Why I Chose Xero for Accounting Software

Last year I started using Xero accounting software to manage my business consulting and web design business. The reason I chose Xero over Quickbooks was user-interface and user-experience. After trying both, I liked Xero better because the user interface is more intuitive and the application is easier to use.

Prior to using Xero, I used a combination of Excel, Mint, and Freshbooks to do accounting. While it is more expensive to pay for accounting software, there are many benefits.

Invoicing with Xero

As a Freshbooks user, my first consideration was to find software that would provide an excellent invoicing experience for me and my clients. Freshbooks is a great invoicing platform but is limited on the accounting side.

Manage Cash Flow

Invoicing may be the killer app for accounting software since I was willing to pay for that alone with Freshbooks. What makes online invoicing so great is being able to invoice by e-mail and get paid by credit card.

For my business, I get paid by the project, with deposits paid up front and the balance paid upon completion. With online invoices, it is easy for my clients to pay me, which means I can get cash in the bank within only a few days of sending out an invoice.

Customization

Other features of a good online invoicing app include being able to upload a custom logo and remove 3rd party branding from the invoices.

One feature of Xero invoicing that was a pleasant surprise is that I can include the D-U-N-S number of my company on the invoice.

Why Pay for Accounting Software

As a Freshbooks customer, I was already paying $15 a month for online invoicing. But going to $30 a month for real bookkeeping meant that there needed to be significant value in doing so. The way I thought about it was first, will Xero save me time and will the benefit be greater than the cost. 

The biggest additional benefit of using Xero accounting software is that it allows me to measure the financial performance of my business. I use it to measure financial performance versus prior periods and versus my goals.

The goals that I track in Xero include:

  • Revenue
  • Expenses
  • Income

The chart of accounts allows me to categorize revenue and expenses so that I can see how different parts of the business are performing. Like am I making more money on web design or business consulting and where is the growth. And what expenses are growing the fastest, like software subscriptions, and are there ways I can save money.

My old system allowed me to do this but it was less convenient and more time consuming, and that is why I decided to subscribe to Xero. 

Competitive Pricing

Xero Standard costs the same as Quickbooks Online Standard for small business. Both are $30 per month.

I use Swipe for my credit card merchant account on Xero and pay merchant fees of 2.9% plus $0.30 per transaction. This is slightly more expensive than Quickbooks, which only charges $0.25 per transaction.

Xero is Easy to Use

The deciding factor for me to choose Xero is that it is easy to use. I have used Quickbooks in various capacities and versions for more than 10 years and I think it is a good program. But because Quickbooks was originally designed as a packaged software hosted on a local server, not in the cloud, the online version feels clunky.

Unlike Quickbooks, Xero was born in the cloud and it feels like a native online. The Xero interface is user-friendly. It is easy to download transactions and reconcile accounts. And it produces great looking documents, like reports and invoices. 

 
 

Disclosure: My company Menadena has affiliate relationships with many of our service providers including Xero. This means we may earn commissions or other benefits by promoting our affiliates and when readers click on affiliate links and purchase products or services.