Business Accounting

Which Type of Subscription Level in Xero is Best For Your Business?

2021-05-24 | by Gene B. Reynolds, CPA

Many of our clients use the QuickBooks accounting software platform to run their business. However, Xero has emerged as a true alternative that offers many great advantages for businesses.

You can’t go wrong with either QuickBooks or Xero. There may just be certain aspects of Xero that are a better fit for your business. One of those aspects could be the Xero subscription plan options. Xero offers three different subscription levels for three different stages of business growth:

  • Early stage: $11/month
  • Growing stage: $32/month
  • Established stage: $62/month

An overall benefit is that Xero offers an unlimited number of users and an unlimited number of Charts of Accounts (COAs) at each subscription level. Comparatively, QuickBooks has limitations on users and COA lines. So, if you need to allow multiple users to have access to your accounting software platform, Xero could be the right fit.

Let’s further examine the Xero subscription levels to see which is the right fit at this stage of your business.

Find The Ideal Xero Subscription Level For Your Business

Xero was created to cover the baseline essentials of accounting and provide software support for everyday business tasks, while also providing room to grow as your business grows. This is reflected in their pricing plans.

Early Plan in Xero

The Early plan ($11/month) is ideal for new businesses, entrepreneurs, start-ups, and self-employed that have yet to scale. You are trying to get off the ground with a new business and you need accounting software support to help you stay organized and get on-track.

Included Features:

  • Send quotes to customers and up to 20 invoices per month.
  • Enter up to 5 bills per month. This is ideal if you have a limited number of vendors that are you paying when you start your business.
  • Reconcile bank transactions. You can sync bank statements with Xero to track transaction details.
  • Capture bills and receipts. Xero uses Hubdoc to capture and store your documents in one place.

Not Included Features:

  • The Early plan does not allow you to track multiple currencies. If you are not working with international customers, this should not be an issue.
  • You cannot track projects at the Early stage. If you need to track projects, you’ll need to advance to the more expensive Established plan.
  • Claim expense tracking is not included. If you have already have employees and need to capture employee expense claims, you’ll need to jump to Established.

Growing Plan in Xero

The Growing plan ($32/month) is the most popular for Xero customers. This is ideal for growing small businesses that have a higher volume of transactions and/or need a higher level of support to streamline accounting.

Included Features:

  • Send an unlimited number of invoices and quotes to customers.
  • Enter an unlimited number of bills. You can track bills, schedule bill payments, and submit bills in batches.
  • Reconcile bank transactions and sync data with your bank statements.
  • Capture bills and receipts using Hubdoc.

Not Included Features:

  • Similar to the Early plan, you cannot use multiple currencies, track projects, or claim expenses. If these features are critical to your business at this stage of growth, then you will need to consider advancing to the Established plan.

Established Plan in Xero

The Established plan ($62/month) is ideal for growing businesses that are in the position where they need a greater level of accounting software support, but they have not quite scaled to the point where they need an enterprise-level solution like Oracle NetSuite. Or, this plan is ideal for companies that need to track financial activity by jobs or projects.

Included Features:

  • Unlimited invoices and quotes, unlimited bills, bank reconciliations, and Hubdoc features that are included in Growing.
  • You can track multiple currencies, supporting your international business activity.
  • You can track projects, which is critical for many clients that we support in industries such as manufacturing.
  • You can support expense claim tracking. In this plan, your team can capture costs, submit claims, approve and reimburse claims, and view spending activity.

An Additional Feature: Payroll with Gusto

No matter which Xero subscription level is right for your company, you can add on payroll functionality through Gusto, a leading self-service payroll provider for small businesses.

Xero offers a Gusto payroll integration option with every plan. The integration starts at $39/month. Then, there is an added cost of $6/month per person. Features that are included with Gusto include:

  • Online payroll for all 50 U.S. states.
  • Automated payroll functionality, including payroll taxes, deductions, and filings.
  • Self-service features where employees can update personal information and view paystubs/W2s.

Gusto for payroll is a popular add-on for the Growing and Established plans where you have started to increase headcount, you have significantly expanded your roster as your business has grown, or you have added remote employees scattered across the U.S.

The option could also work with the Early plan if you already have employees early in the life of your business. You can use this option to streamline payroll so that you can spend more time and energy on growing the business.

Need Support Selecting a Xero Subscription Plan?

Our CPA firm is certified as advisors in Xero. We can help you select the ideal pricing plan that works for your size company, your stage of business growth, your industry, and the specific challenges that you need to address in running your business.

If you decide to switch to Xero or start using an accounting software platform for the first time, we encourage you to act quickly. The subscription price point has increased by $2 at each pricing level since the end of 2020. Make sure you take advantage of today’s subscription prices to support your business for the long haul.

We can help! Call us today or send us a message to let us know that you would like more information on using Xero as your accounting software platform.

About the Author

Gene B. Reynolds, CPA

Gene is the Founder and President of Reynolds and Associates, a Houston-based CPA Firm. He has spent 42 years helping Houston entrepreneurs navigate their enterprises through both calm and stormy waters.


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