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IRIS vs Xero Software

IRIS and Xero are two of the UK’s largest accountancy sector software providers, with a broad range of features and services for small and medium-sized businesses in the UK. This IRIS vs Xero software comparison will explore the key features of both accounting platforms in order to help you decide which is the best fit for your business needs.

What is IRIS Software?

IRIS is one of the UK’s largest privately held software companies. The company provides a range of software solutions for finance, payroll, and HR, as well as accountancy firms and educational companies, aiming to help UK-based businesses automate critical day-to-day business tasks.

IRIS has been around since 1978 and is currently based in Slough, United Kingdom.

With over 40 years of experience, IRIS is currently trusted by over 120,000 organisations across the UK, from micro-businesses to FTSE-100 companies. In addition, up to 50,000 small and medium-sized businesses in the UK use IRIS’s cloud bookkeeping solutions, while around 18% of UK employees are currently paid with IRIS’s payroll solutions.

What is Xero?

Xero is a cloud-based accounting software platform that provides accounting solutions for small and medium-sized businesses. Based in Wellington, New Zealand, the software aims to help businesses keep track of their finances and streamline daily business tasks, such as invoicing and tax filing.

Xero was founded in 2006 by successful technology entrepreneur Rod Drury and small business accountant Hamish Edwards, who saw the potential for a cloud-based accounting solution that would be easy to use and accessible from anywhere in the world.

Since its launch, Xero has become one of the world’s leading accounting software providers, with over three million subscribers in 180 countries worldwide.

IRIS Key Features

IRIS Payroll

IRIS’s payroll removes the complexity of the payroll process and ensures that all your payroll data, from payslips to pensions and furlough payments, can be managed in one place.  Every day, around 335,000 organisations across the UK use IRIS’s payroll software to pay over 2.5 million employees.

IRIS Payroll Basics

One of the best parts about the IRIS Payroll software is that it provides a free Payroll Basics package for businesses with fewer than ten employees. In addition, the software is fully HMRC-recognised and also complies with the UK Automatic Enrollment legislation, ensuring accurate and efficient payroll at no cost whatsoever.

Here is a feature overview of the IRIS Payroll Basics plan:

  • HMRC recognised
  • Free for businesses with up to ten employees
  • Automatic calculations of PAYE, NI, and all other statutory payments
  • GDPR compliant and automatic data backup with each use
  • Produces pension reports and handles automatic enrollment
  • Creates and manages mandatory employee forms when you need them

If your business outgrows the free Payroll Basic package, you can easily upgrade to one of IRIS’s paid payroll packages, such as IRIS Payroll Business.

IRIS Payroll Business

IRIS Payroll Business is a payroll software designed specifically for businesses with up to 100 employees and ranges in price from £99 to £346. It boasts the following features:

  • A detailed holiday and absence diary
  • Online filing of forms with HMRC, including P45s
  • Compliance with UK Automatic Enrollment legislation
  • Ability to roll back past days, including payslips
  • Unlimited phone and online support

Payroll Business takes care of all the core payroll needs for businesses with up to 100 employees, but IRIS also has up to 23 other payroll solutions to choose from.

They include IRIS Fully Managed Payroll — the company’s payroll outsourcing service, and IRIS Payroll Professional — IRIS’s all-in-one, HMRC-recognised payroll software designed for Specialist Payroll Teams and Departments.

IRIS Accountancy Suite

IRIS has a market-leading accountancy suite that provides an extensive portfolio of products, ranging from tax and accounting software to practice management and compliance. The key features of the IRIS Accountancy Suite are:

  • Seamless integration with a suite of accounting products based around a central database.
  • Connectivity with leading third-party apps, including Xero, KashFlow, QuickBooks, FreeAgent, and others.
  • A wide range of compliance and productivity models, allowing you to create your own custom accounting solution.
  • Excellent client collaboration across IRIS’s cloud and desktop solutions

Here are only some of the products included in the IRIS Accountancy Suite:

  • IRIS Options — an entry-level offering for accountancy practices with 9 to 30 clients
  • IRIS Business Tax — allowing you to complete a tax return easily
  • IRIS VAT Filersubmit VAT returns to HMRC in compliance with MTD mandates
  • IRIS Personal Tax — HRMC-recognised and MTD-compliant personal tax accounting software
  • IRIS Practice Management — an integrated view of all client activities and data
  • IRIS Time and Fees — a powerful tool for recording time and monitoring work in progress, ensuring that all clients are adequately invoiced for the work done

IRIS HR Professional

IRIS has recently acquired the Staffology software and rebranded its cloud-based HR solution IRIS HR Pro as Staffology HR. Designed to help UK small and medium-sized businesses manage their workforce more effectively, the software is ideal for businesses with 10 to 250 employees and starts from £5 per month.

It includes the following features:

  • Onboarding and recruitment
  • Staff training
  • Plans for personal development
  • Rotas and timesheets
  • Holidays, overtime, and sick days management
  • GDPR compliant

Staffology HR also integrates with the Staffology Payroll software, making it even easier to manage your payroll and HR in one place.

Staffology HR is only one of IRIS’s HR solutions. The company also offers the IRIS Cascade HRi software, a flexible HR solution for large businesses with 250–10,000 employees, and an HR advice service designed to provide business owners unlimited support from experienced HR professionals.

As opposed to Iris, Xero doesn’t have a built-in HR solution. Still, the platform does offer integrations with several popular HR applications, including HR Partner — a comprehensive human resource management tool for small businesses.

Xero Key Features

Xero Payroll

Similarly to IRIS, Xero also offers an automated online payroll solution, allowing you to process a pay run, make bulk payments, and generate payslips for employees, all in just a few clicks.

Here are the key features of Xero Payroll:

  • HMRC-recognised, allowing you to submit payment and deduction details to HMRC on each payday and keep accurate digital pay records
  • Automatic calculations of tax, pensions, and leave
  • Ability to email payslips directly from Xero
  • Flexible pay calendars and pay rates
  • Built-in timesheet to track the hours worked
  • Ability to give employees limited access and let them submit leave requests and timesheets for review
  • Integration with pension providers

Xero Payroll is an optional add-on charged at £5 per month for your first five employees and an additional £1 for each new employee on your payroll. So, if you are running a smaller business with no more than ten employees, IRIS is the much more cost-effective option, as its Payroll Basics solution is entirely free.

Xero Invoicing

Xero provides an excellent invoicing solution with a good amount of automation and a reporting dashboard that makes it easy to stay on top of your payments in real-time.

To ensure you get paid on time, Xero can automatically email reminders to your customers, even before an invoice becomes overdue. The software also allows you to tailor the minimum owing limit and the days overdue to your preference, so you can avoid sending reminders for small amounts.

Customers can also view and pay the reminders online right away, and there are several online payment options available, including credit card, direct debit payments, PayPal and Stripe.

IRIS offers a similar option with its IRIS Payments solution, which is a part of the platform’s Accountancy Suite. The software enables invoice payment requests and allows you to receive payments directly from invoices, with money going straight to your bank account.

However, one slight drawback of Xero’s invoicing feature is that its cheapest plan limits the number of invoices you can send to only 20 per month, which some customers may find restrictive. To be able to send an unlimited number of invoices, you will have to subscribe to one of the platform’s higher plans.

If you are looking for web-based accounting software that offers unlimited invoices on all of its plans, FreshBooks is an excellent choice.

Xero Tax Planning

Xero is fully compliant with HMRC’s Making Tax Digital initiative, making it an excellent solution for filing VAT returns. The software includes VAT returns submission to HMRC in all of its plans, including the cheapest Strater plan.

In addition, connecting your bank account to Xero allows you to automatically import bank transactions and prepare your accounting overview for tax time.

Xero also provides a separate cloud-based accounting software called Xero Tax that aims to streamline the process of filing corporation tax and personal tax returns. It is available at no extra cost.

Similarly, IRIS also offers a comprehensive VAT filing solution with the IRIS VAT Filer software. The software makes it easy to submit VAT returns to HMRC in compliance with MTD mandates and comes with a range of other useful features, such as the ability to connect directly to HMRC for client data retrieval.

IRIS vs Xero Software: Pricing

Xero offers three pricing plans that users can subscribe to and pay on a monthly basis.

The most basic, Starter plan comes at £12 per month and is geared towards sole traders and self-employed people, as well as new businesses. It includes the following features:

  • Send quotes and a maximum of 20 invoices
  • Enter up to five bills
  • Bank reconciliation
  • Submit VAT returns to HMRC
  • Automatic CIS calculations and reports
  • Capture receipts and bills with Hubdoc

The next pricing plan is Standard, which is Xero’s most popular plan and costs £26 per month. This plan is designed for growing small businesses and includes all the features of the Starter plan, plus:

  • Unlimited invoicing and bills
  • Bulk reconcile transactions
  • Short-term cash flow dashboard (projection of the amount of cash your business will have in the following seven or 30 days)
  • Business snapshot dashboard (dashboard that shows important financial information, such as income and expenses, profitability, and more)

Xero’s last pricing plan is Premium, aimed at established businesses of all sizes that need more advanced features than the Standard plan offers. The Premium plan costs £33 per month and includes all the features of the Starter and Standard plans, and adds the ability to use multiple currencies.

All these plans have optional add-ons that come at an additional monthly cost, such as the Payroll add-on, available at £5 per month and an expense manager for £2.50 per month.

As opposed to Xero, IRIS doesn’t have a subscription-based model, and it doesn’t offer the option to choose between different pricing plans. Instead, you have to contact the company for a custom quote, depending on the specific needs of your business.

IRIS vs Xero Software: Support

Xero provides free online support 24/7. If you run into an issue while using the software, it is advisable first to visit Xero Centre — Xero’s comprehensive support centre that includes a searchable knowledge base, many how-to guides, video tutorials, and a community forum where you can ask questions and get answers from other Xero users.

If you can’t find a solution to your problem in the support centre, you can raise a case with Xero’s support team and send your query directly. Sadly, the company doesn’t offer inbound phone support, so there is no telephone number you can call, but it is possible for Xero’s support team to call you when you are in need of assistance.

In contrast, IRIS does offer phone support, and you can also get in touch with its customer support team via email.

Wrap Up

To conclude, Xero is cloud-based accounting software for small businesses that focuses solely on accounting. At the same time, Iris is a more comprehensive solution that offers everything from basic payroll to advanced compliance and practice management tools.

That makes IRIS suitable for businesses of all sizes — from small and mid-sized businesses to large enterprises, while Xero is best suited for small businesses with simpler accounting needs.

Now that we have looked at the main features of both accounting platforms, it is time to wrap up our IRIS vs Xero software comparison. If you are still not sure which small business accounting software is best for you, be sure to check our FreshBooks vs QuickBooks comparison next, where we compare two other popular accounting solutions.


Is IRIS Payroll cloud-based?

Yes, IRIS offers cloud-based payroll software, allowing you to access your data and run your payroll from anywhere.

Is Xero difficult to learn?

No, Xero has an intuitive and user-friendly interface and comes with a range of helpful features, such as an extensive knowledge base and video tutorials that can help you learn how to navigate the software.

Is Xero good for small businesses?

Yes, Xero is a great accounting solution for small businesses as it is affordable, user-friendly, and has many features that can help you run your business more efficiently.

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