At CFOcus we're frequently asked by clients to recommend an accounting software package. This can either be micro businesses that are growing up, and can no longer afford to rely on Excel and paper records to run their finances with. Alternatively, it can be more established SMEs which have survived with their existing accounting package for years, but realise it isn't working for them.
The things we rank most highly when assessing products and making recommendations to SMEs are affordability, and ease of use. Some of our smaller clients don't even have a bookkeeper, not even a part time one. They tend to look for a solution they can hit the ground running with. Understandably they don't want to be distracted from managing their business.
Xero is our go-to product. I've personally helped two businesses implement the software in the past six months, and both have been delighted with how quick and painless the process has been.
Xero is a cloud-based accounting software product. It's been around for more than a decade, and has apparently already processed more than $1 trillion in transactions across the world. IT was developed in new Zealand, but is now enjoying increasing success in Australia and the US. It's been designed specifically for small business, so keeps things simple and intuitive, and has 24/7 support, with email and phone call-backs.
At the entry-level price of $25 per month, you're limited to only 25 invoices and one person's payroll, so realistically unless you are a small trader with little activity you'll be looking at the $50 or $60 per month options, which allow unlimited invoices and payroll.
Xero is constantly updating - with 1,400 product updates in the past twelve months. What's more, as it's cloud-based these updates all happen in the background, no going offline while your download large update files.
It integrates with Office 365, and allows you to view email messages from your contacts alongside their transactional history in Xero.
It also takes direct bank feeds from your online banking, so you can seamlessly import bank transactions into your books, and simply allocate the items as required. You can also customise your own set of rules to get Xero to automatically match bank transactions to outstanding invoices and bills.
All invoicing is paperless. When you issue an invoice to a customer, it emails them a link to click on, which takes them to a pdf copy of the invoice to download. You can track if and when the invoice has been received and opened. The invoice also incorporates a 'Pay Now' button, allowing payment by credit card or Paypal.
The other attractive thing about Xero is that it is design-led. This means that the user experience has been prioritised from the outset. It has a certain simplicity and is intuitive to use. These features are hard to back-fit into a product. You either build it in at inception, or you're stuck with a cumbersome and unfriendly user-experience for the life of the product.
The best feature for me is the Xero app marketplace. This is a platform where you can search through over 500 separate applications, all perfectly integrated with Xero. There are apps for ecommerce, time-tracking, payroll, etc. The apps are reviewed so you can make sure you are picking the best for your needs.