It’s been my fortune to attend some classes and meetings about the new online accounting system, ‘Xero’.
It’s located at http://www.xero.com.
This accounting software program was developed in New Zealand for many years. So what might appear to be a new and upcoming software program, is actually a road tested software program that is nearly equivalent to QuickBooks or the Sage products. It rethinks some of the basic propositions that we have become accustomed to working with PC based systems. Many times there has been the call for QB Online to become exactly as the PC version of QuickBooks. Xero is proof that maybe QB Online shouldn’t try to do that.
So what makes it different?
Xero and QB Online both pull down feeds from your bank accounts. That is true of most automated systems like Mint, Outright, and Less Accounting. The difference is the way that the information is treated after that.
QB Online starts to automatically post transactions, using tiny print, stripping off the vendor information and treating every location of Starbucks as a separate vendor. (It takes it’s cue from the credit card identification system.) Automatically post all the transactions in QB Online, and well, unless you lead an extremely simple life and only go to one coffee shop or gas station or parking lot, and it’s all over the place. Hundreds of transactions are unclassified expense or income. ATM deposits are of a particular problem.
Xero does it a bit differently. It encourages you to look at the transactions on a daily basis. The screen interface is in a large font. It allows you to make notes about what you don’t understand. And best of all it allows you to make rules. The rules allow you to say: “with Starbucks in the name” it should be coded to “Meals and Entertainment”. Whew. That’s a bit more sensible.
There are more improvements, such as storing published reports, making footnotes on the reports, and more fun stuff.
Xero should be definitely be looked at for your small business software. It’s not to the point where there is zero data entry. But what little there is, it seems easier to complete.