You know that feeling… Panic! Grab Laptop. Write.

We talk about Xero quite a lot here at BlueHub; in our blog, on our website and all over our social media. Last night I was sat on the couch, with a glass of Red in hand and then it hit me…

“I need to write a post explaining what Xero is!”

A quick overview of Xero and cloud computing
This quick but informative read will give the non-Xero initiated a clear overview of;

1. What Xero is
2. Why Sage is dead
3. Why people love Xero
4. Where using Xero can take your businesses

Local vs cloud (what is what)
What is the cloud? (In under 1 minute)

I have read many lengthy explanations of what the cloud is, for the most part, they are overcomplicated and leave people confused. The main issue in explaining what the cloud is is word choice; we all use different words to describe the same things.

Here it is: your computer/phone/tablet (device) uses some software that is stored locally, and some that are “on the cloud”.

Local means that the software/system/program/app (software) is stored on the device. Software like Word, Excel and iTunes are locally stored or non-cloud.

Cloud means that the software is stored not on your device (non-locally) and you access it through the internet. Anything you use through your internet browser is “on the cloud”.

• Facebook – on the cloud
• Wikipedia – on the cloud
• Office 365 – on the cloud
• Xero – on the cloud

Simply; if something is “online” or “on the internet” then it is “on the cloud”. If something is “cloud” or “on the cloud” it is “on the internet” or “online”
Cloud = Internet

Advantages of cloud
Complex and large software packages like Wikipedia or business systems require a lot of computer power and memory. It would be impossible for everyone to be able to afford computers that are able to store and run something like Wikipedia, which is over 5Terabytes. The people at Wikipedia have their own servers that hold the software and we all access it by typing into our internet browser.

*Bonus cloud feature – as cloud software is accessible with only an internet browser, you can access your cloud software from anywhere and on any device with an internet browser.

Xero: Key feature
• Remote work – access your accounts anywhere, any time and from any device
• Fast smart bank reconciliation – automatically feed information from your bank and payment services to Xero.
• Manage inventory – speed up invoicing and track sales and purchases.
• Easy invoicing – create professional invoices and receive updates when opened
• Add-ons – open a world of financial and operational add-ons

Accounting software BX (before Xero)
Prior to the emergence of Xero the world of accounting software was dominated by locally held systems and one line of systems in particular…


At BlueHub we fought and struggled with integrating our bespoke systems to the Sage line of products for over 10 long years.

Sage and other traditional systems had two functions:

• Accounting
• Payroll

And Sage did/does these functions well, but Sage does not play well with others and integration is the key to creating process enhancing end-to-end systems.

On top of this Sage and other traditional accounting system are locally held and required the expensive purchase, maintenance and updates of servers. Furthermore, when these traditional systems require updates they come at a heavy cost and changes need to be made onsite.

Why Xero is better
Xero is one of a few cloud accounting systems, but it has a few key features inherent from Xero’s emergence in 2006 that makes it superior.

These features have increased the usefulness of Accountants in your business, made managing and growing your company easier and lead to a community of add-on developers; thanks to Xero’s open and supported API.

A better way to work together
Share and limit access to your latest business figures with selected members of your team and provide access for your accountant to see the financials of your business in real-time.

Live Bank Feed
The Bank feed feature automatically imports your latest banking, credit card and PayPal transactions. Smart reconciliation learns about your business and helps speed up reconciliation with suggestions that let you consolidate with just one click.

Connect with your customers
Send customised professional invoice, receive reports of when an invoice is opened and use add-ons to further improve your invoicing process to dramatically improve cash flow, by scheduling bill payments and automating invoices and chaser reminders.

Remote Access
Access your accounts and back office Xero Add-ons from anywhere, at any time and on any device PC, Mac, iPhone or any other smartphone, you choose.

Open a world of add-ons
Add-ons put the X-factor in Xero. There are currently over 350 different Add-ons available on the Xero Add-on Marketplace. These add-ons range from financial add-ons that expand on Xero’s key financial features like accounting and invoicing, to industry specific back office and operational systems.

Financial Add-ons
The financial add-ons are designed to improve or add to Xero’s key financial features. Add-ons like:

Receipt Bank – A handy tool that removes the need for you to hold on to piles of receipts. Simply take a photo from your smartphone and Receipt Bank sends it to Xero and you can throw the paper in the bin.
Chaser – Most B2B businesses are owed tons of money from old invoices (£55bn currently owed to UK SMEs, reported by Sage Pay). We were one of them until we implemented Chaser into our business. Chaser sends automated reminders that can scale in severity to help remind clients that they owe you money.

Operations add-ons
The back office and industry-focused operational add-ons offer businesses enterprise level systems at an SME budget and paired with Xero’s API give you end-to-end business systems.

There are add-ons for a range of industries and purposes, including; Customer relationship management (CRM), point of sales (EPOS), stock management, booking systems, websites and project management.

Who uses Xero?
Designed for SME
Xero was designed for small and medium business and this is still Xero’s key demographic. Everything from the Xero software to all the add-ons are developed with SMEs in mind.

Used by large turnover companies
We have worked with multiple Xero users that have annual revenues of over £25million. While these businesses are not the target user for Xero they find the system gives them the flexibility and group work that they require to optimise their business.

Room to grow (1 man businesses to £25 million turnovers)
From the range of the user, we see from one-man businesses to multi-national multi-million-pound business Xero leaves you a lot of room to grow from expense claims and budgets to financial reports and forecasts.

What do you get from choosing Xero and Xero Add-ons?
Xero knows the value of an active accountant. Rather than having an accountant that rears their head at the end of your financial year.

This new generation of Xero accredited accountants, play an active role in the management and growth of a business. Xero features an accountant login so your accountant can log in and see how your business is doing.

Easy to use
The user interface of Xero is perfectly simple. Gone are the days of getting lost in Sage’s busy user interface. Find what you need easily, you are never more than a couple of clicks away and Xero has an amazing support feature including a range of tutorials to help you if you get stuck.

Xero has a great built-in reporting suite for comprehensive and flexible interactive reports and budgets in real time.

There are great Add-ons like Spotlight Reporting that build on Xero’s reporting power to give user advanced and customisable reports.

Xero integrated business
Integrated systems are the key to increasing overall business efficiency and reducing time and money spent on admin, allowing you to redirect resources to revenue generating activities and focus on growth.

There are three main ways to integrate other offline and cloud systems to Xero:
1. Add-ons – Xero Add-ons from the Marketplace are all naturally integrated with Xero and for the most part are “plug and play” ready to go integrations.

2. API integrations – most cloud system (including Xero) feature an API, which is like an open plug for developers to write code for. At BlueHub our Xero integration teamwork to develop custom API integrations to Xero.

3. Bespoke integration – API integration is a form of bespoke integration. Our specialised Xero integration development team are able to take it a step further to integrate non-API cloud systems and even offline local system to Xero.

What the future looks like
To us here at BlueHub, we feel the future for small and medium business but also for larger companies, is a move away from local systems in general.

With Microsoft promoting Office 365 and the rising popularity of Google Apps a trend is moving towards cloud-hosted software over downloadable products. In 2015 the trend of devices is clear tablets overtake laptops and smartphones overtake tablets. As smaller devices have less computation power they require the cloud more.

With internet speeds around the world improving and the size of software packages growing as more features are added, access to the cloud will become more needed, reliable and cost-effective. Demand for local servers will reduce due to the cloud becoming more favoured as it does not require expensive maintenance and updates like local servers.

Xero’s future will see it continue to grow in popularity currently there are 540,000 users worldwide, which has grown from 100,000 in 2012. The main areas of growth are likely to be the UK and Quickbooks dominated the USA.

Xero like most of the cloud generation of software companies, Xero are constantly testing and building new developments to their software. From adding new features to refine current ones.