I used Xero for over 2 years to run my small business accounts. I really loved some parts of it ~ automatic invoicing, super easy bank account reconciliation, nice reports at the click of a button, but most of these features are what any good piece of accounting software should offer.
You will note the word ‘used‘, yes, I managed to break the vicious cycle and escape from Xero. One thing I never really thought about when I signed up was that so much data ended up being stuck in Xero (such as stored bank documents, invoices, etc etc), and that there was a fair bit of information that you can’t actually get back out of Xero without going through 100s to 1000s of transactions and clicking each one…
When I emailed Xero about getting documents out, they really were not helpful, and I think this probably was because they realised that once you can get information like this out of Xero, there is nothing to make the customer stick.
Although Xero never liked to admit it, and they always blamed me/something on my end, I found some stuff in Xero to be painfully slow! I was running a 15″ Mac Book Pro with 8GB RAM, SSD, and i7 Processor, and a 10mb/s + connection, and it was still always at my end. This frustrated the hell out of me, since I never had issues like this on other sites.
Once I was game enough to request a ‘backup’ of ALL my data, but there was no way this was possible, and this made me think about who owned my data (me or Xero). (interesting following this topic).
The biggest reason I stopped using Xero was simple: The Cost.
Cost of Xero:
[latex]57.50 * 12 * 5 = 3450[/latex] dollars for 5 years of Xero, with no additional bells and whistles, or interrogations, with some data that I have no control over, and no way to export. Hmmm… Let me think about that, compared with:
GNU Accounting – a free open source package that runs quickly on all operating systems, in combination with:
A Sales/Invoicing System (for me, WHMCS, with a one of cost of $400, which runs in the cloud, with full control over my data.)
5 Year Cost: Xero ~ $3450 VS Alternate Solution (with full control over data) ~ $400
Is Xero worth it for others:
I found that Xero made accounting really simple, and with almost automatic reconciliation, made it possible for small businesses to do accounting them selves in a manner which they had never done before. My biggest question to small businesses is: If you make the switch:
- What are you switching from – will you be able to transfer old financial transactions?
- Are you prepared to stick with Xero for the foreseeable future? – it really isn’t easy to make a full switch away from them
- If you make the switch, and you start to do reconciliation yourself instead of accountants, do you expect that their bill will go down, or up?
- If you have an existing system, which has features such as inventory management, are you prepared to pay for the extensions with Xero? (e.g. your monthly bill may be $57.50 + $30/per extension)
- Will you or your accountant own your data in Xero?
- Can you deal with having no phone support?
- And finally, can you justify the expense vs buying a single software package?
If you are happy with these questions, then I think that your business should totally go for it!
Xero in Not for Profit
Xero (in NZ) gives 25% off their packages for not for profit. There are hundreds of small clubs and organisations that I think would hugely benefit from Xero’s software, since the cloud based concept allows for really easy and efficient accounting, so I think if a club has the budget for it, then they should go for it, although I think that Xero should have cheaper options for not for profit, potentially support free (because if Xero worked well enough, you wouldn’t need support), which would make getting Xero more realistic.