Xero is an excellent accounting platform for start-ups and smaller businesses. However, as organisations grow, many discover they are spending more time working around limitations than running the business.
If your team relies on spreadsheets, duplicate data entry, disconnected add-ons or manual reporting, it may be a sign you've outgrown Xero. Here are 12 warning signs that it's time to consider a fully integrated ERP platform such as MYOB Acumatica.
Like many of us, the longer you do something for, the harder it becomes to change your ways. It's human nature really. And This is often the case we see when it comes to changing software. For many businesses who start out using products for sole traders and small business, making the leap towards ERP can be daunting. However, it doesn't need to be.
And to put our cards on the table - sticking with a product like xero due to sentimental value, familiarity, or a lack of choice is not doing you any favours. We understand that it has served you well over the years. Maybe you’ve been avoiding the tell-tale signs that things aren't going as they should be. Perhaps you're telling yourself that as long as your operation stays afloat, things will be ok.
Let's look at what happens when you get past buzzwords like "beautiful", "intuitive" and "visibility". This helpful blog identifies the most common indicators your business has outgrown Xero’s capabilities.
Will things magically get better if you continue to stick your head in the sand?
Drawing on over two decades worth of experience in the ERP sector, we created this blog to help you easily identify common pain points your business might be feeling when you've outgrown off the shelf accounting software packages such as Xero.
Most importantly, these pain points come from years of conversations we've had with businesses. Many of whom have successfully made the transition from being a small business with large aspirations, to a thriving enterprise by working with the team at BusinessHub.
We hope this insight will help you work out if you’ve outgrown Xero, and assess your own future business needs and growth aspirations.
This is the most common sign - reports start to slow down or time out. It happens because Xero was not built to accommodate large transaction volumes. As a result, the more your business and data grows, the less Xero supports your operations.
One of the main weaknesses of Xero is that it's designed to only manage one business. Granted there are workarounds, they are not ideal and can be expensive. This often leads to inaccurate reporting across your entities.
Xero is not designed to work alone, so larger businesses will need multiple add-ons to meet their needs. The down side? Multiple add-ons are expensive and limited. This increases the total cost of ownership. Over time, it may be more expensive than investing in an ERP system.
As your business grows, your processes become more complex. And while multiple add-ons can take on the role of band-aid to fill in the gaps, they are can become expensive and slow your system down. As you add more products, complex supply chains, employees, locations and customers to your business your solution may start causing more costs, delays and errors than it’s worth.
Inventory is often one of the first areas where growing businesses start to feel restricted by Xero. As product ranges expand, warehouse operations become more sophisticated and customer expectations increase, businesses need deeper inventory visibility and control.
Common warning signs include:
If inventory management is becoming a daily challenge, it may be time to consider an ERP system that combines financials, inventory, purchasing and fulfilment within a single platform.
Xero supports multiple countries, offering varying levels of technical support. Having a locally based partner located in Australia like BusinessHub is important as we understand the local environment. We know how your system has been implemented and customised. And we can provide the tailored support you need to succeed.
Using Xero plus add-ons means your data could be sitting in separate databases that do not integrate in realtime. This means that you have to download multiple reports from different add-ons and manually pull them together. Not only is this time consuming, it increases the risk of errors and offers no real-time insights. In comparison to an ERP system, Xero fails to offer the same level of control, flexibility and precision that growing businesses need.
One of the clearest signs a business has outgrown Xero is when staff spend significant time entering the same information into multiple systems. Examples include:
Every manual process increases the risk of human error while reducing productivity. Growing businesses should be automating these activities rather than expanding them.
Xero doesn’t have sophisticated permission functionality nor the ability to set up automated workflows. This means you have no choice but to continue manually approving requests. This takes away the you could be spending on your business and increasing revenue.
Many businesses don't realise they've outgrown Xero until spreadsheets become a critical operating tool. If important information lives outside your accounting system, your team may be spending hours every week:
Spreadsheets are useful analysis tools, but they should not be the foundation of business processes.
Xero is designed for small businesses, which means that many growing businesses will have to use spreadsheets to fill in the gaps. You may have multiple staff spending time on manual and repetitive tasks, or joining data in spreadsheets from various add-ons and reports. Time that could be used on revenue raising activities.
Xero doesn’t offer the level of flexibility or user access levels like an ERP. This lack of safeguards leaves you open to data breaches and fraud. Add-ons also require logins too, so granting or revoking access means repeating the same across multiple apps, which increases the risk of errors.
Expanding into new countries often exposes limitations in accounting systems that were originally designed for simpler operations. If your organisation operates across multiple countries, currencies or tax jurisdictions, you may encounter:
ERP solutions are designed to support growth across regions while providing consolidated reporting and a single source of truth.
Yes. Many growing businesses continue to use Xero successfully. However, once your organisation begins managing multiple entities, increasing inventory complexity, multiple locations, large transaction volumes or extensive reporting requirements, you may find yourself relying on spreadsheets, manual processes and additional software to bridge capability gaps.
The best time to move to ERP is before workarounds become business-critical. If your team is spending increasing amounts of time on manual reporting, duplicate data entry, spreadsheet management or reconciling disconnected systems, an ERP platform can help streamline processes, improve visibility and support future growth. Learn more here>
As we have shown in this blog, most small businesses start off using off-the-shelf products to meet their basic accounting needs. But it doesn't take long for successful, expanding businesses to outgrow the capabilities of those platforms.
When that happens, the frequently asked question is: what should I do next? Some will persist with Xero - using all sorts of cumbersome workarounds, like adding more and more plug-ins to extend functionality. Unfortunately, this approach can be messy, expensive and complex to say the least.
It might be time to take a closer look at an intuitive ERP solution like MYOB Acumatica. It's the perfect platform for successful businesses to use as a catalyst for growth aspirations. It delivers financials, customer relationship management, inventory and warehouse management, professional services automation and eCommerce capabilities in a single solution. Not to mention it works seamlessly with MYOB Acumatica Payroll and Workforce Management.
MYOB Acumatica allows businesses to interact with their customers in new ways, providing the necessary functional depth to support complex business models and processes. It contains the integration complexity associated with additional applications and provides unsurpassed insight across all functional capabilities through a unified data model.
In conclusion, while an off-the-shelf accounting software package like Xero may have initially fit your needs, investing in an integrated and functionally rich platform like MYOB Acumatica will put your business on the fast track from local to legendary.
