Xero costs more than other accounting tools. It can be money well spent if it meets your needs. Here’s what it feels like after a year with the software.
On the plus side, Xero slashes the time spent handling paperwork. There is far less need to handle physical paper. This is part of my paperless journalist goal.
Xero saves time
I’m not a natural accountant. Book-keeping is my least favourite part of running a business, so speeding up book-keeping is a big step forward. Time is money. I estimate the extra cost compared to other accounting tools is a tiny fraction of the money value of the time I save using the application.
Xero looks wonderful. It has a clear, easy to comprehend user interface and all the tools are close to hand where and when you want them. It also produces crisp reports and other output. This interface is one reason the application is more efficient than rival accounting tools.
Before Xero it took me a day and a half every two months to prepare my GST return and two or three days at the end of the year to prepare my income tax return. Monthly invoicing would take a couple of hours.
With Xero the GST return now takes two hours. The longest part of the job is keying in cash receipts. If I could scan these paper documents into my computer, OCR them and send them to Xero I’d halve the time.
GST was hard going because I’d make small errors and need to fix them before completing the return and sending it to the Inland Revenue Department. I still make errors, but they are easier to trace and fix with Xero. This means there’s less teeth gnashing and sense of helplessness.
My invoices take minutes, not hours to prepare. I briefly had one client on automatic invoicing which mean no work whatsoever. I can go directly from adding items to sending off emailed invoices to clients without leaving the application.
So far I’ve only been through one end of year. It was still painful but less stressful than in past years – mainly because Xero is easier to understand and use than desktop accounting packages like MYOB or Quickbooks. It has a slick, uncluttered interface and a seamless connection to my bank accounts. Sure other applications now do this, but Xero is better integrated.
Well balanced feature set
Another great feature is the software is nicely balanced for non-accountants. Many accounting packages come with esoteric features that accountants love, but leave the rest of us befuddled. I can just about understand everything that goes on with Xero. If I ever run into problems – and that happens less than with Quickbooks or MYOB – support is fast and professional.
One feature that sets Xero apart from other accounting applications is the automatic bank feeds. While rival applications offer something similar, Xero’s integration with the banks is both seamless and effortless. I’ve never seen anything as impressive here in New Zealand. If Xero could reverse this integration, so you could pay Inland Revenue direct from the application, it would be a killer advantage.
So what’s not good?
I’m not comfortable with security. Keeping financial data in the cloud and not on a secured home computer carries a risk. I’d like more reassurance that my data is safe. The company says its application is safe, but I’m operating on trust instead of knowing for certain strangers can’t fool around with my accounts.
The price is at the high-end of the range – Xero works out at NZ$600 a year which is more than MYOB or Quickbooks. As I’ve said the time saved more than makes up for this. However, most of my business involves billing Australian clients. Xero invoices are hardwired to state amounts in New Zealand dollars – at the time of writing the difference between the two is close to 30%.
There is an add-on multicurrency option but that’s another NZ$180 a year. The higher price takes Xero into the luxury product range – a high price just to write A$ on invoices instead of NZ$. There’s extra functionality, but the bit I need is the A$ on the invoice – not the rest of the functionality.
This last point aside, Xero remains the best accounting tool I’ve found to date. Over the years I’ve used plenty including Quicken Cashbook, Quickbooks, MYOB and Accpac Simply Accounting. None comes close.