Xero

It's been easier to use Xero than I expected, but I had a nasty surprise at tax time when I realized the default accounts/descriptions for expenses did not correlate 1:1 to IRS categories. (I should have checked this more closely when I set up my accounts because it's a New Zealand company, and the previous product was local.) This means I will need to double-check all my transactions for 2018 and the IRS has my vastly overestimated tax payment until I can do that and file my return on an extension.

I've had a much better experience importing data from financial institutions because Xero uses a well-known importing service that is trusted by the institutions.

I like being able to match multiple invoices to bank deposits because I usually don't run to the bank for each check. This will be more valuable as my company grows.

I should probably find an accountant to assist me with this, but I haven't found an accountant who understands both craft businesses and Xero.

Vorteile

Professional double entry software at a very affordable price
Accommodates both cash and accrual accounting
Links to financial institutions to get transactions
Uses standard importer recognized by the financial institutions instead of just trying to log in remotely (and triggering fraud alerts)
Can match multiple invoices to a single deposit transaction imported from bank
Can keep using Xero as company grows

Nachteile

Pre-existing expense categories/descriptions don't map 1:1 with IRS definitions, so I'm having to go back to all my receipts to make sure expenses are entered in proper accounts because I didn't realize this when I switched
More difficult to focus on specific expense categories to check transactions
Have not been able to import historic data from previous app (possibly because it's not double entry) so I am still paying the subscription on that software to retain access to my data
No integration with Craftybase, so I have to enter supply purchases and customer invoices there independently

Xero is an awesome bookkeeping and accounting software solution for startups and small business owners. It is indeed a good match for business owners who know nothing about accounting in order to keep their books and to properly manage their finances.

From my own experience, I found that Xero is very user-friendly and its accounting interface is streamlined, almost seamless, and uncluttered. The Demo Company is very useful as you can manipulate data without worrying about messing up vital information in your practice company.

Xero’s accounting dashboard shows the snapshot of your business (i.e., bank balances and reconciling items, outstanding invoices, and bills, accounts on the watchlist, etc.) and fully customizable depending on your needs.

Quickbooks had been the leader of accounting software for small businesses for quite some time but Xero is becoming more popular because of its competitive offering and value proposition. Xero’s starting plan is very affordable and you have the option to add-on some features depending on your need. It also offers a basic inventory and fixed asset management functionality in all of its plans, which is very cool! And the best thing about Xero is the unlimited users allowed to access the financial information.

Vorteile

- Affordable and cost less for startups and small businesses
- Includes fixed assets and inventory management in all of its plans
- Very user-friendly especially during migration or conversion of data
- Allows unlimited users
- Friendly 24/7 customer support

Nachteile

- Some countries lack a built-in payroll option.
- Customized reporting options are still limited. I wish Xero can allow you to create your own report.
- The contact list of customers and suppliers is mixed together and needs to set-up manually to organize.

I became Xero certified in 2016, I was very enthusiastic about the product at the time, and thought I would be building a practice using it. Unfortunately, the more I used it, the less well it worked for me, due to the reasons given above and more.

I also find the Xero portal for practitioners unnecessarily complex and difficult to navigate.

The company was always also assigning new account managers to me. I think I've met four or five in total.

Xero frequently asked me for feedback and I provided it several times, especially about my discontent with their reconciliation process, which I consider inadequate to my needs as a professional bookkeeper, and which I had seen cause significant problems for business owners trying to maintain their own file. Though I repeated this feedback over the course of several years, it hasn't changed. I realize I'm just one customer, and I don't know if others feel the same way or not. Anyway, in the end, I didn't want to work with this issue anymore.

Vorteile

Transaction processing in the bank feed is, as they claim, very well set up. At the time I started using Xero, the company also seemed to provide some needed competition and an alternative to intuit in the small business accounting software space.

Nachteile

The other accounting software apps I use are QBO and Wave. Both, IMO, are better than Xero.

Back to the bank feed -- Xero is unable to connect with a number of banks. In addition, the bank feed sometimes drops out transactions with no notice to the file owner or bookkeeper. Thanks to the lack of a reconciliation process tied to hard numbers, inaccuracies can pile up in the registers as a result.

In addition, overall access to data in the registers is more awkward to accomplish than in either QBO or Wave. Editing transactions is significantly more complex than in QBO. The system of comparison between the "bank statement lines" and the account register was confusing at times. And there are odd glitches in the reporting (cannot recall all the details now, I only have one client left using this app) that I had to watch out for. Xero is a product that has some really amazing capabilities mixed in with real weaknesses.

It's a lot of money to get setup with a certified consultant. Very few consultants available in Canada. When we did find one she was great but she bills you for every second she works. As in not any free advice. My lawyer is easier to work with.

Vorteile

As a former quickbooks user of about 20 years, it was a big deal to switch platforms. At first glance it looked like it would do everything we wanted. I loved the price point, the interface and relative ease of use. The multi currency was great as was the ability to integrate with Stripe. You make a lot of compromises to save on the huge monthly cost of quickbooks but there are workarounds.

Nachteile

There are so many things that are just common/must have's for any business. Things like progressive billing, job costing and even the ability to make your own journal entries are missing. We had to hire a consultant and spend around $800 just to get it to add purchases easier to the mix with HubDoc. You see job costing catagories at the invoice level but not software or 3rd party app to back it up. The single most annoying thing about it is the support. It's non existent. You complain, They tell you its not a problem and ignore your requests. I struggle daily with the search function. I can't get about 50% of my searches to work. The clients I'm looking for are entered. I'm typing them in fine but you often have to visit contacts menu and find them manually by quote number or just never ending scrolling. Upon complaining numerous times the best they can do is say "it might take up to two weeks for your contacts to sync. " Xero: It's 2020 and the dark ages of cloud software have passed. You need to fix the search function and add job costing to be considered a contender. So here we are in 2020, manually adding each of our sales to a spreadsheet and adding the subsequent bills to it to see if we made $. They make it incredibly hard to contact support and they are quite unresponsive when they do reply to your ticket. They try really hard to push you to support forums, where there are literally hundreds of complaints on the same issue with the ability to comment closed.

Overall, it's a decent program, with all the bells and whistles you'd expect from a cloud based accounting program. Unfortunately working without being able to reconcile monthly made life too difficult. And not many accountants work with it, so that made it difficult to have professional eyes on my accounting.

Vorteile

I loved how easy it was to integrate XERO with my bank accounts and Paypal. XERO seamlessly connected and kept my balances up to date. I also liked how easy it was to invoice clients and connect invoices to Paypal or Stripe.

Nachteile

Unfortunately, the reconciliation process in XERO is a no-go for me. Rather than the Quickbooks and standard approach, where you do a monthly reconciliation against a bank statement, XERO had no such function. Once an item was matched up to a bank transaction, it was considered "reconciled." No option to close out a month and double-check transactions. I went back to QBO to get that feature.