Xero Software

Want help to choose the right accounting software for your business?
This guide will help you.

Choosing the right accounting software is a decision that busy entrepreneurs often make on the fly. Some will make their decision based on price, others will react to a special offer in their inbox or follow what their friends are using in their businesses. Our advice is to spend more time mapping your specific needs now and in the future because choosing bookkeeping software is actually a critical decision to the financial health and growth of your business – a decision that deserves your time and attention.

Why is it important to get it right?

Implementing the right accounting software system will allow you to see how all the key financial metrics of your business are progressing, which creates the foundation for making smart, accurate decisions. It might seem like a lot of work up front – doing your research and measuring your business needs – but it can save you a huge amount of money, time and energy in the future.

On the other hand, if you make a snap decision based on a Google search or using the platform your friend uses in her business, you could land your business in trouble. You could end up with accounting software that’s missing the very features that would benefit your business the most.

It’s best to do the work yourself or have someone in your team who understands the business do this.

Why is it important to get it right?

Implementing the right accounting software system will allow you to see how all the key financial metrics of your business are progressing, which creates the foundation for making smart, accurate decisions. It might seem like a lot of work up front – doing your research and measuring your business needs – but it can save you a huge amount of money, time and energy in the future.

On the other hand, if you make a snap decision based on a Google search or using the platform your friend uses in her business, you could land your business in trouble. You could end up with accounting software that’s missing the very features that would benefit your business the most.

It’s best to do the work yourself or have someone in your team who understands the business do this.

Accounting Software Checklist

Remember, don’t just think about your business needs now – think about the future, too.
You want an accounting software platform that will grow with you.

Sales

  • What are you selling?
  • How do you sell? (platform/channels)
  • How do your customers pay you?
  • What processes or infrastructure do you need to make sales work effectively?

Expenses

  • Do you have contractors, employees or other providers to pay?
  • What are your inventory, shipping & customer support costs?
  • Where and how do you save your receipts?
  • What processes or infrastructure do you need to handle expenses effectively?

Payroll

  • Do you have employees and are you required to follow employment law?
  • How large is your staff?
  • How often are they paid?
  • Do they get paid for holidays and sick leave?
  • Do they earn superannuation or 401k?

Reporting

  • What reports do you need?
  • How flexible is the Chart of Accounts and reporting layout?
  • Can it be customised to your needs?
  • Is the standard Chart of Accounts suitable?
  • Do you need departmental, location or job reporting?

Other Considerations

  • What is your volume of transactions per week / month?
  • Who will have access to the software?
  • How many users do you need?
  • Who will be on your accounting team? (bookkeeper, accountant, CFO, VA etc.)
  • Who can approve payments?
  • Do you need foreign currency capabilities?
  • Does the software have the bank / Paypal / Stripe integrations you need?
  • How much will it cost to set up?
  • Where are you expecting the business to be in six months, 12 months and three years’ time? Will this software still be suitable? If not, which option would be better?

Tools like MYOB, Wave, Saasu and Freshbooks can do the job. But if you’re serious and looking to scale, there are only two options: Xero and Quickbooks Online.

The smaller, cheaper tools are good for a start. But if you plan to grow, you’ll have to move at some point.

Doesn’t it make sense to start with the end-goal in mind?

— MERYL JOHNSTON
CEO & Founder, Bean Ninjas

Xero Software vs. Quickbooks Online

When we first started Bean Ninjas, we tested both platforms. We paid close scrutiny to the key features online business owners would want and need and some of the factors we weighed up were:

  • Ease of use for accountants and non accountants
  • Core accounting functions such as invoicing and payroll
  • Level of automation
  • Integrations with other software
  • Range of reports available
  • Layout and presentation of reports


Automation is often overlooked when selecting accounting software but, in our opinion, it is a contributor factor to how easy and intuitive the software is to use. Xero software, for example, includes automated reminder emails for outstanding debts and rule-based transaction categorisation. Not only do these small time savings add up to significant productivity improvement, but they reduce the need for duplicate data entry and opportunities for error.

Why do we choose Xero software?

After conducting a detailed comparison and analysis, we decided that Xero was the best cloud accounting software available for the type of clients we work with. We specialise in freelancers, digital agencies, eCommerce businesses, coaches and consultants.

That doesn’t mean that Xero is the most suitable accounting software for every business. We always recommend to work through the questionnaire above to determine the specific needs of your business and then, based on your findings, select the most appropriate software for your enterprise.

Simple questions to ask when it comes to Xero software vs. Quickbooks

Functionality

How is my business going to use the software? What functions are most critical to me?

Integration

Is my business reliant upon a certain software application? Are we considering any other applications that will be integrated with my accounting software?

Pricing

What am I comfortable spending? Where will I get the most value when considering the subscription plans and offerings available?

Usability

Are you strong technically in accounting and bookkeeping terminology and workflows? How much time are you willing to devote to your accounting? Test drive each solution: is there one that you like better visually? Does one solution “make more sense” when tackling your typical accounting tasks?