Xero as a replacement for Sage Financials?
First thing to stress here is that this is not an exhaustive review of Xero, but my own personal option on the product. You must perform your own due-diligence, but this article can save you time and give you pointers on what to watch out for.
If you disagree with anything I say, or you feel I’ve missed out something important, please do leave a comment, or email me, and I will try to incorporate any corrections/additions.
Quickbooks or Xero?
I have never used Quickbooks, but my understanding is Xero and Quickbooks are fairly similar in features. We use Xero internally so I have a fairly good understanding of the application.
What I like about Xero
Let me get this off my chest, I think Xero is a brilliant little product. We use it with support from our accountants and it enables them to seamlessly handle or VAT submissions (MTD), payroll, end of year processing, and our bookkeeping is a doddle. But we are a small company with very simple requirements and only a few invoices each month. But let me summarise the pros:
- So cheap it’s practically free
- Really simple to use
- Best in class bank reconciliation & matching
- Super robust
Its been described as an accounting system for people who don’t know what Debits & Credits are. If you are a small building company, or a graphic design studio you probably find Debits and Credit really confusing, and Xero just takes that confusion away.
Thinking of the shortlist criteria of my last post:
Xero is cloud based and certainly handles all the normal accounts receivable and accounts payable functions, but not sure about their BACS file support… It handles multi-currency, is MTD, compliant, handles fixed assets, budgets, even has payroll for a small extra cost. You can add third party stock control and purchase order processing. So all-in-all a very comprehensive little package, so why doesn’t everyone use Xero?
At the risk of repeating myself, Xero is “an accounting system for people who don’t know what Debits & Credits are” and accountants who DO know what Debits & Credits are will find it a bit… …uncomfortable? On top of that general impression there are some real limitations:
- Its not multi-company
You would need one instance for each company, then export and manually consolidate.
- Supports limited legislations
For example Germany and Spain are not supported, but then again you will be hard pushed to find an accounting system that does.
- Reporting – the reports provided work really well, but you are limited to what is provided, so if you want detailed analysis reports, even some simple ones, you end up exporting to Excell.
- Document customisation
Customisation of documents is very limited.
- Not on the Salesforce platform
There is an Appexchange app that integrates Salesforce with Xero, but its not the same as having a single platform, and its not cheap.
- Efficiency and scope for automation is very limited.
Some people ask what is the maximum turnover for a company using Xero. Its not the turnover, rather the complexity of your accounts, invoicing volumes, and the reporting requirements. Having said that, larger companies have more of all these… Xero is all about making simple manually entered accounts really easy to manage. If your accounts are simple enough its a great solution, but the limits on reporting and automation make it unsuitable for many companies.
Sage Financials knowhow evaluation
If you want to discuss the full shortlist of accounting solutions and the Sage Financials knowhow evaluation, please follow this link.