Xero Price Increase 2024 and Alternatives

How would you like a 180% price increase for using Xero? That’s what some users will have to pay to continue using Xero due to changes to the plans as well prices. Most plans will either be ceased or will have restricted add-ons which could force an upgrade.

Other users that can stay on the same plan will see a 6-12% price increase in 2024. Here we explain the 2024 Xero Price Increase. How much Xero’s Prices are increasing. Why Xero’s prices are increasing. What changes are being made to the Xero plans. Also, the alternatives to Xero. With CloudBook Online Accountants, you can choose whichever software suits you the best.

Xero Price Increase 2024

Why are Xero’s Prices Increasing Again?

Xero are launching newly named and streamlined plans with easier access to tools and more key features included. However, some of those additions are minor and some significant add-ons are being removed. We haven’t noticed any other recent changes or improvements. So we guess the other main reason for the price increase is inflation.

The Xero Price Increase

Xero’s prices will increase from 12 September 2024. Also, changes to the plans (see below) will start to be phased in from this date. These changes mean you could have to upgrade your plan. Here are the Xero Price increases for 2024 and the past few years for their main plans.

PackageStarterStandardPremiumUltimate
New nameIgniteGrowComprehensiveUltimate
2020 price pcm£10£24£30na
2021 price pcm£12£26£33na
2022 price pcm£14£28£36£49
2023 price pcm£15£30£42£55
2024 price pcm£16£33£47£59
Average increase pa14%8%12%10%

180% Xero Price Increase?

In addition to the main plan increases above, changes to the plans mean that you may have to upgrade your plan to get the same services.

The VAT Cashbook plan that was £11pcm is being ceased. So VAT registered Cashbook users will need to upgrade to the Ignite plan at £16 which is a 45% price increase. The VAT Cashbook, Non-VAT Cashbook (still £7pcm), and Ledger (still £2.50pcm) plans are basic versions of Xero available through Xero Partners only (e.g. accountants).

Add-ons are being removed from all except the Ultimate plan (see below). Upgrading from Starter/Ignite to Standard/Grow is a 120% price increase! Upgrading from Standard/Grow to Premium/Comprehensive is a 57% increase. Upgrading from Premium/Comprehensive to Ultimate is a 40% increase.

It could be even worse. A business on the Starter plan with Payroll for 6 employees is currently paying £21pcm. To have payroll for more than 5 employees they will need to upgrade to Ultimate for £59. A 180% price increase!

What’s changing with the Xero Plans

Apart from new names, there are changes to each plan, as follows:

Starter/Ignite: Create 10 bills per month instead of 5. Add-ons no longer available: Expenses, Payroll, Projects and Analytics Plus.

Standard/Grow: Process Expenses for 1 and Payroll for 1. Pay directly from Xero for up to 5 bills per month. Projects and Analytics Plus no longer available. Payroll is included but limited to 1.

Premium/Comprehensive: Process Expenses for 5 and Payroll for 5. Pay directly from Xero for up to 10 bills per month. Analytics Plus included. Projects no longer available. Payroll is included but limited to 5.

Ultimate: Process Expenses for 10 (was 5). Use Projects for 10 (was 5). Pay directly from Xero for up to 15 bills per month. Use Analytics Plus. Payroll is included for 10 and can be increased.

Has Xero improved?

Xero is certainly improving all of the time, however those changes are small. For example the automatic matching of bank transactions to invoices and bills has improved. Where the changes are not small, they usually come at an extra cost, such as the Expenses or Projects add-ons. Even though you now get 1 or 5 Expenses and Payroll users on some plans, the core platform has not improved much . Certainly not enough to justify up to a 60% increase in the Xero price since 2020. Having said that, it is still the best online accounting software for small businesses. So if you can afford to continue using it, you should.

Alternatives to the Xero Price Increase

Use CloudBook Online Accountants

With CloudBook Online Accountants, unlike other accountants, you can use whichever software you prefer. We don’t make you use Xero’s accounting or payroll software, so you don’t have to pay their high prices. As well as that, you’ll probably save on accountancy fees too, with our low fixed monthly fees.

Downgrade Xero Plan

To avoid the price increase, could you downgrade your Xero plan? The Starter/Ignite plan now has unlimited bank transactions and allows up to 20 sales invoices and 5/10 bills per month. Instead of using bills you could just attach them to the bank transaction. The Standard/Grow plan is only missing multi-currency which is only essential if you have foreign bank accounts. If you have few foreign currency transactions you could convert them manually.

Use Move My Books

Move My Books is a free service that helps you move your accounting data to Xero, QuickBooks or Sage Accounting. This could be useful if you are thinking of moving from Xero to QuickBooks or Sage.

Pandle

Pandle is unlimited and comes with multi-currency and bank feeds for £5pcm. We can get it for £2.50pcm. It’s relatively new, sometimes slow, and takes a while to get used to. However, it should cope with most things you use Xero for.

QuickBooks

QuickBooks is our next most popular software after Xero. It does most things that Xero can do and is quite easy to use. Their Self-Employed package is £10pcm, Simple is £14pcm, Essentials is £28pcm, Plus is £38pcm.

FreeAgent

FreeAgent is geared towards small business and freelancers. Natwest, RBS and Mettle bank customers can get it for free. We can get it for our clients for £23pcm. Or it costs £33pcm

Kashflow

Kashflow is less popular than it used to be. However, if you have straightforward accounting transactions, it can work well for you. Starter is £11.50pcm, Business is £23.50pcm or with payroll is £31.50pcm.

QuickFile

Quickfile is used by a few of our clients. It’s less easy to use but it can be free if you have less than 1000 entries per year, otherwise it’s just £60pa. If you want automated bank feeds, that’s an extra £15pa.

MyT

MyT accounting is a new software with a built-in receipt reader using AI to categorise your costs automatically. The Standard subscription is £10pcm, Plus is £20pcm and Pro is £30pcm.

Sage Accounting

From our experience Sage have struggled to keep up with their online competition. As such, we still don’t have any clients using Sage at the time of writing but we’d be happy to help you use it. However, it’s not much cheaper than Xero. The Start price is £15pcm. Standard is £30pcm and Plus is £39pcm.

Spreadsheets

If you’re not VAT registered, you could use a spreadsheet (e.g. Excel, Google Sheets, Numbers) to do your accounting. While we prefer online accounting software, if your accounting transactions are straightforward, a tidy spreadsheet would be ok. All transactions need to be categorised. Read more on our bookkeeping using a spreadsheet page.

Our Own Software

We have our own free software which very basically allows you to list your sales and expenditure. It can also submit MTD VAT returns.

Other Online Accounting Software

There are many other online accounting software platforms available. We’ll consider doing your accounts etc using any online accounting software. Look out for ones that can link to UK bank accounts and are MTD compliant.