Xero

Xero is cloud accounting software for small and growing businesses. It connects to your bank, imports transactions, and gives you everything needed to keep proper books: reconciliation, invoices and quotes, bills, expenses, reporting, VAT or sales tax, and — in the UK — payroll on the larger plans.

Xero says it is trusted by more than 5 million customers and works with a partner network of around 250,000 accountants and bookkeepers. It's especially strong in the UK, Australia and New Zealand, where it is one of the accountant-favourite platforms, and it also sells US plans.

Its standout commercial difference from many rivals is that there are no per-user licence fees. You can invite your team, your accountant and your bookkeeper without paying per seat — though some features, such as payroll and expense claims, are included for a set number of people on each UK plan.

Xero's AI assistant, JAX (Just Ask Xero), is built in at no extra charge. It answers questions about your finances, creates and sends invoices and quotes, reads uploaded documents and, on the right plans, reconciles bank transactions automatically. Xero labels JAX beta, and says your data is not used to train the third-party models behind it.

How Xero works

A typical setup and monthly routine is:

1. Connect your bank accounts so statement lines flow into Xero automatically.
2. Reconcile: match each bank line to an invoice, bill or transaction — or let auto-reconcile handle high-confidence matches.
3. Send quotes and invoices; customers can pay online from the invoice.
4. Capture bills and receipts with Smart Document Capture, so supplier details are read in automatically.
5. Run payroll and expense claims if your plan includes them.
6. Review real-time reports and the cash flow forecast, then submit VAT to HMRC (UK) or track sales tax (US).

Key capabilities

Bank reconciliation — Statement lines import automatically and are matched to transactions; auto-reconcile is included from Grow (UK) and Growing (US) and is an add-on on the entry plans.

Invoices and quotes — Unlimited on every plan except the entry tier, which allows 20 invoices a month; customers can pay online.

Bills and bill payments — Automated bill entry and online domestic bill and payroll payments, with a set number of payments included on UK plans.

Smart Document Capture — Reads receipts and bills into your books.

VAT and Making Tax Digital (UK) — HMRC-recognised software that submits VAT returns to HMRC and is ready for MTD for Income Tax, plus CIS calculations for construction.

Payroll — Included for 1, 5 or 10 people on UK Grow, Comprehensive and Ultimate, and £1.50 per person on Ignite. In the US, payroll is an add-on powered by Gusto.

Expenses and mileage — Claims for 1, 5 or 10 users on UK plans; employee expense claims on US Established.

Cash flow forecasting — 30, 60, 90 or 180 days ahead depending on plan.

Multi-currency — Comprehensive and Ultimate in the UK, Established in the US.

Projects and analytics — Time and cost tracking for projects, KPI and ratio analysis, industry benchmarking and budgets with smart suggestions on the top plans.

JAX — An AI finance assistant for questions about your numbers, invoice and quote creation, document Q&A, cash flow projections and benchmarking.

1,000+ app integrations — Payments, inventory, CRM, e-commerce and more through the Xero App Store.

Xero plans explained (UK)

UK prices exclude VAT and rose on 1 September 2026 for new and existing customers.

Simple — £7 a month, for businesses not registered for VAT: 10 invoices, quotes, bank reconciliation, receipt capture and MTD for Income Tax, without bills, VAT returns or payroll.

Ignite — £18 a month: quotes and 20 invoices, 10 bills, VAT returns, MTD for Income Tax, CIS, a 30-day cash flow forecast, payroll at £1.50 per person and domestic payments at £0.20 each. Auto-reconcile is an optional add-on.

Grow — £39 a month: unlimited invoices and bills, automated bill entry, payroll for 1 person, expenses for 1 user, 5 included domestic payments, dashboards, a 60-day forecast and auto-reconcile.

Comprehensive — £55 a month: multi-currency, payroll for 5, expenses for 5 users, 10 domestic payments, a 90-day forecast, health scorecards and budgeting.

Ultimate — £70 a month: payroll for 10, expenses and projects for 10 users, 15 domestic payments, a 180-day forecast, KPI analysis and industry benchmarking.

Company accounts and tax is an optional extra at £120 a year excluding VAT. New UK customers are typically offered a large introductory discount (recently 90% off for 6 months) or one month free.

Xero plans explained (US)

Early — $27 a month: quotes and 20 invoices, 5 bills, reconciliation, Smart Document Capture, W-9 and 1099 management, sales tax and a 30-day forecast.

Growing — $59 a month: unlimited invoices and bills, automated bill entry, dashboards, a 60-day forecast, budgets and auto-reconcile.

Established — $97 a month: multi-currency, projects, employee expense and mileage claims, international bill payments, KPI analysis, benchmarking and a 180-day forecast.

US payroll (powered by Gusto) and Inventory Plus are optional add-ons. Introductory offers are common, such as 80% off for 3 months, or one month free. Subscriptions renew monthly until cancelled, and after upgrading you must wait a month before moving to a cheaper plan.

Who Xero is for

UK small businesses — HMRC-recognised MTD for VAT and Income Tax, CIS and payroll built into the main plans.

Teams that want to add users freely — no per-user licence fees.

Businesses working with an accountant — a very large accountant and bookkeeper network, especially in the UK, Australia and New Zealand.

Businesses that rely on add-on apps — more than 1,000 integrations.

Getting the most out of Xero

Choose Grow rather than Ignite if you send more than 20 invoices or enter more than 10 bills a month — the caps arrive quickly.

Reconcile little and often; auto-reconcile plus JAX keep the backlog small.

Check how many payroll people and expense users your plan includes before you hire.

Plan for the full price after the introductory discount ends, and note that Xero raises prices from time to time.