XERO Features

Xero offers a comprehensive feature set well beyond that of many cloud-based accounting systems. Here are some of Xero’s key features :

• Dashboard – An overview of accounts and upcoming accounts payable and receivable. Extremely well-organized; easy to take in the important information at a glance.
• Estimates – Xero does not have a dedicated quotes/estimates feature, though it is on the list of high priorities for development, so it’s likely we’ll be seeing it sometime in 2014.

• Invoicing – Invoices can be saved as drafts, submitted for approval, or immediately approved and sent. You can either print or e-mail invoices, and it’s easy to see what’s been sent and when. Automatic invoicing is also supported, if you have customers who you bill monthly or weekly, and you can send either activity statements or outstanding statements to all customers with the click of a button. For invoice design, you can either upload your logo to Xero’s template or custom design your own using a docx file. You can also include direct payment options for Paypal, Authorize.Net, DPS, GoCardless, Stripe, eWAY, or any other payment processor of your choice, allowing your buyer to pay immediately by clicking the link on the invoice.

• Bank Reconciliation – Xero offers live bank feeds; alternately, you can import statements manually (ofx, qif, or csv format). The automatic matching feature is on the whole very good, though I’d have liked to see a way to accept automatically matched transactions all in one go, rather than clicking the “OK” button for each of them individually. You can leave notes on transactions, create new entries, assign categories, and split entries to reflect situations such as partial invoice payments. Xero’s automatic categorization is a great time saver, and it’s easy to set bank rules for how routine transactions should be handled. There’s also a quick cash coding section with some convenient keyboard shortcuts for coding transactions which haven’t previously been entered into Xero.

• Accounts Payable – Suppliers can send invoices directly into your Xero accounts payable section, which offers an interactive timeline with a batch payment option. You can also create purchase orders, copy their contents to bills, and set automatic payments for recurring bills. Xero supports check printing with a variety of customization options.

• Reporting – Xero offers over 40 reports, from basic profit/loss and aged payables/receivables to movements in equity and foreign currency gains and losses. You can also create a budget and compare it with your actual spending and income. For the organizations using Xero for payroll, there are additional 16 payroll-related reports available. All reports can be saved as an Excel file, pdf, or exported to Google Docs.

• Expense Reports – A well-executed time saver. Employees can enter their expense reports and receipts into the system. You can then review and approve employee expenses and receipts. It’s easy to see when there are new reports awaiting your approval. Unfortunately, there is no integration with payroll. You will need to enter reimbursements manually if you plan to add them to paychecks.

• Inventory – Xero currently has little in the way of inventory management. You can create stock items, view quantities in stock, and see sales by item in Reports. However, manual journal entries must be created if you want to track inventory as an asset. According to Xero, we should see improved functionality sometime in 2014.

• Tracking – Xero allows you to create up to two tracking categories by which to sort income and expenditures. You can use this for basic job costing or to track sales by employee, location, or whatever other criteria you choose.

• Contacts – Xero offers an option for group invoicing; you can also view each client’s transaction history and analyze your client list by spending and payments. You can assign one primary and up to four secondary contacts per company, and you can configure default communications settings to cc e-mails to whichever contacts you wish. Contact entries are automatically created each time you enter a new name on an invoice; you can also import your existing client list.

• Sales Tax – Xero has excellent sales tax support. You can set taxes for as many different areas as you like (including combined taxes such as a city and state tax, compound taxes are fully supported). You can also assign a default tax rate to each customer.

• Tax Forms and Support – Xero’s 1099 Report provides you with all the information you need to fill out 1099 forms. The software also offers automatic depreciation tracking for fixed assets; enter the initial purchase and depreciation rate and the software will do the rest.

• Multi-Currency – If you do business internationally, multi-currency support will be a crucial feature. Exchange rates are updated every hour; you can invoice and set reports in any currency. Xero supports bank accounts in multiple currencies, though you cannot print checks or submit expense claims in any currency other than your base currency.

• Online File Storage – Xero offers online file storage, allowing you to import receipts, invoices, and other documents. Files can be scanned and uploaded or simply e-mailed to your Xero inbox. You can also use a webcam to photograph the files, which will then appear in your account. Files can be attached to transactions, journal entries, or accounts for paperless record keeping. Note: unattached files in your Xero inbox are visible to all users. If there are documents you wish to keep private, attach them to the appropriate entry immediately after uploading them.

• Payroll – Xero now provides payroll for US-based businesses, including direct deposit and the option to eFile and ePay taxes. This is a new feature which is not yet available in all states; read the latest information on its availability here. A light version of Payroll, for one employee only, is included in the Standard Plan.

• Employee Payroll Portal and Time Tracking – Employees on payroll can use their own logins to access a portal through which they can complete timesheets, view paystubs, and see accumulated sick and vacation time. They can also submit requests for time off and completed timesheets for approval. E-mails from Xero will alert the employee and supervisor as to the status of such requests. The time tracking function is limited. You can enter a total number of hours, but no start and end times. However, you can use the Tracking feature to assign hours to different projects or locations. Employees can also create timesheet templates to cut down on data entry if they work a consistent schedule.

• Import/Export Capabilities – Xero allows you to import and export information freely, primarily in csv format. Xero also makes it easy to switch from QuickBooks, using QuickBooks 2007 or later, just upload your QuickBooks file. Xero will handle the conversion.