B2B Martech Review: Xero Accounting Software

Xero is a popular, easy-to-use yet powerful online accounting tool for small to midsized businesses (SMBs). Its modest starting price point makes it attractive both as a first-time package for startups as well as an alternative to products like QuickBooks or Sage.

To extend its own functionality, Xero integrates with a wide range of payment processing, customer relationship management (CRM), human resource management, point of sale, eCommerce, reporting, and other systems.

As indicated by the consistent and very positive user rankings below (8.7 out of 10 overall), most Xero users are happy. More than a few are even raving fans, calling the product “fun” and “enjoyable”—not words often associated with accounting software. Xero has some limitations and drawbacks, as all products do, but is generally highly rated by users.


Xero incorporates pretty much all the features most SMBs will need, including:

Invoicing and quotes: Customize, clone, and set up recurring invoices. Add billable expenses. Accept online payments by credit/debit card or PayPal.

Expense management: Reimburse yourself or employees for approved business expenses. Keep track of all receipts for tax and billing purposes. Record expenses from anywhere using the Xero mobile app.

Bank statement reconciliation: Connect Xero to your bank and credit card accounts. Automatically match transactions. Create custom rules to simplify and accelerate reconciliation.

Purchase order processing: Create and send purchase orders. Convert purchase orders to customer sales orders for resale items. Manage suppliers, payments, and shipments.

Inventory tracking: Track quantities and value at a single location. Analyze profitability by item. Get real-time valuation of on-hand inventory.

Fixed asset management: Keep track of business assets like structures, vehicles, equipment, and machinery. Account for depreciation and disposal of assets.

Payroll processing: Track hours worked and approved leave per employee. Synchronize payroll with bank accounts to maintain an accurate view of cash on hand. Issue checks or pay by direct deposit (in select U.S. states). Automatically deduct and process applicable taxes.


Without question, the greatest strength of Xero is its ease of use. The software is designed for business owners, not professional accountants. Words like “easy,” “simple,” and “intuitive” pop up in nearly every review.

Second only to ease of use, users love the vast number of integrations Xero offers–to HR software, payment systems, CRM, and even relatively obscure industry-specific tools.

Small business accounting software - XeroThe main dashboard shows all key information—bank balances, sales, payments due, etc. —on a single screen. The extensive built-in knowledgebase and online help answer most common questions.

Finally, the fact Xero is a native cloud-based app, not ported from a desktop or client-server product, shows. It’s a true multi-user system, accessible any time from any device, with no installation or user-initiated upgrading required.

A few aspects of the product draw generally positive, though somewhat mixed, reviews:

Support: Users generally praised the quality of product support, though a few voiced complaints about the speed both of problem resolution and new feature additions.

Price/Value: Again, most users who commented about pricing viewed the product as an excellent value. But a few voiced complaints about the pricing structure, particularly as the need for more employees and features expanded.

Mobile Apps: Users generally love the iOS and Android apps, though they noted the apps are missing some functionality from the browser-based tools.

Bank Account Integration: Users generally raved about the ability to sync Xero with their bank accounts, enabling them to automatically keep cash balances up to date. But a few noted the product doesn’t work with all smaller banks.

Payroll: Feelings about this functionality were definitely a matter of perspective. Most users were thrilled to have a single system for accounting and payroll. But a few, particularly those in larger companies or with more sophisticated needs, were frustrated by the simplicity of Xero payroll functionality.


As one would expect from the high overall satisfaction scores with this product, positive reviews greatly outnumbered negative ones.

The complaints, in several cases, were the mirror image of the product’s strengths. In addition to the comments about the mobile apps, bank account integration, and payroll functionality noted above, some users bemoaned the lack of advanced features. But most users wouldn’t need these, and adding them may impact ease of use.

Some reviewers mentioned the learning curve when moving from another accounting software package—though this is likely to be the case whenever moving from one tool to another.

Finally, a few reviewers voiced complaints about specific aspects of the product, referring to the fixed assets functionality as “clunky,” expense reimbursement as “cumbersome,” and various other quirks. But even one of those who noted such issues referred to them as “minor annoyances” in an otherwise excellent product.

Third-Party Ratings

Review SiteOverall RatingNumber of Ratings
Capterra4.5 out of 5 stars505
Cloudswave87 out of 100250
DiscoverCloud8.4 out of 1011
G2 Crowd4.3 out of 5 stars90
GetApp4.4 out of 5 stars505
Serchen4.6 out of 5 stars46
Siftery83 (Net Promoter Score)465
Software Advice4.5 out of 5 stars505
Software Insider8.2 out of 1011
TrustRadius8.7 out of 10112

Bottom Line

Xero is accounting software designed for small businesses, from sole operators up to perhaps 200 employees. It shines in ease of use, if sometimes at the expense of advanced features. Given the extensive and enthusiastic support of existing customers, startups and small businesses should definitely include this on their short list of accounting tools to evaluate.


Starter (no payroll): $9 per month

Standard (payroll up to five people): $30 per month

Premium (payroll up to 10 people): $70 per month

11-20 employees: $90 per month

21-100 employees: $180 per month