It remains to be seen if this product, which is relatively new in the US market, will scale beyond small businesses and startups and meet the needs of those on the cusp of needing mid-market style functionality.
Strengths
- Excellent ecosystem of add-ins created by startups or companies who have not traditionally had a presence in the US market, including third-party invoicing applications like Harvest which are sales and A/R subledgers designed to be operated by entrepreneurs instead of accountants.
- Automatically imports transactions from thousands of US banks securely and can automatically classify these transactions according to user-defined rules or match them to existing transactions based on amount or vendor.
- Xero is the only product included in this review which natively supports multiple currencies in its current US production version as of this writing (early December 2013).
- User interface for classifying groups of imported bank and credit card transactions in batches is excellent, and minimizes the required data entry. Batch data entry screens are as good or better than any other product reviewed for focused, quick entry of large amounts of data.
- Includes a “Xero to Xero” function which, when enabled, automatically takes invoices from the billing Xero company and imports them in as bills to be paid in the receiving company’s Xero account.
Potential Limitations
- Product is relatively new to the US market (less than three years old), and its first company-provided US payroll service was launched in early December. While the application has integrations with a wide range of add-on applications, its connections with professional tax and accounting applications are few, and those which exist require manual intervention to accomplish the desired tasks.
- Many of the add-ons for this product are designed for smaller businesses and startups instead of larger mid-market organizations.
- User interface is a forms-driven interface designed for business owners and not accountants. As a result, accountants may require some time to adjust to the menu structure.
- The current version of the reporting engine is not as mature and flexible as we might hope at this point. Functions like the ability to save filtering schemes on existing reports as a new “memorized” report are not present in the product at this time, although there are reportedly significant improvements to reporting coming in 2014.
- Some Xero partner program benefits, including free use of the Practice Manager and the upcoming Workpapers application, require the organization to have 25 or more organizations (minimum of $300/month in spending) to qualify. This may make Xero appear to be a better product for high volume write up and bookkeeping than it is for practitioners with a small number of high value virtual CFO clients.
Summary and Pricing
The Xero partner program and the introductory training is free, but not all benefits are available to new members. Some Xero partner program benefits, including free use of the Practice Manager and the Workpapers application to be released in 2Q 2014, require the organization to have 25 or more organizations (minimum of $300/month in spending) to qualify. Additionally, it costs $249 per employee to take the online training required to become a Certified Advisor ($399 for the same live training in a classroom). This may make Xero appear to be a better product for write-up and bookkeeping than it is for practitioners with a small number of high value virtual CFO clients.
Xero Business plans include an unlimited number of users, and are priced from $9 per month for a starter plan with no employees up to $180 per month for a Premium plan which supports multi-currency, payroll for up to 100 employees, direct deposit, and electronically paid and filed payroll taxes. Members of the Xero partner program are eligible for discounts based on volume, and gain access to marketing resources, management tools, and special Xero service plans for accounting professionals.
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