Xero Review 2026: Features, Pricing, Pros & Cons

Let’s examine some of the most important features available within Xero.

1. Online Invoicing

Xero provides built-in online invoicing tools that allow businesses to create and send professional invoices.

You can customize invoices, set payment terms, monitor their status, and automate payment reminders.

Businesses can also provide online payment options, helping customers pay invoices more conveniently.

For companies sending invoices regularly, having invoicing connected directly to the accounting platform can reduce manual data entry and make receivables easier to track.

2. Bank Connections and Reconciliation

Bank reconciliation is one of Xero’s strongest accounting capabilities.

Businesses can connect eligible bank and credit-card accounts so transactions flow into Xero.

Xero then helps identify potential matches and categorize transactions, making it easier to keep accounting records aligned with actual bank activity.

According to Xero, its platform provides access to bank data from more than 21,000 financial institutions globally. 

For businesses processing many transactions, this automation can save considerable bookkeeping time.

3. Bills and Accounts Payable

Xero provides tools for recording, tracking, and paying business bills.

Users can monitor:

• Outstanding bills
• Payment deadlines
• Supplier information
• Accounts payable
• Upcoming cash requirements

Keeping bills within the same accounting environment provides businesses with a clearer picture of what they owe and when payments are due.

Xero’s US business plans also currently include standard domestic ACH bill payments, while other payment methods may carry additional fees. 

4. Expense Management

Businesses can use Xero to record expenses and manage employee expense claims.

Receipts and expense information can be captured digitally, reducing dependence on paper records.

Depending on the plan, employees can submit expense and mileage claims for review.

This can be particularly useful for businesses with employees who travel or frequently incur reimbursable business expenses.

5. Financial Reporting

Accurate reporting is essential for understanding the financial health of a business.

Xero provides accounting reports that allow businesses to monitor financial performance using up-to-date accounting data.

Businesses can use reports to better understand areas such as:

• Income and expenses
• Cash flow
• Accounts receivable
• Accounts payable
• Profitability
• Financial performance
• Business trends

Xero’s accounting dashboard also provides a quick overview of bank balances, invoices, bills, and other financial information.

6. Cash Flow Forecasting

Cash flow is often one of the biggest concerns for small businesses.

Xero includes cash-flow forecasting capabilities, although the forecast period varies depending on the subscription.

Current US plans provide forecast periods of up to:

Early: 30 days
Growing: 60 days
Established: 180 days

Longer forecasting periods can help businesses anticipate future cash requirements and make more informed spending decisions. 

7. Project Tracking

Service businesses often need to understand whether individual projects are actually profitable.

Xero’s project functionality can help businesses:

• Record project time
• Track project costs
• Create quotes
• Monitor budgets
• Generate invoices
• Evaluate project performance

Project time and cost tracking is currently included with the Established US plan. 

This can make Xero useful for agencies, consultants, professional services companies, and other project-based businesses.

8. Multi-Currency Accounting

Businesses operating internationally often need to invoice customers or pay suppliers in different currencies.

Xero provides multi-currency accounting capabilities for eligible plans.

The platform supports international transactions and can help businesses account for currency exchange rates.

Xero states that its multi-currency functionality supports transactions in 160+ currencies. 

Multi-currency accounting is currently part of the Established US plan.

9. Inventory Management

Xero includes basic inventory functionality for businesses that sell products.

Businesses can monitor stock quantities and use inventory items when creating invoices and purchase orders.

For businesses with more sophisticated inventory or supply-chain requirements, Xero can also connect with specialized third-party inventory applications.

10. Xero Mobile App

Business owners are not always sitting in front of a computer.

The Xero Accounting app makes it possible to perform various financial tasks while away from the office.

Users can manage activities such as invoices, expenses, bills, and reconciliation from supported mobile devices.

This can be especially convenient for freelancers, contractors, consultants, and business owners who frequently work remotely