Xero is a cloud-based accounting solution, offering a wide-range of accounting features. These include invoicing, payroll, expense management, projects, reporting and financial statements, with most tasks being automated. Xero is ideal for small to medium businesses but also includes several features suitable for bigger organizations. A mobile app is also available.
As a business owner, some issues and shortages of Xero are the following:
- The Xero payment service apps allow customers to pay a business directly via Xero. However, this could result to long payment times, with money taking many days to be transferred and received. This could potentially create cashflow issues to a business, especially if it is a small one, relying on the promptness of customers’ payments to maintain sufficient funds
- Could be proven more expensive that it should for one-man business owner due to additional costs on top of the monthly fees, such as bank feeds charges. Various modules need to be purchased which results in increased fees. Cheaper alternatives could work as good
- Customer support is lacking being difficult not only to manage to contact them directly but taking too long to resolve issues. This could put a business into a bad position with HMRC for example on VAT deadlines if issues are not resolved. Or could create bad relationships with customers if reconciliations are not provided in an appropriate time period
- The new Making Tax Digital initiative by HMRC requires that all records are maintained and submitted electronically. However it appears that there are some bugs with the Xero connectivity which could potentially cause issues both in the transition state as well as in the long run
- Difficult to cancel the subscription to Xero, with the automated cancellation system via the web not working and in some cases no one returning emails and voice messages. This is not only time consuming and frustrating but it takes effort away from other meaningful business dealings
- Various errors come up while using Xero, and accounting staff spends time researching those issues and how to resolve them instead of being able to be productive and quick at their job. This could lead to overtimes which increases salary expenses for the company
- The range of reports generated by Xero are quite limited, having the need to engage employees to manually create reports needed for upper management
- Xero in general is targeted mostly to small businesses, and as a business grows it might be difficult to keep using Xero as it does not provide sophisticated accounting solutions. In comparison to other accounting systems it decreases the efficiency of the accountants in more demanding business environments, with increased time needed to perform simple tasks.