Business Software

Xero Review 2020: Online Accounting for Small Business

Xero is overall a great software package for online business accounting. Xero serves more than 1 million businesses globally, and its easy-to-use interface and advanced features make it loved by many small-medium enterprises (SMEs). Xero boasts great functionality: extensive reports, customisable invoices, inventory tracking, and 800+ integrations. It also has unique features like allowing you to manage fixed assets, which other competitors don’t.

Xero is really ideal for small-medium businesses that need strong accounting features, put together in a well-designed package that really helps save time on accounting.

Xero Add-Ons

Payments

You can accept online payments with Xero Payments, which are powered by Stripe. Transaction fees are 3.4% + SGD 0.50 for online payments.

Payroll

Xero comes with a helpful Payroll add-on. You can schedule automatic wage payments (weekly, bi-monthly, monthly, etc.). You can pay employees specific amounts for the type and amount of work they do (e.g. software engineers who did both coding and graphic design for a project). You can also easily reimburse employees for work expenses.

New Additions

In the latest global update in September 2019, Xero added several new features on top of its already impressive function-rich base.

HubDoc Permissions

Xero acquired HubDoc in 2018, which allows users automate manual tasks like data entry and document collection. HubDoc scans documents like your receipts and bills, automatically extracts information, and uploads it as transaction data.

Previously, if you granted employees permission to HubDoc, they were able to see all uploaded documents without the possibility of individual restrictions. Xero’s latest update allows you to set specific permissions for each user: upload only, standard, or accountant/bookkeeper.

Stripe Live Feed and Auto Pay

You’re now able to view your Stripe transactions in real-time via Xero. This allows for easy reconciliation and simple importing of transactions. You can do this even if you don’t use Stripe as a payment service within Xero’s platform.

You can also receive automatic repeat payments from customers directly with Xero. You can set up repeat invoices for customers, and your clients can save their credit card details to make automatic payments to you.

Zendesk API

If you use Zendesk to manage your support functions, you now have a really useful integration. Your support team can now input the time they’ve spent on their support tickets directly into Xero’s time tracker. Logged hours can be instantly invoiced and reported, so there won’t be double entries caused by your support team manually entering hours in their own schedules.

Xero’ Features

Dashboard

Xero’ dashboard is clean and well-designed. It gives you a quick overview of your total cash balance, invoices, owed bills, and bank balances (if you’ve connected your bank accounts). You can move these accounts around, which is nice if you want to prioritise certain information. Xero’s dashboard gets the job done by giving you the most important information about your business every time you log on.

Chart of Accounts

Xero will create a chart of accounts template for you based on your industry. You can also import another chart of accounts into Xero. The layout is clean and it’s easy to filter through the list to find specific transactions.

General Ledger

Xero’s general ledger is well laid out. Transactions are sorted by account (e.g. advertising, utilities, etc.), so it’s easy to see the overall status of major parts of your business. The general ledger shows you debits, credits, net movement, and the YTD balance. All this is helpful in quickly understanding how each account is performing, and if major inflows/outflows are occurring you can easily spot them.

Business Performance

Xero’s Business Performance dashboard gives you a comprehensive look at a wide variety of performance metrics. You can see total revenue, expenses, your top 5 customers, cash balance, payables, overdue bills, and much more. You can view many common financial metrics that gauge liquidity, efficiency, leverage, and profitability. These include Account Receivable (AR) days, Account Payable (AP) days, Inventory Turnover, Current Ratio, Debt to Equity Ratio, etc. All these metrics are presented in graph form over time, so you can easily track how your business is improving (or declining). Having a business intelligence tool like this in your accounting software is certainly helpful.

Invoices             

Xero only has 1 default invoice template, which is lacking compared to competitors that offer many different options. You can create your own custom templates though. Invoices are highly customizable: you can change the logo, font, colour, background, header, footer, and many other elements. Xero’s feature-rich strengths come into play here – you can set up recurring invoices to save time on billing, schedule automatic invoice reminders, send invoices in bulk, and set default payment settings for customers. You’re able to see when your customers have viewed your invoices. There’s even a live preview for invoices so you can see exactly what you’re sending.

Xero has a unique service called “Xero to Xero”, where you can easily send invoices to other companies that also use Xero. Do note that Xero to Xero invoices can’t be sent if your invoice has tax adjustments or credit notes. Xero only supports English for invoicing.

Contact Management

Xero’s client management system is one of the most comprehensive in the game. On top of basic information like contact details, you can add discounts, and sales tax rates. You can even tag attachments to each contact (like legal documents, images, etc.) You can group different customers into “smart lists”. This allows you to target each group with different marketing offers. You can also send invoices to entire groups with a single click.

Payroll

Xero’s payroll add-onXero comes with payroll functions included, which is a nice touch. Most competitors charge extra for this function. You can schedule automatic wage payments (weekly, bi-monthly, monthly, etc.). You can pay employees specific amounts for the type and amount of work they do (e.g. software engineers who did both coding and graphic design for a project). You can also easily reimburse employees for work expenses.

You can also subscribe to Xero Payroll alone if you don’t want to use the full Xero package.

Client Portal

Xero offers your clients a clean-looking portal where they can view invoices. Your clients can pay you directly on the portal, and can also send you comments if they have queries or issues with your invoice.

Estimates

You can easily send professional estimates to your clients, which can then be converted into quotes when your client accepts.

Purchase Orders

You can create purchase orders. If your supplier ships your goods to you piecemeal, you can record how much inventory you’ve already received. You can convert purchase orders into bills.

Expenses

You can connect Xero to your bank accounts to enable “live” importing of transactions. When you connect your bank account to Xero, the software will automatically import your last 90 days of transactions.

Categorising expenses is easy with over 80 default categories to choose from. You can also create your own custom expense categories. Xero has a useful receipt capture function that allows you up to upload receipt images, with Xero automatically extracting key information like transaction amount and date from the receipt. You can then tag receipts to specific expense payments.

You can also create bank rules to automatically categorise your transactions. Xero uses machine learning tools to learn your categorisation patterns – the more use Xero, the better it gets at sorting your transactions for you. This is a big time saver.

Accounts Payable

Xero has an informative “Purchases Overview” dashboard that shows you all you need to know about your bills. You can view upcoming bills. There’s a well-designed dashboard that shows you all your vendors, your total purchase value, and your overdue, outstanding, and paid bills.

Inventory

Xero helps you track your inventory and displays basic information about your stocks. You can add inventory items with basic information like unit prices, descriptions, images, and notes. If you use Xero’s inventory tracker, you’ll be able to view helpful information like total stock value, average cost, number of items that you’ve committed in quotes, and number of items that you’ve ordered.

However, Xero doesn’t allow you to track negative inventory, so if you record the sale of goods before you’ve recorded their purchase you won’t be able to use this function. You can’t track components that make up final goods (annoying for manufacturers), and you also can’t track goods if you use periodic inventory methods (e.g. you only update at months’ end). Unfortunately, unlike with QuickBooks, you can’t set automatic re-ordering alerts when stocks are running low. If you need these functionalities, you’ll have to explore Xero’s app marketplace for third-party integrations.

Fixed Asset Management

Xero comes with this unique feature, which allows you to manage fixed assets. You can create different depreciation schedules: straight-line, declining balance, double declining, etc. You can also roll back depreciation. You can set up default disposal accounts when you need to get rid of your assets.

Packing Slips

Xero doesn’t come with a packing slip function built in. You’ll have to download the Packing Slip template from Xero’s website. It would be easier if the platform came with this function as a default.

Project Tracking

Xero has all the industry-standard project features: managing team members, tracking individual hours allocated, and assigning invoices and other bills to projects. A nice added feature Xero has is project profitability tracking. This helps you prioritise the highest earning projects, and also enables you to quickly address margin issues that may occur with particular projects.

In terms of control over project costing, Xero allows you to set hourly cost rates for each staff member you assign to projects. You can also load your employee’s work hours into Xero Payroll to quickly calculate the wages you owe them which is a good time-saver.

Time Tracking

Xero automatically reports time and costs into your invoices and accounting records. You can convert timesheets into invoices for easy billing. Like other time-trackers, there are automatic functions (start/stop button) and manual timesheet entries.

Budgets

You can create up budgets for various time horizons: 3 months all the way up to 2 years. You can compare these budgets with actual business performance to see how much you’ve beaten (or missed) targets by.

Outsourced Bookkeeping: Xero doesn’t have a “live” bookkeeping function like QuickBooks, but it does have an advisor directory where you can find a local accountant near you. You can then engage this accountant, and Xero allows you to give your accountant read-only access to your account so they can effectively manage your books.

Mobile Apps

Users often comment that Xero’s mobile app functionality is lacking compared to its desktop version.

Xero Customer Support

Xero’s after-sales support is where it really falls short, which is a pity given how robust the actual software package is. Customers have left numerous reviews citing poor support – long wait times for a response being the chief culprit. If Xero could invest more into supporting their customers, then the platform could really push past all its competitors.

Phone: Xero does not offer phone support. If you need to speak to someone urgently, you’re out of luck.

Email: Users have often reported having to wait for a day to get a response from Xero’s support team. Xero has a helpful function that allows you to give Xero support staff read-only access to your account, which helps them directly diagnose and solve whatever issues you might be facing.

Message: Xero has a live chat function, but it’s not located on the accounting platform – you have to go back to xero.com to access it. Users report the support representatives usually answered their queries well enough, but it’s puzzling why Xero doesn’t just include their live chat function within their accounting platform.

Documentation: Like its main competitors, Xero has an extensive base of online documentation. There are in-depth guides to all of Xero’s functions. There’s a community forum where users post questions and other users and Xero representatives will answer them, so you’ll probably be able to find an answer to whatever queries you have here.

There’s an FAQ, blog, and Q&A forum that helps users understand all of Xero’ functions, from the simple to the complex. There’s also a live “AI” chat that can answer basic questions like “how much sales did I generate last year” or “which payments are overdue”.

Videos: Xero has hundreds of video tutorials (called XeroTV) to help you navigate the platform.

Podcasts: Xero also has podcasts that feature business advice, like how to retain staff or how to build software businesses. I’m not sure if anyone really listens to these clips, but if you really want business-related audio playing while you’re on your morning drive, I suppose you could play this on your speakers.

Ultimate Verdict

Xero is a great online accounting software for small-medium businesses, especially for beginners just starting to use an accounting platform. Its features and UI are designed to let newcomers hit the ground running, so you won’t have to spend much time at all learning how to use the platform’s key functions. It’s a great choice for businesses that don’t need complex accounting features, but still want more functionality than more basic alternatives, like FreshBooks. Xero’s highest-tier plan also supports unlimited users, which is great for businesses that have lots of staff and are growing rapidly.

Xero’s customer support could certainly do with a good dose of improvement, and is really a pity given the polished quality of its product. This, and its lacklustre mobile offering mean that Xero still has a ways to go before it can claim to be the undisputed no.1 provider of online business accounting services.

In the grand scheme though, these drawbacks are not huge, and Xero’s many strengths certainly outweigh its few weaknesses. For any small-medium business that demands advanced accounting capabilities, strong reporting, a good user experience, and lots of users, Xero stands as a fantastic choice.

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QuickBooks Review 2020: Online Accounting for Small Business

QuickBooks is one of the most – if not the most – well-known names for online business accounting. QuickBooks serves more than 2 million businesses globally, and its rich features make it a favourite of small businesses all the way to large companies. QuickBooks has great functionality: extensive reports, customisable invoices, inventory tracking, and extensive integrations. It also has unique features like SME financing via QuickBooks Capital (only for businesses in USA/Canada), and QuickBooks Live Bookkeeping, which allows you to get an accountant to help with your accounting tasks.

QuickBooks is really ideal for small-medium businesses that need strong features, in a simple-to-use package that really helps save time on accounting. It helps that QuickBooks’ highest tier plan allows up to 26 users, which allows businesses with more workers to effectively track their projects and transactions together.

QuickBooks Add-Ons

Payments: You can accept online payments with QuickBooks Payments. Transaction fees are 3.4% + USD 0.25 for online payments.

Payroll: You can add on payroll functionality, with a choice from 3 different plans: Core, Premium, and Elite. These plans range from USD 45 to USD 125/month, with an additional cost between USD4-10/employee.

Live Bookkeeping: You can outsource your accounting work to a QuickBooks accountant with this function. Fees range from USD 300 to 600 per month depending on the workload. This is one of QuickBooks’ most useful functions, and can really help you save time and ensure you have clean, accurate records.

New Additions

In their latest update in October 2019, QuickBooks added several new features on top of its already impressive function-rich base.

Instant Deposits

You can now receive instant deposits from clients via QuickBooks Payments. Clients can pay directly through the invoices you send them. This helps you pay your employees, suppliers, and other expenses much quicker. Payments are automatically matched to invoices, so that reconciliation is conveniently done for you.

Mobile App Re-Design

The mobile app now has a more attractive, easy to use design that uses large icons instead of long text lists. These icons help you navigate to the most used functions like invoices, transactions, customers, and sales receipts. It’s a lot easier and quicker to access these critical accounting records now with the app update. QuickBooks has been learning from its competitors about good UX, and it’s showing in the designs of their products.

Batch Entry

QuickBooks allows you to make edits to multiple line items at once. For instance, if you have to write many cheques at the same time, you’ve probably gotten frustrated with having to repeatedly write similar things again and again. With QuickBooks batch entry, you can now duplicate cheque line items for multiple categories, as well as create one cheque and then duplicate it across multiple vendors. You can make batch entries/edits for other things like GST too – a single click allows you to set GST rates for all Chart of Accounts items  that you select, which is a big time saver.

Exporting

You can now export QuickBooks reports to Google Sheets.

QuickBooks’ Features

Dashboard

QuickBooks’ dashboard gives you a quick overview of your expenses, invoices, profit & loss, sales, and bank balances (if you’ve connected your bank accounts). A navigational menu on the left lets you access important features like invoices, expenses, workers. Instead of manually going through your transactions, there’s a search function to help you bring up what exactly what you’re looking for. There’s a “see all activity” button which brings up a full audit record if you need to do a deep-dive into your transaction history. Overall, it’s a well-designed dashboard that gives you all the high-level, critical information you need to assess your business’ financial health.

Chart of Accounts

Prior to 2018, there wasn’t a search function for the Chart of Accounts, which was a real bummer if you were trying to find a specific transaction. Even though this is one of the most critical accounts, you had to scroll up and down to find an account. There’s a search function now though, which makes pulling up information a lot easier.

General Ledger

QuickBooks’ general ledger is well-designed, and allows you to easily view all your transactions in a single glance. You can view starting balances, ending balances, and all transactions sorted by account. This report allows you to quickly spot incorrect ending balances, and how much has been posted to revenue accounts and drawn from expense accounts. If you find an incorrect or suspicious transaction, you can click on it to view transaction details. Both cash and accrual methods are supported.

Sales

QuickBooks Sales menu gives you a quick overview of how much revenue you’re generating over time, and you can set the time period from weekly, monthly, quarterly, and annually. You can see how many invoices are paid versus unpaid. You can also view all your customers’ payment statuses. If you use QuickBooks Payments or link QuickBooks to your bank account, you can also handily view all your deposits here as well. No more tabbing to-and-fro from your bank account to your accounting platform. The sales menu also lets easily send a new invoice or set up a recurring invoice.

Invoices             

QuickBooks has 6 different invoice templates. Invoices are highly customizable, You can change the logo, font, colour, background, header, footer, and many other elements. QuickBooks has a recurring invoice feature that isn’t common amongst competitors, allowing you to set up recurring invoices so that you can bill clients at a particular time repeatedly. You can set up automatic email reminders when customer invoice due dates are approaching. You can also set up late payment reminders to alert customers once their invoices are overdue.

QuickBooks also features invoice tracking, so you can see when your customers have viewed your invoices. 6 languages are supported for invoices: English, Chinese, Spanish, Portuguese, French, and Italian. The first two should be especially helpful to businesses in Singapore.

Contact Management

QuickBooks has a comprehensive client management system. Beyond the normal stuff like contact information, you can save preferred payment methods, default payment terms, tax codes, opening balances. You can even tag attachments to each contact (like legal documents, images, etc.) You can also customise the category of “customers” to different names like patients, members, tenants, etc. which makes it helpful for businesses across multiple industries.

Client Portal

Your clients have a portal that they can login to for viewing invoices (unfortunately the portal doesn’t support estimates you’ve sent them). Your clients can send you payments through the portal and ask you questions about the invoices.

Estimates

You can easily send estimates to your clients. However, unlike FreshBooks, you can’t send detailed proposals. Estimates can be converted into invoices.

Purchase Orders

You can create purchase orders, and specify which orders will be recurring so you don’t have to keep entering them. You can convert purchase orders into bills.

Sales Receipts

Unlike invoices, which can only be closed when customers make payment, QuickBooks allows you to create sales receipts. This lets you record sales for which payment has already been received. This is helpful for industries where on-the-spot payment is the norm, e.g. food & beverage, retail, and clinics.

Watch the short clip below to see QuickBooks automatically extract receipt information:

Expenses

You can connect QuickBooks to your bank accounts to enable “live” importing of transactions. When you connect your bank account to QuickBooks, the software will automatically import your last 90 days of transactions.

Categorising expenses is easy with over 80 default categories to choose from. You can also create your own custom expense categories. QuickBooks has a useful receipt capture function that allows you up to upload receipt images, with QuickBooks automatically extracting key information like transaction amount and date from the receipt. You can then tag receipts to specific expense payments.

You can also create bank rules to automatically categorise your transactions. QuickBooks uses machine learning tools to learn your categorisation patterns – the more use QuickBooks, the better it gets at sorting your transactions for you.

Accounts Payable

You can create AP accounts, and can set up recurring payables so you don’t have to keep entering the same expenses repeatedly.  There’s a well-designed dashboard that shows you all your vendors, your total purchase value, and your overdue, outstanding, and paid bills. This is a really helpful function to help you manage your payables.

Inventory

QuickBooks has a nice inventory tracking system that simplifies product handling for businesses. You can add inventory items with SKU numbers, sale prices, purchase prices, product images, and product descriptions. You can also set automatic re-ordering alerts when stocks are running low. You can create bundles, which are a collection of different inventory items that you sell together (e.g. a fruit basket, a set of clothes). This saves you from having to select each inventory item individually when you make a sale.

Packing Slips

You can create packing slips within QuickBooks, which is easier than other competitors that require third-party integrations to do this.

Project Tracking

You can create projects, add team members, add hours worked to projects, and assign expenses. One unique feature QuickBooks has is it allows you to immediately see the direct profitability of projects (e.g. 50% profit) by comparing sales value with assigned expenses. This helps you prioritise projects better, and also gives you a quick view into any margin issues that may arise with particular jobs. With each project, you can assign job costing via labour, materials, overhead, and more. Projects will track the number of hours worked by each contributor.

Time Tracking

QuickBooks allows you to track your time. Assign your time to projects, describe the work. You can choose customers to assign billable hours. This provides a transparent breakdown of what services were provided, and how many hours were put into them, which helps reduce payment disputes over completed work. You can use automatic time trackers (just press start/stop), or enter hours worked manually.

There’s even a GPS tracking function so you can keep tabs on your employees when they’re out on the road meeting clients. Users can also attach photos as evidence of completed work, or to update co-workers on the status of the job. The time-tracker function also allows you to set up schedules so you can ensure your workers meet deadlines, and you can set automatic reminders so no one forgets that important client meeting!

Budgets

You can create up to 5 budgets to plan for future revenues and expenses. You can compare these budgets with actual business performance to see how much you’ve beaten (or missed) targets by.

QuickBooks Customer Support

Phone: Monday to Friday, 6AM to 6PM; Saturday 6AM to 3PM. Many online reviews cite long wait times on the phone, so don’t have high expectations for quick customer service unlike with FreshBooks.

Message: QuickBooks has a live chat function. However, users also often report having to wait long periods of time to get a response.

Documentation: Online documentation is extensive, with lots of written guides to walk you through the platform. The documentation doesn’t have pictures, so it’s less intuitive than FreshBooks’, but it gets the job done.

There’s an FAQ, blog, and Q&A forum that helps users understand all of QuickBooks’ functions, from the simple to the complex. There’s also a live “AI” chat that can answer basic questions like “how much sales did I generate last year” or “which payments are overdue”.

Videos: QuickBooks has a series of video tutorials to help you navigate the platform.

Ultimate Verdict

QuickBooks is a great online accounting software for small-medium businesses. Its broad range of features and advanced accounting functions makes it an excellent choice for small businesses to medium enterprises. Its 600+ integrations (and counting) means you can enhance this functionality even more broadly, with great support for key functions like payroll and taxes.

Customer support does have a long way to go, but as far as the robustness of the software, QuickBooks is hard to beat. Previously, another issue that users had with QuickBooks was its limited number of users – that’s now been fixed, with the highest tier plan supporting 26 users (25 regular seats + 1 accountant seat).

QuickBooks Online is our editor’s choice for online small-medium business accounting. If you need a web-based accounting platform that has great features, saves you time, and is easy to use, we’d highly recommend you give QuickBooks a try.

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If you’re running a business, don’t forget to protect your company. Provide offers the best online business insurance. Get a quote within 60 seconds, and save up to 25% on your premiums. Have a look at our most common policies:

• Business Package Insurance
• WICA Insurance
• Public Liability Insurance
• Commercial Property Insurance