Sage and Xero are both accounting software for certain target markets in the United Kingdom. Xero emphasises the needs of self-employed people and smaller businesses, while Sage has various offerings for businesses of different sizes. When comparing Xero with Sage, there are many differences in the features available that impact their appropriateness for businesses in different industries and of different sizes.
Essentially, Xero can be a good fit for smaller businesses and sole traders. Sage – particularly Sage 200 – expands on the basic accounting functionality to meet the needs of medium-sized businesses and even larger companies. With Xero, you choose between three software plans:
- Starter
- Standard
- Premium
There is some difference between the offerings with each plan, but all are suited to managing fundamental accounting requirements for smaller businesses. Sage 200 is a full-fledged ERP and finance management system for SMEs and can be deployed as the Standard or Professional version. You can learn more about the differences between the two versions in our informative article Sage 200 – Standard vs Professional Compared.
Sage also offers other cloud finance solutions:
- Sage Accounting (for self-employed and small businesses).
- Sage 50 (for businesses with up to 50 employees).
- Sage Intacct (aimed at SMEs and departments of larger organisations).
In this article, we will be comparing the features of Sage 200 and Xero to help you assess which will be a better fit for your business.
What are Xero and Sage 200?
Xero is a popular cloud-based accounting software solution aimed at self-employed and small businesses. It has more than 3 million subscribers and offers its products in a SaaS model via subscription. The company is headquartered in New Zealand.
Sage 200 is an ERP solution offered by Sage Group PLC, a tech leader for cloud accounting software. With Sage 200, small-medium sized businesses gain new levels of visibility, flexibility and efficiency to manage their finances, accounts, people and operations. Sage is actually the third-largest ERP software supplier and the largest supplier of accounting software to small businesses. They are headquartered in Newcastle Upon Tyne in the UK.
How are Xero and Sage 200 helpful for managing business finances and accounts?
It is common for people to ask which is better when it comes to Sage 200 vs Xero. The bottom line is that companies must go with the finance management solution that is best equipped to meet their accounting requirements. This can be very different for one business than it is for another.
The entry-level features of Sage software and Xero are very similar, with almost identical monthly subscription costs. As with most accounting software, you can expect the following core features:
- A general ledger.
- Accounts payable and receivable.
- Invoicing.
- Sales orders.
- Purchase orders.
- Cash Book and bank reconciliation.
- Inventory management.
- Online VAT submissions and MTD.
It is when your accounting processes become more complex, with a need for a greater depth of management and automation, that the differences between Sage 200 and Xero become more apparent. As your business grows, you will need a more flexible, configurable and scalable system for managing your finances, with a greater range of accounting modules and more intelligent power built in. This is where Sage 200 comes into its own.
Comparing Xero with Sage 200
While both are known for providing accounting management software at a reasonable price, they are not the same. Sage 200 is several upgrades away from the basic Sage software that resembles Xero most closely. Both Sage Accounting and Xero offer the following core features:
- Enter bills.
- Send quotes and invoices.
- Reconciliation of bank transactions.
- Submission of VAT returns to HMRC.
- Automatic CIS calculations with reporting.
- Capturing of bills and receipts.
- Use of multiple currencies.
- Bulk reconciliation of transactions.
- Snapshots of business and short-term cashflow.
There is also a small list of optional add-ons for Xero, including payroll, expenses, project tracking and submitting CIS returns. Third-party apps are available to offer more functionality, so you may find other solutions that help the system work for you.
Sage 200 is, undeniably, more expensive than Xero, but it is packed with advanced features to provide superb automation, powerful analytics and the management of complex accounting requirements. Sage 200 goes far beyond what Xero can do as it is a business finance management and ERP solution, with the ability to add and remove modules for things like Manufacturing, Supply Chain, BOM and more. The key features include:
- In-depth customisation, configuration and scalability.
- Advanced financial management.
- Four key nominal ledgers.
- World-class database (Microsoft SQL).
- 3-tier nominal structure.
- Management of complex business processes.
- Integration with Microsoft Office 365.
- Supply chain management.
- Multi-currency functionality.
- Custom financial periods.
- Powerful dashboards and reporting.
- CRM integration.
- Project management capabilities.
- Batch/Serial number processing.
- Manufacturing with multiple warehouse options.
- Sales, marketing and service.
- Bill of materials.
Sage 200 is perfect for fast-growing businesses and those that consider themselves to be medium-sized, built for up to 200 users. It can handle up to 20 analysis codes for additional reporting purposes and up to 9 million transactions can be processed.
Cloud Accounting
The cloud accounting basis of both Xero and Sage 200 Standard means you will not have to invest in the installation and management of on-premises infrastructure. For Sage 200 Professional you may choose to install on-premise hardware, however an alternative to this could be cloud-hosting, on a platform like Microsoft Azure.
You will also have real-time access to all the available data and the convenience of accessing the system from anywhere, with automatic updates when they become available.
The Verdict
Both Xero and Sage 200 offer a number of useful tools and features for businesses. The key difference is that Xero is designed to merely keep you operating at the level you are at now, while Sage 200 is designed to help you tap into your true growth potential.
It gives you a broad range of capabilities that go way beyond mere finances and accounts, empowering you to automate core processes, access valuable insights into your full range of operational data and make informed decisions to drive growth in your industry.
As you grow, it can grow with you, incorporating more personnel and adding additional modules as and when you need them. It also provides everything you need to expand into new territories with ease.
In a nutshell, if you are a small or medium business with an eye towards growth, Sage 200 is far better equipped to accommodate your needs than Xero. But if you do not plan or expect to undergo growth as a business, Xero may provide you with everything you need to manage your basic accounting needs.
Why choose Eventura for your ERP project?
Eventura have been helping businesses in their digital transformation journey for two decades. From the implementation of industry-leading ERP solutions such as Sage 200, to helping them move their entire operations to the cloud and away from costly and restrictive on-premise solutions.
As well as being NetSuite Solution Providers, Sage 200 Partners and Microsoft Gold Partners, we also offer a wide range of managed IT services, meaning we can take your business as a whole and help it achieve digital transformation.
If you would like to speak to one of our experts, you can request a free call back here.
