Software review
Xero review: we ran a full month of books in it
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The short answer
Xero's September profit and loss matched our answer key exactly, on cash and on accrual, under one switch. It imported our bank statement file without a bank login, had an expense category for every item in our test, and matched deposits by reading the invoice number in the bank description.
It suits a freelancer who wants the books built from the bank statement. Watch four things: automatic invoice reminders are switched on, invoice emails carry the logged-in person's own name with their own email as the reply-to, a bank account with no feed needs an account number, and the $150 partial payment was proposed against the wrong client's invoice.
Task by task
We ran one made-up month in Xero's free trial, on the Early plan. The method is at the end of this page.
| Task | What happened in Xero |
|---|---|
| 1. Set up the business, add 5 clients | Short setup. Business structure had to be set by hand (it started as "Unspecified"). Address, phone and email were empty: none of the account owner's personal details were copied into the business profile. The settings save gave no confirmation message; a reload showed it had saved. Contacts imported from a CSV using Xero's fixed column names (we needed only name and email), with a summary before we committed: "5 of 5 contacts will be imported." |
| 2. Create 12 invoices | CSV import on Xero's standard heading names. We had to look up the income account code and the tax type first. The page asks for US date format and whether amounts include tax. Invoices arrived as 12 drafts totaling $8,425.00 and had to be approved. Automatic reminders were on by default, with a banner saying Xero would remind clients 1 day before the due date and 7 and 14 days after; we turned them off before approving. Approving sent nothing. |
| 3. Record 20 expenses | Coded from the bank statement in the reconcile screen. The US chart of accounts had an account for every one of our 11 categories: 6 with the same name, 5 under the nearest name (for example Software and subscriptions went to "Software & Web"). Every spent line needed a contact, so we created 20 vendor contacts. Xero pre-filled repeats from earlier lines. For one font license it pre-filled a vendor we never entered ("Font Awesome") with the wrong account; we replaced both. |
| 4. Import the bank statement, match it | We added the bank account "without a bank feed", which required an account number (we used a placeholder). The CSV upload mapped Date, Description and Amount automatically: "28 statement lines were imported. 0 were duplicates." Xero proposed a match for every deposit and 7 were right, including both $1,500 Northgate deposits, picked by the "INV-" number in the bank description. |
| The partial payment | Xero proposed Maple Street Realty's $150 invoice for Bluefin Yoga Collective's $150 payment, with that wrong invoice pre-ticked in Find & Match. We unticked it, picked the right invoice and used Split for the part payment. The account then reconciled, with a statement balance of $4,962.72. |
| 5. Check a partial payment, send a reminder | The balance was correct: paid 150.00, due 150.00. There is no "send reminder" button, because Xero's reminders are the automatic schedule. A manual reminder meant emailing the invoice again with a new subject; Xero's history records it as another "Invoice Sent". The first time we opened an invoice, a full-screen "Set up invoice and payments" page came first. |
| Sending invoices | Two-step login had to be set up before the first send. The email went out under the logged-in person's own name, with that person's own email as the reply-to. Subject and message were editable on the trial and the PDF was attached by default. "Hi [Contact First Name]," showed as "Hi ," because our imported contacts had no first name. In the To box, pressing Enter after typing a new address picked another contact's saved address; clicking away from the box kept what we typed. |
| 6. September profit and loss | Cash: income 5,575.00, expenses 612.28, net 4,962.72. Accrual: income 8,425.00, expenses 612.28, net 7,812.72. Both matched the answer key exactly. Export: PDF, Excel, Google Sheets; the PDF downloaded directly. The accounting-basis line is optional on the report, and it was off on our PDF copy. |
What Xero did well
- Ready-made categories. Every expense in our test had a home in the US chart of accounts from the start.
- Deposit matching by invoice number. It read "INV-1006" in the bank description and picked the right $1,500 invoice when more than one was possible.
- Bank statement upload. A CSV came in without connecting a bank, with columns mapped for us and a duplicate check.
- Learns repeats. The second coworking pass came pre-filled from the first.
- Reports. Cash and accrual on one switch, both exact, and a direct PDF.
- No personal details copied into the business profile.
Where Xero tripped us up
- Automatic reminders are on by default and start emailing clients once invoices are approved.
- A bank account with no feed needs an account number, and the field cannot be left empty.
- A contact is required on every expense line.
- The invented "Font Awesome" vendor suggestion.
- The wrong-client partial-payment match, with the wrong invoice pre-ticked.
- The full-screen invoice setup page when first opening an invoice.
- A settings save with no confirmation.
- The To box swapping in another contact's address when we pressed Enter.
- Xero did not save a new email address on the contact: the next Email window offered the contact's own address again.
- The US setup guide's payroll card says "Calculate tax, super, and leave", and "super" is an Australian term.
Price check
| Plan | Monthly price | Notes |
|---|---|---|
| Xero Early | $27 | Send quotes and 20 invoices, 5 bills (the plan our trial ran on). Auto-reconcile is an optional $5.00 per month |
| Xero Growing | $59 | Auto-reconcile included |
| Xero Established | $97 | Multiple currencies, projects, expense claims. Auto-reconcile included |
Prices are the regular monthly prices on Xero's own pricing page, read on October 22, 2026. The page also showed lower introductory prices for the first months. Prices change; check the pricing page before you buy. Xero's page lists no free plan.
Xero Early's limit matters: our test month had 12 invoices, under its 20. Xero's page says the invoice limit applies to both approving and sending invoices. Check on Xero's pricing page how the limit is counted before you choose Early.
Who should pick it
- You want your books to start from your bank statement, with categories ready: Xero. Turn off automatic reminders until your client emails are right, and check who invoice emails will appear to come from.
- You can read a bank description and fix one wrong match: the partial payment needed a manual fix, so check any match involving two invoices of the same amount.
- You send a lot of invoices on a budget: Early is capped at 20 invoices, so check the limits on Xero's other plans before you choose.
- You want a free option: Xero's pricing page lists none. See the comparison pages below.
Compare it
How we tested
We made up one month for a one-person web design business, Riley Park Design (September 2026): 5 clients, 12 invoices totaling $8,425, 20 expenses totaling $612.28, and a 28-line bank statement with one partial payment. We ran the same six tasks in Xero's free trial and checked its profit and loss against an answer key worked out from the test files.
An AI assistant carried out the tasks in our own trial account. A person did the sign-ups and logins and approved every email and download. So we report the steps and problems for each task, not minutes. Test emails went to our own address, and every client in the test is made up.
The test files are the same for every tool we review, so results line up across pages. How we test lists every task and the answer key.
Tested October 21, 2026. Screenshots on file.
Try it: Xero