How Much Does Xero Cost? A Comprehensive Guide to Xero Pricing

How Much Does Xero Cost? A Comprehensive Guide to Xero Pricing

At The Numbersmith, we're passionate about helping small businesses find the right accounting software to manage their finances effectively. As certified Xero partners, we often get asked, "How much does Xero cost?" It's a crucial question for small business owners looking to optimise their accounting processes without breaking the bank. In this comprehensive guide, we'll break down Xero's pricing plans and features and help you understand which option might be best for your business.


Understanding Xero Accounting Software

Xero accounting software has become a solution for many small businesses and accountants. Its cloud-based platform offers a wide range of features, including bank feeds, invoicing, expense tracking, and comprehensive reporting. What sets Xero apart is its user-friendly interface and powerful capabilities that streamline financial management for businesses of all sizes.

One of Xero's standout features is its ability to connect directly with your bank accounts through bank feeds. This feature automatically imports your bank transactions into Xero, saving you time and reducing the risk of manual data entry errors. For small businesses, this automation can be a game-changer, allowing you to focus more on growing your business and less on mundane bookkeeping tasks.

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Xero Pricing Plans: An Overview

Xero offers several pricing tiers to accommodate businesses of different sizes and needs. Let's take a closer look at each Xero plan:

1. Starter Plan: £16/mo


2. Standard Plan: £33/mo

3. Premium Plan: £47/mo

These prices are current as of our last update, but it's worth noting that Xero occasionally implements a price increase. We always recommend checking their website for the most up-to-date information on Xero subscription costs.

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Starter Plan: Perfect for Micro-Businesses

The Starter Plan is Xero's entry-level offering, priced at £16/mo. This plan is ideal for sole proprietors, freelancers, or very small businesses with simple accounting needs. Here's what you get:

- Send up to 20 invoices and quotes per month

- Enter up to 5 bills

- Reconcile 20 bank transactions

- Capture bills and receipts with Hubdoc

While this plan is cost-effective, it's important to note its limitations. If your business regularly sends more than 20 invoices or has more than 5 bills per month, you'll quickly outgrow this plan.

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Standard Plan: Ideal for Growing Small Businesses

At  £33/mo, the Standard Plan is Xero's most popular option. It removes the limitations of the Starter Plan and includes:

- Send unlimited invoices and quotes

- Enter unlimited bills

- Reconcile unlimited bank transactions

- Bulk reconcile transactions

- Manage payroll for up to 5 employees

This plan is suitable for most small businesses that have outgrown the Starter Plan but don't need the advanced features of the Premium Plan. The unlimited invoices, bills, and bank transactions make it a versatile option for businesses with higher transaction volumes.

Premium Plan: For Established Businesses with Complex Needs

The Premium Plan, priced at £47/mo , is designed for larger businesses or those with more complex accounting needs. In addition to all the features of the Standard Plan, you get:

- Multi-currency support

- Manage payroll for up to 10 people

- Claim expenses

- Track project time and costs

This plan is particularly valuable for businesses that deal with multiple currencies or need more advanced project tracking and expense management features.

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Is Xero Worth the Cost?

At The Numbersmith, we believe that for many businesses, Xero offers excellent value for money. Here's why:

1. Time Savings: Xero's automation features, like bank feeds and recurring invoices, can save you hours each week on data entry and reconciliation.

2. Improved Cash Flow: With features like automated invoice reminders and clear financial reporting, Xero can help you stay on top of your cash flow and make informed business decisions.

3. Scalability: As your business grows, Xero can grow with you. You can easily upgrade your plan or add features as needed.

4. Collaboration: Xero makes it easy to collaborate with your team or your accountant, ensuring everyone has access to the accounting data they need.

5. User-Friendly Interface: Even if you're not an accounting expert, Xero's intuitive design makes it easy to navigate and understand your finances.

6. Short-term Cash Flow Insights: Xero's business snapshot feature provides a clear view of your short-term cash flow, helping you make informed decisions.

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Comparing Xero to Other Accounting Software

When considering how much Xero costs, it's also worth comparing it to other popular accounting software options like QuickBooks. While QuickBooks often has a lower entry-level price, many businesses find that Xero offers better value as they grow, particularly due to its unlimited users on all plans and its user-friendly interface.

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Making the Most of Your Xero Subscription

To ensure you're getting the best value from your Xero subscription, consider these tips:

1. Take advantage of the free trial: Xero offers a 30-day free trial, giving you ample time to explore the software and determine if it's right for your business.

2. Use Xero's training resources: Xero provides extensive free training materials. Invest time in learning the system to maximise its benefits.

3. Regularly review your subscription: As your business grows or changes, your accounting needs may change too. Regularly review whether your current plan still suits your needs.

4. Explore integrations: Xero integrates with hundreds of third-party apps. Explore these to see if you can further streamline your business processes.

5. Work with Xero partners: As certified Xero partners, we at The Numbersmith can help you set up and optimise your Xero account to ensure you're getting the most value from your subscription.

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Xero Features That Add Value

Xero offers many features that can add significant value to your business:

1. Bank Reconciliation: Xero's bank feeds and smart reconciliation features save time and reduce errors in your bookkeeping.

2. Invoicing: Create professional invoices quickly and easily, with options for recurring invoices and automatic reminders.

3. Expense Claims: Easily track and manage employee expenses.

4. Project Tracking: Monitor time and costs associated with specific projects to ensure profitability.

5. Reporting: Generate detailed financial reports to gain insights into your business's performance.

6. Multi-Currency: Handle transactions in multiple currencies with ease (available on the Premium plan).

7. Inventory Management: Track stock levels and costs efficiently.

8. Fixed Assets: Manage depreciation and disposal of assets.

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Xero Payroll: Simplifying Employee Payments

Xero's payroll feature, included in the Standard and Premium plans, can significantly simplify the process of paying your employees. It handles tax calculations and leave management and can even file payroll taxes in some regions. However, it's important to note that payroll features may vary depending on your location, and additional fees may apply in some regions.

Xero's Free Software Offerings

While Xero's main product is a paid subscription, they do offer some free software tools that can be valuable for small businesses:

1. Xero Central: A comprehensive knowledge base with guides and tutorials.

2. Xero TV: Free video tutorials on using Xero and general accounting principles.

3. Xero App Marketplace: While the apps themselves may have costs, browsing and researching potential integrations is free.

Conclusion: Is Xero Right for Your Business?

Determining how much Xero will cost your business depends on your specific needs and the complexity of your accounting requirements. While the monthly subscription fee is straightforward, the real value comes from how effectively you use the software to manage your finances and drive your business forward.

At The Numbersmith, we've seen firsthand how Xero can transform the financial management of small businesses. From improved cash flow visibility to time savings on bookkeeping tasks, the benefits often far outweigh the costs.

Remember, the most expensive accounting software is the one you don't use effectively. That's why we're here to help. As your Xero partners, we can guide you in choosing the right plan, setting up your account, and leveraging Xero's features to drive your business success.

Interested in exploring how Xero could work for your business? We offer a free consultation to discuss your needs and how Xero might fit into your financial management strategy. Don't waste time struggling with outdated systems or inefficient processes. Contact us today to see how we can help you harness the power of Xero for your business.


1. Does Xero offer a free trial?

Yes, Xero offers a 30-day free trial for all new users. This gives you free access to explore all features and determine if it's the right fit for your business.

2. Can I upgrade or downgrade my Xero plan?

Yes, you can easily upgrade or downgrade your Xero subscription at any time. Your billing will be adjusted accordingly on your next payment date.

3. How does Xero handle multi-currency transactions?

Xero's Premium plan includes multi-currency support, allowing you to send invoices, receive payments, and manage expenses in over 160 currencies.

4. Is Xero suitable for larger businesses?

While Xero is popular among small businesses, its scalable features and integrations make it suitable for many larger businesses, too. The Ultimate plan is designed to meet more complex needs.

5. Can my accountant access my Xero account?

Yes, Xero allows you to invite your accountant or bookkeeper to access your account. They can have their own login, and you can set specific permissions for what they can view or edit.


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