For small business owners, choosing the right accounting software is a critical decision that impacts daily operations, cash flow tracking, and long-term growth. Xero is one of the most popular cloud-based accounting software options available, known for its intuitive design, comprehensive features, and scalability for businesses of all sizes. However, understanding Xero’s pricing structure can be a bit tricky, especially if you’re unsure which plan best fits your business needs.
Xero offers multiple subscription plans, each with different features and pricing. Whether you’re a freelancer, a small business, or a growing company, there’s a plan tailored for you. But how do you know which plan to choose? This guide breaks down Xero’s pricing plans, features, and costs so you can select the best option for your business in 2024.
Overview of Xero Pricing Plans
Xero offers three primary subscription plans designed to meet the needs of different types of businesses. The pricing model is monthly-based, which means you pay a subscription fee every month to access the platform. Each plan comes with a unique set of features and limitations, so it’s essential to understand what’s included.
Here’s a quick look at the Xero pricing plans:
- Early Plan: Best for freelancers, solopreneurs, and micro-businesses with minimal invoicing needs.
- Growing Plan: Ideal for small businesses that need unlimited invoicing, bank reconciliation, and reporting.
- Established Plan: Best for larger businesses or companies with more advanced needs, like multi-currency support, project tracking, and expense claims.
Each of these plans is designed for specific types of users, from self-employed individuals to growing businesses with multiple employees. The cost and features increase as you move up from the Early Plan to the Established Plan.
Detailed Breakdown of Xero Plans and Costs
Let’s take a closer look at each of Xero’s plans, their features, and how much they cost.
Xero Early Plan
- Cost: $13/month
- Best For: Freelancers, self-employed workers, and small startups with minimal invoicing needs.
- Key Features:
- Send up to 20 invoices and quotes per month.
- Enter up to 5 bills per month.
- Reconcile bank transactions.
- Create purchase orders.
- Access the Xero mobile app.
The Early Plan is perfect for freelancers or self-employed professionals who have limited billing needs. However, the cap on 20 invoices and 5 bills per month can be restrictive for growing businesses. If you process more than this, it’s wise to consider upgrading to the Growing Plan.
Xero Growing Plan
- Cost: $37/month
- Best For: Small businesses that require unlimited invoicing, bills, and transactions.
- Key Features:
- Unlimited invoices and quotes.
- Unlimited bills and payment tracking.
- Bank reconciliation for unlimited transactions.
- Purchase order creation.
- Access to reports and financial insights.
For most small businesses, the Growing Plan offers the perfect balance of features and affordability. It provides the ability to send unlimited invoices and reconcile bank accounts with no limits on transactions. Unlike the Early Plan, you won’t be limited by the number of invoices or bills you can process each month. This plan is best suited for small to medium-sized businesses with more complex financial needs.
Xero Established Plan
- Cost: $70/month
- Best For: Larger businesses or companies with complex financial needs, such as multi-currency support, expense tracking, and project tracking.
- Key Features:
- Everything in the Growing Plan, plus:
- Multi-currency support for businesses with international clients.
- Expense tracking and reimbursements for employee purchases.
- Project tracking for monitoring job costs, time tracking, and profitability.
- Access to advanced analytics and financial reports.
The Established Plan is designed for businesses that need to track multiple currencies or manage complex projects. If your company handles international payments or requires project tracking for client work, this plan offers tools that the Early and Growing Plans do not. It also includes features for expense claims, which is essential for businesses with employees who need to be reimbursed for out-of-pocket expenses.
Which Xero Plan Should You Choose?
Choosing the right Xero plan depends on the size and scope of your business. Here’s a simple breakdown of which plan is best for you based on your business needs.
Choose the Early Plan if:
- You’re a freelancer, solopreneur, or self-employed professional.
- You send fewer than 20 invoices and 5 bills per month.
- You only need simple bookkeeping tools.
This plan is best for individuals and micro-businesses with minimal invoicing and billing needs. It’s affordable but has significant limitations, especially for companies with higher transaction volumes.
Choose the Growing Plan if:
- You’re a small business that processes a lot of invoices and bills.
- You want access to unlimited invoicing, billing, and bank reconciliation.
- You need tools for financial reporting, cash flow tracking, and customer payment tracking.
For most small businesses, the Growing Plan offers the best value. It removes the invoice and bill limits, making it ideal for companies with ongoing supplier payments and multiple customer invoices.
Choose the Established Plan if:
- You run a larger business or a company with complex financial needs.
- You deal with international clients and currencies.
- You manage multiple employees and track expenses.
- You work on client projects and need job costing and project tracking.
If you’re managing large international payments or tracking job costs for multiple projects, the Established Plan gives you the tools you need. The expense-tracking feature also allows employees to submit receipts for reimbursement, making it ideal for larger companies with team members working remotely or on-site.
Hidden Costs to Consider with Xero
While Xero’s subscription pricing is transparent, there are a few extra costs to keep in mind. Depending on your business’s needs, these costs could impact your total expenses.
- Payroll Add-On: Xero no longer includes built-in payroll in the U.S. Instead, you’ll need to integrate a payroll provider like Gusto, which has its own monthly fees.
- Third-Party Integrations: If you connect third-party apps (like Shopify, Stripe, or CRM tools) to Xero, some of these apps may have additional subscription fees.
- Accountant Fees: While Xero simplifies bookkeeping, you may still need an accountant to review your records at tax time.
While these costs are not directly related to Xero’s subscription price, they are important to consider as part of your total accounting expenses.
How to Get the Best Deal on Xero
Xero occasionally offers promotional discounts for new subscribers. For example, you might see deals like 50% off for 3 months for new users. To take advantage of these promotions, check Xero’s official website or look for sign-up deals during Black Friday, Cyber Monday, or tax season.
If you want to try Xero before committing, you can sign up for a 30-day free trial. This trial gives you full access to all features, so you can explore each plan and see which one is the best fit for your business.
Final Thoughts
Xero’s pricing plans are designed to fit businesses of all sizes, from freelancers to large companies with multiple employees. Whether you need a simple bookkeeping tool or an advanced accounting system with multi-currency support, Xero has a plan to match your needs.
For most small businesses, the Growing Plan ($37/month) offers the best balance of features and affordability. If you’re a freelancer or solopreneur, the Early Plan ($13/month) is a great entry-level option. Larger companies with international clients should consider the Established Plan ($70/month), which provides multi-currency tracking, job costing, and expense claims.
If you’re not sure which plan is best for your business, take advantage of Xero’s 30-day free trial. This allows you to explore the platform and see how it fits your needs before making a commitment. No matter which plan you choose, Xero provides powerful tools for simplifying your accounting process and helping your business stay on top of its finances.
Tags: Xero pricing, Xero plans, accounting software, bookkeeping software, small business accounting, Xero features, financial management
