Pros / Payroll is included with its standard and premium plans.

Cons / Invoice customization isn't as intuitive as other programs; it requires you to go out of the program to make aesthetic changes.

 Verdict / Xero's full-featured accounting software is a great choice for most small businesses. It has an impressive suite of integrations that allow you to customize the program if you need additional functions.

Xero is small business accounting software. It's cloud-based and can be accessed from any computer or device with a browser. Three service plans are available for this software. All plans allow you to invite an unlimited number of users to the software, and you're able to set permissions to manage what information they can access. The starter plan includes most functions, including accounts payable, but limits you to five invoices, five bills and 20 bank reconciliations per month.

The standard and premium plans include payroll, federal and state eFile and ePay. The premium plan can handle multiple currencies, which can be useful if you have an international client base. Xero integrates with more than 500 applications, so you can add features to customize the program to your business's specific accounting needs, though some may cost extra. For its ease of use and full spectrum of accounting features, Xero earns the Top Ten Reviews Silver Award.

Accounting Functions

Similar to the other online accounting software we reviewed, it's easy to set up an account with Xero. It gives you several starting tasks to acquaint you with the program, such as connecting your business bank account, creating your first invoice and first expense claim, and so forth, and many of the pages have how-to videos and link to a step-by-step guide in case you need additional help.

The interface is well designed and easy to navigate. Features are more nested than some programs but are easy to access from drop-down menus for each tab located across the top of the screen.

The dashboard shows you graphs and charts for key information such as invoices due, bills you need to pay and a history of your bank account balance with a button telling you how many items you need to reconcile. The information is displayed on moveable cards that allow you to arrange the dashboard to your liking. The cards also have quick buttons for tasks like creating an invoice or a new bill.

Accounts Receivable

After you create a quote, you can convert it to an invoice with a few clicks. You can drag and drop invoice lines if you want to reorder them on the invoice. You can configure this bookkeeping software to generate recurring invoices, here called repeating invoices, and choose the frequency and end date.

You can also set up the software to automatically send payment reminders to customers, which can save you the time of generating these emails manually. After you receive and record a payment, you can email your customer a receipt or thank you.

At the bottom of the invoice screen, there's a History & Notes section that shows you information about the document, such as if the invoice was copied from a quote and when the invoice was created and approved. If you've sent an automatic payment reminder for the invoice, the date, time and email address it was sent to also appear on this screen. You can add additional notes, such as the expected payment date.

You can track expenses and add them to invoices to rebill to your customers, if needed. You can also attach files to invoices, which can be helpful if you need to attach a file of the work you've created or a photo of the work you completed. Xero doesn't track billable hours, but integrates with time tracking software like TSheets.

Invoice customization isn't as intuitive as other programs that have premade templates that you can tweak. Instead, it requires you to go out of the program and into Word if you want to make aesthetic changes (colors, borders, etc.). However, within the program, you can add your logo, change the font, set margins, toggle fields on and off and rename labels.

Accounts Payable & Inventory

You can use Xero to manage your vendors, create purchase orders and track inventory. When you're creating a quote or invoice, it shows you how many items you have in stock. If you enter more than this number, it alerts you with a red pop-up box. If you have complex inventory needs; for example, if you stock more than 4,000 items, there are advanced inventory integrations you can purchase. Xero can also manage fixed assets, track bills and print checks.


This small business accounting software allows you to run more than 40 different reports, including an aged receivables report and a general ledger. Many reports are customizable and allow you to change titles, rearrange columns, show a chart, set a date range and apply filters. In addition to printing reports, you can archive them or export them as PDF, Excel or Google Sheets files.

You can sync your bank and credit card accounts to this bookkeeping software, and it imports data daily. Xero has a smart reconciliation tool that matches bank transactions with those you've entered into the software and becomes able to predict more matches the more you use this feature. It also has bank rules and cash coding features designed to help make the reconciliation process easier to accomplish.

Like all of the small business accounting software applications we reviewed, Xero allows you to accept invoice payments online. Xero integrates with PayPal, Stripe, Square and more.

Access & Support

Xero can support multiple businesses for an additional fee, and a discount is available if you have multiple subscriptions. Mobile apps are available for iPhones, iPads and Android devices. You can use it to view your cash flow, access customer and vendor contacts, capture images of receipts, record expenses, reconcile transactions, create invoices and track invoice statuses.

Online business opportunities include a knowledgebase with step-by-step guides and videos, a blog, podcasts, Xero TV and Xero U, which offers video courses. It has user communities for businesses and developers. If you need to contact the company for customer support, you can reach out via email or live chat. If an issue can't be resolved over email or chat, a customer support agent may call you.

Xero protects your data with bank-grade encryption. It offers two-factor authentication to make your login more secure and allows you to set user permissions so you can control the data your employees can access.


Xero is one of the best small business accounting software we reviewed. It's well designed, easy to use and offers a full range of accounting features, making it suitable for most small businesses. It integrates with more than 500 apps, which makes it possible for you to further customize the software to fit your business's specific accounting needs. However, it lacks the ability to track billable hours, so you'll need to use a workaround or an app to the system if you need this feature.

Specifications and Benchmarks

Quick Picks

Best For
Small business
Standout Features
Bank reconciliation
Monthly Price Range
$9 - $70

Accounts Payable & Inventory

Manage Vendors
Standard & Premium
Create Purchase Orders
Standard & Premium
Inventory Management
Fixed Asset Management
Track Bills
Print Checks


General Ledger
Bank Feed
PayPal Integration

Accounts Receivable

Create Invoices, Estimates & Quotes
Convert Quotes to Invoices
Recurring Invoices
Automatic Payment Reminders
Track Billable Hours
Track Expenses
Add Expenses to Invoices
Aged Receivables Report

Accounting Functions

Ease of Use

Access & Support

Supports Multiple Businesses
Mobile App
Ongoing Business Education
Active User Community
Live Chat