Which Xero Plan Is Right for Your Business?
A simple, no-jargon guide for South African business owners
Xero is one of the most popular cloud accounting systems in South Africa, but choosing the right plan can feel confusing. The good news? The differences are actually quite simple once you strip away the accounting language.
Below is a plain-English explanation of each Xero plan, starting from the most basic to the most advanced.
Xero Ledger Package
Best for: Businesses that only need year-end or compliance reporting
This is the most basic Xero option.
✔ You can record transactions
✔ Your accountant can prepare financial statements
🚫 No invoicing
🚫 No VAT functionality
🚫 No bank feeds
In simple terms:
This plan is like a digital filing cabinet. It’s mainly used when your accountant does most of the work and Xero is only needed for reporting purposes.
Xero Cashbook Package
Best for: Small businesses that don’t invoice from Xero
✔ Bank feeds (your bank transactions flow in automatically)
✔ VAT tracking and VAT reports
✔ Basic cash tracking
🚫 No invoicing
In simple terms:
If you send invoices from another system (or very rarely), but want VAT and bank transactions handled properly, this plan does the job.
Xero Starter Package
Best for: Very small or early-stage businesses
✔ Invoicing (up to 20 invoices per month)
✔ Bills (up to 5 supplier bills per month)
✔ Bank feeds
✔ VAT
🚫 Strict limits on invoices and bills
In simple terms:
This is ideal if your business is just getting started and you issue only a handful of invoices each month. Once you grow, you’ll likely outgrow this plan quickly.
Xero Standard Package
Best for: About 80% of businesses
✔ Unlimited invoices
✔ Unlimited bills
✔ Bank feeds
✔ VAT
✔ Full reporting
In simple terms:
This is the most popular plan and suits most SMEs. If you invoice customers, pay suppliers, and want proper management reports, this is usually the right choice.
Xero Premium Package
Best for: Businesses dealing with foreign currencies
✔ Everything in Xero Standard
✔ Foreign currency invoicing
✔ Multi-currency reporting
In simple terms:
If you invoice or pay in USD, EUR, GBP, or any other foreign currency, you’ll need this plan. If you only operate in rands, you don’t.
Quick Summary
- Ledger – Reporting only
- Cashbook – VAT + bank feeds, no invoicing
- Starter – Very small businesses with low invoice volumes
- Standard – Most businesses
- Premium – International or foreign-currency businesses
Not Sure Which One You Need?
Choosing the wrong plan can mean:
- Paying for features you don’t use
- Or worse, not having the features you actually need
At Thornberry, we’re a Xero Platinum Partner, and we help clients choose the right setup from day one—then scale it as the business grows.
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