As a small business owner, managing your finances comes as one of many challenges when it comes to running your business, including:
- Payroll
- Invoicing
- Bookkeeping
- Inventory
- Staying on top of expenses and receipts…
One way you can free up some of your time is by having a clear system to organising your mountains of receipts. And the most efficient way to do this is by using small business accounting software.
But with multiple cloud based accounting software options on the market, choosing the right one can be daunting.
Among the most popular is Xero bookkeeping software, a comprehensive and user-friendly solution designed specifically for small businesses–and their bookkeepers.
In this article, we’ll explore seven reasons to use Xero’s online accounting for small business.
What is Xero used for?
First things first–what is Xero and what is it used primarily for?
Xero is a cloud-based accounting platform designed to help small businesses manage their finances.
It allows business owners to track cash flow, reconcile bank statements, manage payroll, and generate financial reports—all in one place.
The software is known for its intuitive interface, robust features, and flexibility depending on how tech-savvy you are as a business owner.
Basically, it is an ideal choice for small businesses seeking a seamless accounting experience.
Read more: What Does A Bookkeeper Do In Australia? And Why Your Business Needs One
Whether you’ve decided to manage your books alone, or are handing your books to a trusted bookkeeper, there are many reasons Xero is the best accounting software for small business owners.
1. It’s easy to use and accessible
Of all the many features that Xero has is that it’s quite easy to use the basic functions. The software’s user-friendly interface makes it simple for small business owners to navigate through various features without extensive accounting knowledge. With Xero’s cloud-based platform and mobile accounting app, you can access your financial data anytime, anywhere, from any device so that you can instantly know things like:
- How much cash is in the bank
- What invoices need to be paid
- What payments are overdue
- Your cash flow activities
This flexibility allows business owners to stay on top of their accounting tasks and share information with their bookkeepers even when they’re on the go.
Another benefit is how Xero’s intuitive dashboard helps you quickly spot what needs attention as soon as you log in. Important notifications, such as overdue invoices or bills to pay, appear front and centre, helping you prioritise daily tasks without the need to dig through multiple menus. The mobile app is especially useful if you’re often out and about—simply snap photos of receipts, reconcile bank transactions, or send quotes to customers on the spot. This on-the-go functionality means you’re never left waiting until you’re back at your desk to stay in control of your finances.
2. Keeps your financial management under one roof
Xero software offers a wide range of tools to help you manage your business finances efficiently, including bookkeeping functions such as online invoicing and payroll management. Xero also connects to live bank feeds, so all your financial info is in one place. If you work with a bookkeeper, Xero accounting software makes it easier to communicate with them, reducing the risk of data-sharing errors. This way, you don’t have to worry about delays or cash flow problems.
Having all your financial operations in one place doesn’t just save time—it also reduces the risk of missed information. For example, when your invoicing, payroll, and bank feeds all sync into Xero, you have a single source of truth for your business performance. This makes it far easier to track your profitability month-to-month or spot trends in expenses that might need attention. With shared access, your bookkeeper can see exactly what you see, so if something doesn’t look right, it can be fixed immediately rather than at the end of the quarter.
3. Keeps you on top of cash flow insights in real-time
Understanding your cash flow—the amount of money coming in and going out of your business—is crucial. Xero accounting software provides real-time insights into your cash flow, helping you keep a finger on the pulse of your business’s financial health. With Xero, you can track incoming and outgoing cash, view outstanding invoices, and monitor expenses. Real-time visibility allows you to make better decisions for your business, plan for future growth, and stay prepared for unexpected cash flow changes, such as during slower seasons.
Many small business owners find that Xero’s cash flow reporting gives them the confidence to invest in growth, knowing exactly what’s coming in and going out. Xero even allows you to project your cash position weeks or months in advance, so you can prepare for big purchases or seasonal slowdowns. Plus, by reviewing up-to-date cash flow data, you can negotiate better payment terms with suppliers or set clearer expectations with customers.
4. It integrates with other business tools
If you’re using other types of software for your business, Xero software seamlessly integrates with other business tools, making it easier to manage your business info. Whether you use point-of-sale systems, customer relationship management (CRM) software, or project tracking tools, Xero’s extensive range of integrations ensures you can connect the platforms you already use. This means you don’t have to do manual data entry which is prone to mistakes.
Beyond basic integrations, Xero’s app marketplace offers hundreds of specialised add-ons, from inventory management to point-of-sale, e-commerce, and even time tracking. This flexibility means you can tailor your accounting system as your business evolves, keeping everything streamlined and efficient. If you’re unsure which integrations are right for you, many bookkeepers are happy to recommend tried-and-tested solutions for your industry—helping you get the best out of your tech stack without wasting money on tools you don’t need.
5. It helps keep your business compliant
Staying compliant with tax regulations in Australia and New Zealand is crucial for small businesses. Xero Australia and Xero NZ help you meet these obligations—and if you’re not doing your own bookkeeping, it helps your bookkeepers keep track of all your finances come tax season. The software can generate financial reports, including profit and loss statements, balance sheets, and cash flow reports. You can customise these reports to suit your business’s specific needs—this way, you have all the necessary documentation for filing taxes, preparing GST returns, and being ready for financial audits.
Staying compliant isn’t just about tax time. Xero’s built-in checks and balances help reduce the risk of simple mistakes snowballing into costly issues down the track. For example, the system alerts you to duplicate transactions or missing GST fields before you submit a BAS. For business owners who are pressed for time or don’t love admin, these automated compliance features are a real lifesaver.
6. Chances are, your business won’t outgrow it
As your business grows, your accounting needs will evolve. Xero software is designed to scale with your business, offering flexible Xero pricing plans and features to accommodate growth. Whether you’re a sole trader or managing a team, Xero accounting software provides the tools you need to keep your finances in order. This scalability ensures that you won’t outgrow your accounting software as your business expands. Xero subscriptions and packages can be adjusted to match your changing needs, making it a long-term solution for your business.
If you decide to expand your services, hire more staff, or even open a second location, Xero can adapt. Multi-currency support means you can manage overseas payments if your business goes global. For businesses with complex needs, you can also create custom roles and permissions, so each staff member sees only what they need—protecting sensitive information while supporting collaboration.
7. You get access to loads of support and resources
With so many users, Xero software offers extensive support and resources for small business owners. From comprehensive online guides to customer support, Xero ensures that you have the assistance you need to make the most of the software. Additionally, Xero’s online community allows you to connect with other small business owners, share insights, and learn from their experiences. This support extends to practice management and client collaboration features, making it an excellent choice for both business owners and their bookkeepers.
Beyond technical support, Xero offers live webinars, video tutorials, and regular updates on changes to Australian tax law—so you’re always learning and staying ahead. The Xero community is particularly active in sharing best practices, which means you can tap into advice from thousands of other business owners who’ve faced the same challenges.
Why work with a Xero-certified bookkeeper?
While Xero is designed to be user-friendly, working with a certified bookkeeper ensures you’re using the platform to its full potential. A Xero-certified expert can help you set up custom reports, automate repetitive tasks, and make sense of financial trends in your business. They’ll also keep your accounts tidy and compliant, freeing you up to focus on running and growing your business.
Small business accounting software will keep your business compliant–and your bookkeeper will love you for it
Xero is an excellent choice for small business owners seeking a comprehensive, user-friendly bookkeeping solution. Even if it offers advanced functionalities like inventory management, bank reconciliation, and expense tracking, it’s easy enough to use on your own and allows you to simplify managing your business finances by putting all your paperwork into the cloud. By choosing Xero for small business, you’ll have the tools and support you need to manage your business finances effectively and focus on what matters most.
Better yet, hand over your books and Xero account to a bookkeeper so you can focus on growing your business. With features like workflow automation, secure data storage, and multi-currency support, Xero makes practice accounting software a breeze for professionals. Contact a bookkeeper nearest you and experience the benefits of this powerful cloud accounting solution today!
