Why choose Xero Cloud Accounting Software

18th October 2017

Accounting software can be a valuable asset to any small business, automating many of the functions that would otherwise take time, money and effort away from other more important functions for your business’ longevity and success.

Sticking to the same old ledger and spreadsheet accounting when there are so many other options out there could be hurting your business, but making the switchover can be daunting, especially when there are now so many options out there.

The first thing to do is choose a cloud accounting software. Unlike your traditional desktop accounting software, cloud accounting software has a number of features that can streamline your accounting procedures, especially within small businesses. Allowing you to work smarter, faster and better, with little investment.

You can use cloud-based software from any device with an internet connection. Online accounting means small business owners stay connected to their data and their accountants. The software can integrate with a whole ecosystem of add-ons. It’s scalable, cost-effective and easy to use.

“But not all cloud accounting software is made equal.”
Andy Hyland

Of all the software on the market, there are three, including Xero, that are constant favourites of accounting professionals and small businesses alike.

It’s vital that when you choose an accountancy software, you make sure that you get a package that most compatible with your needs. Although most small businesses would benefit from using either of the three software, we believe that Xero is the right choice for your business, and we’re going to demonstrate why.

With a combination of functionality, easy interface, valuable features and intelligent automation, for small businesses, Xero is second to none.

For the sake of fairness, and transparency, we’re going to not only demonstrate why we love using Xero (and you should too) but compare it against some of the unique features and specifications of the other two leading software. So when it comes to choosing the right accounting software, you can make the best decision for your business.

Sage One Vs. Xero

Sage is one of the oldest accounting software on the block but has kept up with competition from younger and hotter software, like Xero, remarkably well.

Sage One is one of the more popular recent iterations of Sage accounting software, boasting all of your standard cloud accounting features, such as:

  • Customer and vendor management
  • Task management
  • Project tracking
  • Income and expense tracking
  • Accepts online payments through Sage Payment Solutions or PayPal
  • Cash flow management
  • Create and send online invoices
  • Link to financial institutions (over 12,000 institutions supported)
  • Multiple user support

You can search and contact customers directly from your device, send and process quotes and invoices as you go and link in with map apps to find your way to your customer’s offices.

It’s generally well presented, with a relatively appealing dashboard, inclusive of expense tracking and cash flow, including forecasting.

However, although Sage One is a great basic cloud accounting package for entrepreneurs and small businesses, it can be quite simplistic. Whilst it offers basic income and expense tracking, it doesn’t offer a tremendous amount of functionality and does not include features such as payroll, purchase orders, or time billing, which Xero does. In contrast to Xero, the reporting in Sage One is minimal.

Whilst Sage One does take credit and direct debit payments, unlike the easy integration Xero, it is only through a hidden away add-on in Sage Pay, which you must find and install separately.

Still, there’s no doubt that the core Sage Accounting offers good value. Just £10 per month – for the first three months at least, after that it rises to double – gets you modules to manage quotes, invoices, handle and submit VAT online, smart bank feeds and reconciliation, cash flow forecasting, some detailed reports, multiple currency support, project tracking and more, all available from your desktop or via a mobile app.

QuickBooks Online Vs. Xero

Just like Sage, Intuit’s QuickBooks has been around the accounting software industry since the dawn of the computer, but it’s latest versions are as up to date as any market newcomer. Popular for its wealth of features and a user-friendly interface, QuickBooks has dominated small business accounting programs and continues to be used widely across start-ups and SMEs.

QuickBooks comes in both desktop and online versions, and while both include income and expense tracking, invoicing and online bank feed linking, the rest of the features are staggered across various price points. So, for businesses on a budget, your opinions within QuickBooks will be quite limited.

Whilst the cheapest version of QuickBooks – the Essential’s plan totalling around £10.50 a month – includes; invoicing, expense tracking, payment handling (with a 2.70% transaction fee), and the tracking and calculating of VAT. For additional features such as managing payroll and pensions, you will have to pay an additional hidden cost.

Moreover, unlike Xero, the number of users allowed access to your financial data, even on the most comprehensive QuickBooks plan, is limited. The Essentials versions allow access for up to 3 users, and the Plus version adds purchase order handling, inventory tracking, and access for up to 5 users. The Enterprise plan allows up to 30 users.

Just like Xero, there are a plethora of apps to add more features: inventory management, Shopify integration, job scheduling, CRM and more. However, these can be expensive, with many services cost more than QuickBooks itself.

One positive is that for businesses already using QuickBooks desktop, it is fairly easy to migrate your data onto the online version, however, it is also equally as easy to transfer your data across to the Xero software. As Xero offers a handy “convert your QuickBooks files” service to help you get started.

Xero

So, what exactly is so special about Xero accounting software?

Just like Sage and QuickBooks, Xero also splits its features across various price plans, however even on the most accessible plan – at the lowest price point of the three accounting software – it offers more functionality than either.

There are three pricing plans available:

  • Starter: Suitable for contractors/freelancers who have a low number of monthly transactions — a maximum of 5 invoices, 5 bill payments, and 20 bank transactions.
  • Standard: Suitable for most small businesses — unlimited monthly invoices, bill payments, and bank transactions.
  • Premium: Includes support for multiple currencies.

Xero’s Starter plan comes in at a low £8 a month, and whilst this service is limited in terms of the number of invoices and payments you can send, for small businesses it still offers the same smart expense management and tracking, configurable reports, budgeting and unlimited users, as the more expensive plans.

If you need greater invoicing, billing or banking capabilities, the Standard plan, at £17 a month, totally exorcises those problems and includes a payroll and attendance tracking system; the Premium plan upgrades your support for multiple currencies.

What Xero does so well above the other software is to integrate itself seamlessly into the daily function of your business.

Xero is easy to setup and use. You can start using the software with only a bank balance and without having to go through the full set up process, which is great if you haven’t got a great timescale. Or, you can choose to become a Xero partner and take advantage of free training and certification, ongoing support and countless online resources about your business as a whole, not just your accounting.

One of the benefits of using Xero is that it encompasses your business as a whole, not just the numbers. As well as streamlining banking processes such as reconciliation, cash coding and bookkeeping, Xero takes care of the rest of your business too. Xero’s in-App ecosystem can completely transform the way you interact with your clients, from sending personalised online invoices to paying directly within the app – totally automating those time consuming and repetitive admin tasks so you can focus your attention elsewhere.

Not only on the client side either. Xero can break down your financial data as specifically as you need it to, so if you need to find out what item is selling best in specific stores and at what time of day, Xero can break down those different data streams into manageable groups. So you can action that insight in real-time.

Above all, Xero is totally scalable, with no hidden extra cost to up or downgrade your plan, at any point in time. Xero can grow as and when you need it, from an idea at your kitchen table to filling in an advisory role, with a multitude of options in terms of size and functionality, from ledgers to cash books. And, with all functions available across Xero’s excellent Android and iOS app, you can really use it anywhere, anytime (with 24/7 email and live chat support and outbound phone assistance at no extra cost).

Plus, it’s one of the only accounting software that is fully featured on Mac and PC.

Ultimately, choosing a cloud accounting software for your business should come down to what best fits its specifications. But, with a celebrated (and now already surpassed) 1,000,000 users this year, over 500+ integrated apps, a fully scalable price point system and continual updates which far surpass the software of its competitors, we can’t think of a business that Xero would not fit.

If you’d like to find more about why Xero is the right fit for your business, don’t hesitate to call one of our trained Xero accountants on 01634 540040 or contact us at contact@aktax.co.uk.

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