Mazuma vs Xero

There’s no doubt about it, both Mazuma and Xero are market leaders when it comes to what they do. Since their launch in 2006, Xero has set the benchmark for cloud accounting software. And since Mazuma launched in 2006, they have paved the way for Accountancy subscriptions for small and micro businesses. Both are revolutionary and high quality offerings.

When you’re deciding how to approach your small business bookkeeping and accountancy, one of the first things you’ll want to decide is whether to use a piece of software yourself and engage an Accountant in addition to this, or to engage an Accountant to do all of the work for you without you needing to spend time and money on software. 

At Mazuma, we work closely with small businesses who use Xero, and with even more who don’t and who opt to let us do everything for them. 

So what are the pros and cons of each approach?

Xero Pros

You can raise invoices, log your expenses and mileage and link it up to your business bank account via open banking. This means that you can see your information in real time, potentially allowing you a better insight into your business. You can also give your Accountant access so they can go in and make sure that everything is correct – you don’t want to be filing your VAT return via Making Tax Digital without having a professional look over it first!

Xero Cons

You have to do a lot of the grunt work yourself. While apps and integrations make doing activities like logging expenses and mileage easier, you are still responsible for categorising and submitting them into the app. Great if you love doing that sort of thing, not so great if you’re busy and you don’t keep on top of it. Research has suggested that many small business owners spend over 10 hours per month doing this sort of data entry activity in Cloud Accounting Software. That’s a lot of time you could spend running your business instead.

Real time information sounds attractive, but as with all software, the data is only as good as the data entered (rubbish in, rubbish out). Unless you’ve also got an Accountant in there in real time (and trust us when we say that no Accountant will be able to do that!), you could end up looking at reports and data that aren’t correct. There’s a reason that Accountants train for so many years after all.

Can a Xero subscription look at your specific business and tell you what is and isn’t a legal tax deductible expense? Can it advise you on when the best time to purchase assets is? Or the best combination of salary and dividends for you to stay tax efficient? No – that’s what Accountants do and why you’ll need one in addition to any software you use.

You’ll also be spending money on both a Xero subscription and an Accountant. The Xero standard plan is £24 a month – which is pretty reasonably priced if that’s all you’d have to spend. However, an Accountant will likely cost you a minimum of £500 a year on top of that. 

Compare that to the Mazuma starting package at £32 + VAT per month for absolutely everything you need, and using Xero may not be the most cost effective option for your small business.

Mazuma Pros

You have access to a qualified Accountant all year round as part of the subscription. This is absolutely invaluable when it comes to asking for a quick bit of advice or checking what the latest scary letter from HMRC means. Software can’t decipher that for you – but our Accountants can.

We do all the boring grunt work for you. All of that data entry, expense logging and bank reconciliation work is done by our highly qualified staff. Over the course of the year that will save you an awful lot of time and stress by just letting someone else deal with it for you. And you’ll have peace of mind knowing that the data is correct. We’ll also make sure that everything is submitted to HMRC and Companies House on time so you never have to worry about getting a late filing penalty.

Our pricing covers everything you need. There are no hidden bills or unexpected costs. As long as you are paying your subscription, we’re doing all the Accountancy and Tax work for you – as well as the boring bookkeeping and data entry!

You don’t need to be a tech fan to use Mazuma, (although we also welcome many a tech fan into our midst!) We have an app that allows you to upload your expenses and raise invoices (just like in Xero), but if you work in a physical world and still receive bundles of paper receipts each month, we can handle that for you too. You can use our Freepost service to send us the paperwork and we’ll digitise it and do your Accountancy work for you from those. We don’t force you to use any sort of software or app if you don’t want to. You’re running a business and have enough to think about – using fiddly apps or annoying software shouldn’t be another task on your to-do list.

We take care of preparing and filing all of your tax, payroll and accountancy returns to HMRC and Companies House. Because everything is in one place it makes your life easier knowing that a qualified Accountant is overseeing all the various filing deadlines for you. And there are a lot of filing deadlines! A piece of software might remind you of the deadline, but it’s up to you to get the work done to meet it. A small VAT registered Ltd Company with 1 member of staff on a weekly payroll will have around 60 filing deadlines to meet each year. At Mazuma, we’ll handle all of that for you.

Mazuma Cons

We don’t do any face-to-face meetings with clients. Nowadays many of even the most tech-enabled Accountants will still offer an end-of-year meeting or in-person catch-ups. We don’t offer this as it tends to push the price up for clients and if we’re entirely honest, isn’t necessary. Sure, maybe it’s nice to take a trip to your accountant’s office and feel a little special, but if the pandemic of 2020 has taught us anything, it’s that sometimes face-to-face isn’t the right way to go! We consistently rate highly for customer service with our clients without the need for an office visit, but if that’s a deal breaker for you then Mazuma may not be a good fit.

We don’t show you as many pretty graphs or display your Accounting information in real time. Why? Well as we have said before, reports are only as good as the data that goes into them. So we make sure that your reports are correct before we show them to you – and this means that we don’t work in real time. We feel that it’s better that you only work with the correct data at the right time, rather than all the data all the time. We may take a day or so to turn all the data and paperwork you give us into your reports and bespoke tax advice.

As Accountants we are here to help you run your business and deal with your accounts and tax compliance in a way that follows the rules of accounting and the rules of HMRC. Whilst real time information looks slick and fancy, it doesn;t necessarily help with us providing you great Accounting advice. So if you’re adamant you need real time information, then we may not be the perfect fit.

Mazuma vs Xero – who is best?

There’s no right answer here. If you love using software and updating things in an app then both Mazuma and Xero offer that option. But if you just want someone to take care of everything for you and truly delegate your accounts and tax, then Mazuma is the option for you.

Ultimately you need to be able to use a solution that offers you accuracy, time saving and peace of mind while you get on with running your business. Pick the option that you think will do that for you.