Would you recommend Xero?

March 12, 2020 3:13 AM

My accountant is trying to sell me onto Xero and I'm wondering if it would be a good move. They're trying to sell us training and ongoing support and if we say yes it's going to double our yearly accounting bill.

At the moment we use Excel and bridging software to upload to HMRC for MTD. Anyone got any thoughts on whether we should go for it?! We don't like the Excel method at all as it frequently allows huge errors to creep in (formulas get easily damaged when inserting or deleting rows etc). Thanks! We're a small-mid company of about ten employees with turnover of about £500K. Thanks!

posted by dance to Work & Money (6 answers total)

We use Xero and I swear by it running two separate businesses with similar turnover. We pay about £25 per company per month for the service, and have never paid for training or anything else - it is pretty intuitive if you understand your books as they stand now. It handles MTD just fine. Does invoicing. It does bank reconciliations as well, though I do not personally use that functionality. I also don't do payroll through Xero, but it has that capability as well and it would probably save me money if I took the time to figure it out. Our accountants learned how to use it when we went with it; they have a number of clients using it now (I give them 'adviser' status). It was at least half the price of Sage and does not come with the annual retainer contracts, etc. Just the monthly fee. There is a sandbox company you can play with for free as a demo if you want to give it a look.

If you're doing your own books in Excel and paying £300 a year seems a big step up, I can understand your concern. From my point of view, accounts in the cloud, do my own bookkeeping - £300 is a bargain. VAT is a doddle - push a button, check the return, file. Can't see a reason not to use it for a small business. If I had a wish list, it would integrate with my ePOS system to automatically import sales figures, but I can cope just fine without that.
posted by sagwalla at 3:38 AM on March 12, 2020 [1 favorite]

Given what you're currently using, yes definitely switch to Xero or a similar service. I use FreeAgent (as a sole trader) which works in similar ways. I've found it has prevented me from needing an accountant at all, but as you have a proper company you'll still need yours.

I pay about £200/year which seems like a bargain to me as it essentially eliminates the tax-return crunch in January - I just make a very small effort to keep the books up to date (automatic pulling in of bank account data makes this simple), then submitting tax and VAT returns is just a couple of clicks. I also use it as an invoicing tool; you don't state whether you want to do this, but I find it very simple.
posted by altolinguistic at 7:29 AM on March 12, 2020 [1 favorite]

People say really, really positive things about Xero. I think you’ll find it’s worlds better than doing your accounts by hand in Excel.

(Frankly, almost anything is better than doing your accounts by hand in Excel)
posted by pharm at 10:21 AM on March 12, 2020

I've been using Xero for years, it's great. But my accountant didn't charge anything extra to work with me using Xero - it saves them time too. (I'm paying the subscription)

Check if it can integrate with your bank.
posted by BinaryApe at 12:53 AM on March 13, 2020

Absolutely. Over the years, I have used XERO for companies with turnovers between £1m and £47m and I am now switching from a nightmarish Sage 50 to Xero for a £20m FMCG company.

Depending on your industry, you may need adjacent systems to manage stocks, orders (Unleashed or Dear Inventory), and cash flow.

PM me if you want more details. I would be happy to help.
posted by Parsnip at 3:29 AM on March 13, 2020

I have heard that it's best to have the password to your Xero instance, as it makes it easier for you to change accountants.
posted by quercus23 at 11:09 PM on March 13, 2020