Xero. Web-based Accounting Software

A quick look at how Xero could help make accounting beautiful

Updated: July 23, 2021
Xero. Web-based Accounting Software
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When you’re running a small business or operating as a sole trader, it can sometimes be difficult to keep on top of your accounting. Thankfully, there are several software solutions that can assist you with your finances throughout the year. One such service that’s been gaining popularity and critical acclaim over the last few years is Xero. We take a quick look at everything the company and platform have to offer business owners.

Xero Pros and Cons

First, we’ll start with a quick rundown of the things we liked and disliked about Xero. This top-level view makes it easier to see the advantages and disadvantages of choosing the software:


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  • Easy (though time-consuming) to set up, with an intuitive and easy-to-use interface.
  • Gives a useful overview of the financial health of your business.
  • Fairly comprehensive set of accounting features available.
  • Free trial available.


  • Most of the best features are only available on the standard and premium packages.
  • Starter subscription has limited features.

What is Xero?

New Zealand-based company Xero launched its web-based accounting system back in 2006. Since then, it’s grown in popularity to become a trusted service for many small and medium-sized businesses. The cloud-based accounting firm now has offices across the world, including in the UK, US, and Singapore.

xero laptop
Manage your business finances from a central dashboard in Xero

Their aim is to provide a comprehensive set of accounting features that allow business owners and stakeholders to manage the finances of their companies. The software has both desktop and mobile-based applications, making it convenient and intuitive to use, even when you’re on the go.

What Features Does Xero Have?

The features that you get with Xero depend on the tier of subscription you choose. The more you pay per month, the more features you’ll unlock. However, the main goal is to have all of the tools for payroll, invoicing, expenses, projects, financial statements, and reporting in one place.

Below, we’ve outlined the main features you get with each tier:

  • Starter. You can send five invoices and quotes each month, as well as enter five bills. Other features include the ability to reconcile 20 bank transfers, submit your VAT to HMRC, and create automatic CIS calculations and reports.
  • Standard. You get the same features as at the Starter level, without the restrictions on the number of transactions.
  • Premium. All of the features of Standard, with the addition of the ability to handle multiple currencies at once.

Features such as Payroll, Projects, Expenses, and CIS Contractors can be added to each tier, for a cost. There are also several other features and tools that allow you to keep accurate records, keep an eye on your business health, and get paid faster.

How Much Does Xero Cost?

There are several fees associated with Xero, including monthly fees and add-on costs:

  • Starter. £5 per month for the first four months, £10 per month thereafter.
  • Standard. £11 per month for the first four months, £24 per month thereafter.
  • Premium. £13.75 per month for the first four months, £30 per month thereafter.

Payroll costs £5 per month for up to five employees (with a free three-month trial. Projects are an additional £5 per user each month, while expenses cost £2.50 per month. A CIS contractor is currently free until March 2020, when it will cost £5 per month.

Who is Xero for? 

If you’re a small or medium-sized business owner or sole-trader, Xero is a product that could benefit you greatly. Although some of the costs appear high, the amount it can save you in the long run is more than worth it. The software connects well with over 700 other apps, making it a versatile and useful service.

Trying the 30-day free trial is definitely a worthwhile venture, as it gives you enough time to see whether the software is right for your business.

Matt Crabtree
Matt Crabtree
Hi, I'm Matt and I'm an author here at CompareBanks. I write about a range of topics including UK bank stories and the latest news in the banking world. If you'd like to get in touch, feel free to send me an email using the link in my bio.

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