FA), HTTPS/TLS encryption for data in transit, and other controls typical of enterprise-grade cloud applications. For technical teams, Xero documents its security posture and compliance details on its official site.

Xero pricing

Xero offers these pricing plans:

• Starter: $29 USD per month (approximately $348 per year) — good for sole traders, new businesses, and the self-employed
• Standard: $46 USD per month (approximately $552 per year) — accounting tools for the self-employed and growing businesses
• Premium: $69 USD per month (approximately $828 per year) — suitable for established businesses of all sizes

Xero also offers a 30-day free trial at $0 to let new users evaluate the product without providing payment details. Check Xero's current pricing options at their official pricing pages for regional details and any promotional offers: https://www.xero.com/pricing/.

Pricing shown here is USD and reflects the published monthly list prices; Xero supports both monthly and annual billing in many regions and may display different rates and feature bundles by country. For precise, region-specific rates, discounts for yearly billing, and enterprise purchase options, consult Xero’s regional pricing information. Visit their official pricing page for the most current information.

How much is Xero per month

Xero starts at $29/month for the Starter plan. That entry-level plan is aimed at sole traders and micro-businesses and provides a subset of the full Xero capabilities suitable for simple bookkeeping.

How much is Xero per year

Xero costs $348/year for the Starter plan when multiplying the monthly price by 12; Standard and Premium annual equivalents are about $552/year and $828/year respectively based on listed monthly rates. Actual billed annual rates and any discounts for annual commitments are shown on Xero’s regional pricing pages.

How much is Xero in general

Xero pricing ranges from $0 (30-day free trial) to $69/month for the primary public plans in USD. The platform offers tiered plans to match business scale and feature needs, with additional costs possible for payroll by region, premium add-ons, and partner services. For complete and current pricing, consult Xero’s official region-specific pricing pages.

What is Xero used for

Xero is used primarily for bookkeeping and financial administration in small businesses and by accounting practices supporting those businesses. Business owners use Xero to issue invoices, receive and reconcile bank transactions, manage bills and expenses, and produce standard reporting needed for tax filings and management decisions. The platform supports cashflow visibility through dashboards that combine bank balances, unpaid invoices, and bills.

Accountants and bookkeepers use Xero to collaborate with clients, perform regular reconciliations, prepare financial statements, and advise on tax and payroll. Xero’s practice features and partner programs make it straightforward for advisors to manage multiple clients and provide value-added services like tax prep, payroll processing, and advisory reports.

Industry-specific usages include retail and ecommerce merchants who connect Xero to point-of-sale and order systems, service providers who track time and project costs, and construction or trades businesses that use job costing to track profitability at the project level. Integration with payment providers, expense-tracking apps, and inventory systems makes Xero useful across many common small-business workflows.

Pros and cons of Xero

Pros:

• Cloud-native access that removes local backup and update overhead, enabling access across devices and locations.
• Strong bank feed and reconciliation capabilities that reduce manual data entry and speed bookkeeping tasks.
• Robust app ecosystem and open APIs that allow businesses to extend Xero for payments, POS, ecommerce, payroll, and inventory.
• Advisor-friendly features that let accountants and bookkeepers collaborate directly with clients and offer practice management tools.

Cons:

• Certain advanced features such as full-featured payroll, inventory management, or advanced reporting may vary by region or require higher-tier plans or add-ons.
• Businesses with complex enterprise needs (like heavy multi-entity consolidation or advanced manufacturing ERP requirements) may outgrow Xero and need larger ERP systems.
• Some users report a learning curve for setup and for configuring integrations correctly; onboarding support or a bookkeeper may be necessary for first-time users.

When evaluating Xero, consider your local payroll and tax requirements, the number of users and connected apps you need, and whether features like multi-currency or inventory are included in the plan you select. Budget for potential add-on services such as payroll modules, payment processing fees, and third-party integrations.

Xero free trial

Xero offers a 30-day free trial at $0 that provides temporary access to the product so businesses can test core features before purchasing. The trial typically allows you to set up your organization, try invoicing and bank reconciliation, import data, and explore integrations. No credit card is required to start the trial in regions where this policy applies, which lowers the barrier to testing the software.

During the trial period, Xero provides online help resources and support documentation, and users can follow guided setup flows to connect bank feeds and import contacts or prior accounting data. For many small businesses, the trial is sufficient to verify that Xero supports their invoicing and reconciliation needs.

At the end of the trial, users are required to choose a paid plan to continue using Xero. If a business is working with an accountant or bookkeeper, they may receive assistance to choose the appropriate plan level and implement migration of historical data. Trial availability and conditions may vary by country, so check the regional signup process for exact terms.

Is Xero free

Yes, Xero offers a 30-day free trial at $0. The trial provides temporary, full-featured access for evaluation but is not a permanent free tier. After the trial, continued access requires selecting a paid subscription.

Xero API

Xero exposes a public REST API that developers and partners use to integrate accounting workflows with external systems. The API covers core accounting entities such as contacts, invoices, payments, bank transactions, items, and reports. Xero uses OAuth 2.0 for authentication and provides SDKs for popular programming languages to simplify integration work.

The developer site includes API reference documentation, sample apps, and guidelines on rate limits, webhooks, and error handling. Common integration patterns include syncing invoices and payments between ecommerce platforms and Xero, posting payroll and time entries into accounting records, and pulling financial reports for dashboards and BI tools. See Xero’s developer documentation at https://developer.xero.com/ for complete technical details.

Xero also supports partner programs for accountants, bookkeepers, and app developers that facilitate listing integrations in the Xero App Store and getting technical support during integration. Some endpoints and APIs are region-specific (for example payroll APIs), so integrators should verify which features are available for the target country.

Security for API access follows industry standards: OAuth 2.0 token flows, secure transport (HTTPS), and app registration controls. Developers should follow best practices for token storage, refreshing, and scoping to limit access only to required resources.

10 Xero alternatives

When comparing accounting systems, consider the target business size, required features (payroll, inventory, multi-entity), and integration needs. Below are common alternatives across paid and open-source categories.

Paid alternatives to Xero

• QuickBooks Online — Cloud accounting with a broad feature set, strong payroll integration in North America, and a large marketplace of accountants and advisors.
• FreshBooks — Invoicing-first accounting designed for freelancers and service businesses, with simple time tracking and client billing workflows.
• Zoho Books — Part of the Zoho suite; integrates tightly with CRM, inventory, and other business apps and is competitively priced for small businesses.
• Sage Business Cloud Accounting — Scales from small business bookkeeping to more advanced financials and payroll in supported regions.
• MYOB — Popular in Australia and New Zealand, offering accounting and payroll solutions tailored to those regional requirements.
• Kashoo — Simple cloud accounting for small businesses needing straightforward bookkeeping and invoicing.
• Wave — Free core accounting and invoicing with paid add-ons (payments, payroll) — a budget-friendly option for very small businesses.

Open source alternatives to Xero

• GnuCash — Desktop double-entry accounting with personal and small-business features; suitable for users comfortable with a locally installed app.
• ERPNext — Open-source ERP with accounting, inventory, manufacturing, and CRM modules suitable for growing small businesses needing an integrated system.
• Odoo (Community Edition) — Modular open-source business suite that includes accounting as one of many applications; requires self-hosting or an Odoo partner for setup.
• LedgerSMB — Open-source accounting and ERP focused on secure multi-user accounting for small- to mid-sized organizations.
• FrontAccounting — Lightweight open-source web-based accounting system for small businesses with multi-currency and basic inventory features.

Frequently asked questions about Xero

What is Xero used for?

Xero is used for cloud-based bookkeeping and accounting for small businesses and advisors. It lets users create invoices, reconcile bank transactions, track bills and expenses, run payroll where supported, and generate standard financial reports needed for tax and management purposes.

How does Xero connect to my bank?

Xero uses bank feeds to import transactions automatically. Most supported banks offer direct feeds or secure feeds via third-party providers, and imported transactions can be matched or reconciled against invoices and expenses inside Xero to reduce manual entry.

Does Xero offer payroll?

Yes, Xero offers payroll in regions where it supports local payroll compliance. Payroll functionality varies by country and covers employee pay runs, tax withholding, and statutory reporting where available; check the regional product details for exact payroll features.

Can Xero integrate with ecommerce and POS systems?

Yes, Xero integrates with many ecommerce platforms and point-of-sale systems through prebuilt apps and APIs. The Xero App Store lists connectors for popular platforms so orders, payments, and inventory movements can be synchronized with accounting records.

Is Xero secure for storing financial data?

Yes, Xero employs industry-standard security measures. The service uses encrypted transport (HTTPS), role-based access controls, two-factor authentication options, and documented security practices to protect customer data.

Why choose Xero over desktop accounting software?

Xero provides cloud access and automatic backups, reducing local maintenance tasks. Users can access data from anywhere, collaborate in real time with advisors, and leverage automatic bank feeds, which together reduce manual bookkeeping and support remote work.

When should a business move from Xero to a larger ERP system?

When accounting needs include complex multi-entity consolidation, advanced manufacturing, or deep warehouse management, businesses should evaluate ERP systems. Xero suits many small-to-midsize companies, but fast-growing firms with complex operations may need more comprehensive ERP functionality.

Where can I find Xero training and support?

Xero provides documentation, video tutorials, and an online help center. Paid plans and partner arrangements also permit access to adviser support and onboarding assistance; many accounting firms provide Xero-specific setup services.

What integrations does Xero support?

Xero supports hundreds to thousands of third-party apps across payments, payroll, POS, inventory, and CRM categories. Integrations are available through the Xero App Store and via the public API for custom integrations.

Does Xero have an API for developers?

Yes, Xero provides a public REST API with OAuth 2.0 authentication. The API covers invoices, contacts, bank transactions, items, and reports, and Xero maintains developer documentation and SDKs to help developers integrate external systems.

Xero careers

Xero hires across product, engineering, customer support, sales, marketing, and accounting advisory roles. The company maintains regional offices and a global remote hiring footprint, and it posts openings on its careers site. Candidates typically encounter role descriptions that emphasize cloud product experience, collaborative skills, and domain knowledge in accounting or fintech. See Xero’s careers site for current openings and role requirements: https://www.xero.com/careers/.

Xero affiliate

Xero operates partner and advisor programs for accountants, bookkeepers, and app developers. These programs provide benefits such as partner listings, technical support for integrations, and marketing resources for advisors. For businesses interested in refer-a-client or partner opportunities, Xero’s partner pages explain how to join and the program tiers available: https://www.xero.com/partners/.

Where to find Xero reviews

Industry review sites and user communities are good sources for independent feedback. Consider reading Xero reviews on platforms such as G2 (https://www.g2.com/products/xero/reviews), Capterra, and Trustpilot to see user ratings and common praise or complaints. Reviews help surface practical issues such as onboarding experiences, support responsiveness, and integration reliability.