Xero Accounting Software: Popularity, Usage, and Features Review

This literature review provides a comprehensive overview of the Xero accounting software, focusing on its popularity, usage, and key features, particularly within the Australian context. The review explores the increasing adoption of Xero in Perth, highlighting its cloud-based nature, ease of use, and ability to streamline bookkeeping, payroll, and banking activities. It examines the software's utility for businesses of all sizes, including start-ups and multinational corporations, emphasizing its scalability, multi-currency support, and integration capabilities. Furthermore, the review delves into Xero's features, such as expense management, online payments, and financial reporting tools, which contribute to efficient financial management. The literature also addresses the software's security, ease of use, and flexibility, making it a valuable resource for anyone seeking to understand the benefits and applications of Xero accounting software.

Literature Review

TABLE OF CONTENTS
Literature review..........................................................................................................................3
REFERENCES................................................................................................................................8

Literature review
Literature review is a summary of research of others on specific topic. The purpose of
literature review is to collect and evaluate secondary evidence and to generate an understanding
of topic. The topic of this literature review is the usage and popularity of Xero an accounting
software in Australia.
Theme 1: Popularity of Xero in Perth, Australia
According to Petratos & Faccia (2019, August) book keeping, payroll management and
banking is essential part of business activities and every organization whether it is small or large
is required to maintain books. That is why Xero has become a popular accounting software in
Perth, Australia. Xero book keeping is a cloud based accounting software which is a best means
for ending the problems related to book keeping in business. The accounting function of business
becomes very easy and effective due to this software. As per Mauricette, Wells & Haar (2022)
Xero enables business to get all their accounts updated as it is an online cloud based accounting
system which enables accountant of an organization to have access of software anywhere and at
anytime. The reconciliation of bank accounts and identification of problems and resolution of
them becomes very easy due to Xero accounting software. The author has stated that
functionality of Xero is better than all other accounting and book keeping software in Perth
Australia. This is the reason behind increase in popularity of Xero in Perth in 2022.
This accounting software has ability to do everything which business owner need in order
to keep a track record of accounting and other transactions and it gives detailed information
regarding profit and revenue of business. In terms of interface and scalability, Xero is more
preferable software as it has ability to update with growth and development of business. The
price charged by this software is based on volume of transactions in contrast to this Quick books
another accounting software charges based on number of users. According to Yau-Yeung,
Yigitbasioglu & Green (2020, October) Xero is the best reliable and lean accounting software for
start-ups and small businesses. Though Xero is developed keeping in mind small business
organizations but it has key features such as asset management, invoicing, multi currency
support which are used by large and multinational organizations. Therefore, it can be said that
Xero can be used by large and international business as it has features which are required for
accounting of these type of businesses. Streamlining with this accounting software will remove a
lot of burdens and worries of businessman as well as accountant as this software increases

efficiency of book keeping and accounting. The effectiveness and efficiency of maintaining
accounts and other transactions will help entity to save time and spend it on other essential
business activities which can increase profit.
Rahmayanti & Rahmawati (2020, April) had said that Xero is best accounting system for
start-ups and small business entities as provides flexible business platform. Every start-ups
requires tools and software which helps entity to grow and it also grows with business. It is a
customized software where business can add whatever and whenever they require in accordance
to growth of business. It also has capability to generate reports for KPIs, and other departmental
reports which are required with growth and development of business. Xero has made record
keeping simple as it is cloud based accounting system it has ability to bring bank feeds directly
to system and records are kept up to date. The development of new program in Xero has enabled
entities to get expert knowledge and support for development and growth of business. As Xero is
a cloud accounting software it strictly complies with cloud standards and also implemented
multiple layer of security to protect data and financial information. This data security makes
software reliable and safe to be installed in organization for the purpose of accounting and book
keeping. One of the major advantage of Xero is that it doesn't require any updates as automatic
updates happen in the background of computer server.
In contrast to many advantages there are some disadvantages of this accounting software.
According to Sutthikun, Thapo & Sahayrak (2018) initial setup of this accounting software can
be a bit confusing for people who doesn't have technical knowledge or are unfamiliar of book
keeping. Invoices and purchases orders are limited to 1000 per month which requires to be
increased. Xero software may not be good for business where there are lot of monthly
transactions. Keeping aside these limitations Xero is a better choice for accounting and nook
keeping specially for small business and start-ups. It is easy to understand the functions of this
software and the limitations mentioned can be rectified.
Theme 2: Usage and utility of Xero
Maruschak (2021) has given steps to use Xero accounting software in business. The very
first step is to watch Xero dashboard video which will gives a learning of how software is used
for accounting and payment purpose. Business entity who is implementing this accounting
software is required to set up all information of business which will include name, registration
number, registered address, logo, website and other essential details. There are various

accounting features in Xero which is not required by every business entity therefore, company
which is installing Xero is required to set financial informations related to business. The next
step is to set invoices with terms of payments and logo which will help in improving cash slow
of organization. Setting up of bank account details will enable software in effective
reconciliation of bank account and helps in online payment. The payroll system in this software
enables organization to monitor staff cost and maintains payroll cost at one place which is easily
accessible to accountant for monitoring and controlling payroll costs. Xero software has also
ability to give payment remainders which will help in fast payment.
There are various usage of Xero accounting software. In accordance to Schönfeldt & Birt
(2020) this software can be used for tracking and payment of bills on time and gives a clear
overview of accounts payable and cash flow. Organization is required to set remainders for
payments and it enables business to make payments on time. Expense management tool in cloud
accounting software enables business to keep updated with expenses and reimburse expense
claims. It gives a clear view of all expenses rendered by company per month and gives
management a view of where entity is spending unnecessarily or can cut cost. The accounting
software gives benefit of directly connecting with banks. Entity is required to add details of bank
accounts in software, and they will be able to see all bank related transactions through this
software and it is a secure means for banking transactions. Xero accepts online payments through
Stripes and other payment services by adding pay now button to online invoices. It also accepts
global cards and other cards for payment and it is a safe payment acceptance mode.
This accounting software is also used to prepare quotes according to requirement of
entity and its estimates. These quotes can be turned into invoices for making payments and it
also enables companies to track time and cost using app timer and location based tracking
system. Management can be able to monitor monthly profit margin on dashboards which enables
them to take corrective decisions through financial statement analysis for betterment and growth
of organization. Xero can also be used for straight forward recurring pay runs through online
payment mode. Payment of employees salary can be paid directly into their bank accounts or
payment can be also made manually. The software uses third party app for more efficient payroll
solutions. Payroll app in Xero keep basic pay records of employees online and enables payment
of salary through online mode.

As per Popivniak (2019) Xero can be used for various accounting and book keeping
features that can be beneficial for entities for maintaining books and records. The reconciliation
feature in this accounting software reconcile bank transactions on daily basis. It checks and
accepts automated reconciliation and also reconcile bulk bank transactions. The software also
gives complete picture of contact history and emails in context to customers or suppliers at one
place. Capture bills, receipts, bank transactions, etc. by taking photos, scanning emails and
upload documents. The user of Xero can get access of all data that are stored in cloud from
anywhere and it also gives facility of adding information without data entry. Management can
track finances with accurate accounting and can get expert advice via online in real time. It can
also be used to keep a track of inventories with their quantity and price and use these details for
further placing orders. Xero enables to make and get payments in over 160 currencies through
multi currency accounting. This also gives a complete view of how change in exchange rate can
affect cash flow and profit of organization. Entity can also generate report in local as well as
foreign currency. It enables entities to create and send purchase orders online using purchase
order software and can keep track of orders. It is also used for monitoring future cash flows and
financial health and metrics of companies.
Theme 3: Features and characteristics of Xero
Yaremenko and et.al. (2021) had stated that for the growth and development of business
it is essential for keeping close check on financials of entity and Xero enables organization to
monitor financial data as it gives clear view of financials. There are many more features of Xero
which makes it most popular and beneficial accounting software for all types of business entities.
It is a cloud accounting software which gives facility to user to get access from anywhere and
anytime and can be accessed in smartphone without requirement of any IT software. It also
enables users to make changes and such changes can be viewed by other users too. Users of Xero
can easily track all expenses and create invoices according to their requirements and invoice
which is sent has payment option which enables receiver to click on payment button and make
payment using cards or any other online methods.
The main feature or characteristics of Xero software is that it is easy to use and ready to
use. According to Hayes (2020) the users of this software doesn't require any expertise
knowledge or training for operating the software as it provides videos which provides detailed
instructions for using accounting software. The user of software is not required to make any

adjustments before using the software. One of the key feature of accounting software is that is
has ability to integrate with other accounting systems which enables entities in easy sharing of
data and information. For instance, a service providing entity can use Xero and service M8
simultaneously to keep track of services and to generate invoices and receives payments. The
software provides variety of price plan options which is beneficial for all types of entities as they
can choose plan according to their requirements at affordable price. There is no limit on number
of users i.e. it can be accessed by unlimited users at same package price. The price charged by
Xero is according to featured required by entity not according to number of users. It is a flexible
software where plans and other features can be changed with change in requirements of
organization. As it supports multiple users the information and data stored in cloud of software
can be used and viewed by individuals at different levels.
According to Dmytrenko and et.al. (2020) one essential feature of Xero is that it is a
secure and reliable software and is backed by strong team of developers who are engaged in
continuous improvement in software. This is the reason that it takes feedback from its users and
try to make changes in system which can give good experience to its users. The data and
information stored in cloud of software are protected by Amazon web service which is one of the
best cloud protecting infrastructure. Accounting software also has fraud protection which
protects data and information from theft and scams. There are various features in software which
makes process to complete within time and also avoid duplicate accounting or creating of
invoices. Xero provides mobile app for all smart phone users which provides facility to user to
access accounting and all financial information anywhere and at anytime.

REFERENCES
Books and Journals
Dmytrenko, O. M. and et.al. (2020). Organizational and Managerial Aspects of Automation in
the Internal Accounting of an Enterprise. International Journal of Economics &
Business Administration (IJEBA). 8(Special 1). 154-165.
Hayes, A. (2020). Pay day for tradies. Electrical Connection, (Winter 2020), 78-79.
Maruschak, L. (2021). Accounting software in modern business. Advances in Science,
Technology and Engineering Systems. 6(1). 863.
Mauricette, J., Wells, P., & Haar, J. (2022). User perceptions of cloud-based small business
accounting software. Pacific Accounting Review, (ahead-of-print).
Petratos, P., & Faccia, A. (2019, August). Accounting information systems and system of
systems: Assessing security with attack surface methodology. In Proceedings of the
2019 3rd International Conference on Cloud and Big Data Computing (pp. 100-105).
Popivniak, Y. (2019). Cloud-based accounting software: choice options in the light of modern
international tendencies. Baltic Journal of Economic Studies. 5(3). 170-177.
Rahmayanti, A. Y., & Rahmawati, D. (2020, April). Digital accounting for small to medium
enterprises using mobile applications. In 3rd International Conference on Vocational
Higher Education (ICVHE 2018) (pp. 172-176). Atlantis Press.
Schönfeldt, N., & Birt, J. L. (2020). ICT Skill Development Using Excel, Xero, and Tableau.
Journal of Emerging Technologies in Accounting. 17(2). 45-56.
Sutthikun, W., Thapo, R., & Sahayrak, K. (2018). Accounting in the Cloud. International
Journal of Integrated Education and Development. 3(2). 19-27.
Yaremenko, L. and et.al. (2021). Information Technologies of Accounting and Analysis in
Modern Companies. International Journal of Computer Science & Network Security.
21(5). 151-159.
Yau-Yeung, D., Yigitbasioglu, O., & Green, P. (2020, October). Cloud accounting risks and
mitigation strategies: Evidence from Australia. In Accounting Forum (Vol. 44, No. 4.
pp. 421-446). Routledge.