Two different tools for two different problems

The most important thing to understand about this comparison is that Xero and Obzimo are not the same category of software. Xero is cloud accounting software. Obzimo is an all-in-one business management platform that includes accounting.

That distinction matters because it changes the question you should be asking. It's not "which has better invoicing?" (they're both good). It's "do I need five separate tools to run my business, or could one platform handle everything?"

If you only need accounting, Xero is a strong choice. If you need accounting and HR and payroll and CRM and project management, then the comparison isn't Xero vs Obzimo: it's Xero + BreatheHR + Pipedrive + Asana + a payroll provider vs Obzimo alone.

Xero bank feeds

£15/mo minimum

Cheapest plan with bank connections

Obzimo bank feeds

£0/mo

Included on every plan, including Free

Even the simplest use case (connecting your bank account so transactions flow in automatically) costs £15/month on Xero. On Obzimo, bank feeds are included on every plan, including the free tier. That's £180/year before you've sent a single invoice.

Feature-by-feature comparison

Here's what each platform includes out of the box, no add-ons, no third-party integrations, just what you get when you sign up.

Capability Xero Obzimo
Invoicing & credit notes ✓ ✓
Bank reconciliation ✓ ✓
Bank feeds (live connections) ✓ (from £15/mo) ✓ Free
Expense tracking ✓ ✓
VAT returns (MTD-compliant) ✓ ✓
Multi-currency Premium tier Professional tier
Quotes & estimates ✓ ✓
Financial reports ✓ Advanced ✓
Payroll (PAYE/RTI) Add-on (£5 + £1/emp) ✓ Included
HR & employee management ✗ ✓
Leave management ✗ ✓
Employee directory & org chart ✗ ✓
CRM & sales pipeline ✗ ✓
Project management Premium only ✓
Time tracking Premium only ✓
Operations & inventory Basic ✓
Purchase orders ✓ ✓
Document management File attachments ✓ Full system
Team chat ✗ ✓
Third-party app marketplace ✓ 1,000+ apps API + webhooks

On pure accounting features, Xero and Obzimo are closely matched. Xero has a more mature reporting engine and a larger third-party ecosystem. Obzimo includes payroll at no extra cost and covers six additional business functions that Xero doesn't touch.

Key takeaway

Xero is deeper in accounting. Obzimo is wider across your entire business. For most UK small businesses with employees, the breadth is more valuable, because accounting is only one of seven functions you need to run.

Pricing: what you'll actually pay

Headline pricing can be misleading. The real question is: what's the total monthly cost for everything your business needs?

Xero's UK pricing

Xero offers three tiers in the UK:

Note that bank feeds (the ability to connect your bank account and pull in transactions automatically) require at least the £15/month Starter plan. There is no free way to get bank feeds on Xero. Payroll is a further add-on: approximately £5/month + £1 per employee. For a business with 10 employees on Xero Standard with payroll, expect to pay around £48–65/month, for accounting and payroll only.

Obzimo pricing

Obzimo uses per-employee pricing with every module included on every plan:

A 10-employee business on Professional: £30/month. That includes accounting, bank feeds, payroll, HR, leave management, CRM, project management, operations, documents, and team chat, with bank feeds included even on the free tier. See full pricing details.

Total cost of ownership

This is where the comparison becomes stark. A UK business with 10 employees needs accounting, payroll, HR, CRM, and project management at minimum. Here's the realistic cost:

Function Xero + separate tools Obzimo (all-in-one)
Accounting, invoicing & bank feeds £33–75/mo £30–50/mo
Everything included
(bank feeds from £0)
Payroll add-on (10 employees) £15/mo
HR & leave (e.g. BreatheHR) £20–45/mo
CRM (e.g. HubSpot, Pipedrive) £15–40/mo
Project management (e.g. Asana) £20–40/mo
Document & file storage £10–15/mo
Monthly total £113–230/mo £30–50/mo
Annual total £1,356–2,760/yr £360–600/yr

The maths is straightforward: a Xero-centred stack costs three to five times more than Obzimo for the same business, and that's before factoring in the hours lost to context-switching between six different apps. We covered those hidden costs in detail in Do You Really Need 6 Apps to Run Your Business?

Key takeaway

A 10-employee UK business can save between £756 and £2,160 per year by replacing a Xero-based multi-tool stack with Obzimo, before accounting for time saved on admin, data re-entry, and integration maintenance.

UK compliance: MTD, PAYE, and GDPR

Compliance is non-negotiable for UK businesses. Here's how both platforms handle the essentials:

Requirement Xero Obzimo
MTD for VAT ✓ ✓
HMRC VAT submission ✓ ✓
PAYE payroll & RTI Paid add-on ✓ Included
P45, P60, payslips Paid add-on ✓ Included
Statutory pay (SSP, SMP, SPP) Paid add-on ✓ Auto-calculated
Pension auto-enrolment Via integrations ✓
GDPR compliance ✓ ✓
PII encryption at rest (AES-256) ✗ ✓
Right-to-erasure (automated) Manual process ✓ Auto PII redaction

Both platforms handle Making Tax Digital for VAT. The key difference is payroll: Xero charges extra for it. Obzimo includes payroll with full PAYE, RTI submissions, statutory payments, and payslip generation on all paid plans at no additional cost. If you're running payroll for a UK small business, that's a meaningful saving.

On data protection, Obzimo goes further than industry standard: all personally identifiable information is encrypted at rest using AES-256-GCM, and right-to-erasure requests trigger automated PII redaction rather than simple soft deletion.

The UK-native advantage

Xero is a New Zealand company that adapted its global product for the UK market. Obzimo was designed from day one exclusively for UK businesses. In practice, this means:

For a UK business owner, the difference between "works in the UK" and "built for the UK" shows up every time you run payroll, process a leave request, or file a VAT return: fewer workarounds, fewer configuration steps, fewer places where a global default doesn't quite match UK rules.

Where Xero wins

This is an honest comparison, so here's where Xero genuinely outperforms Obzimo:

  1. Third-party app marketplace Xero's ecosystem of 1,000+ integrations is its single biggest competitive advantage. If you need connections to industry-specific tools (Shopify, Stripe, specific POS systems, or niche vertical software) Xero's marketplace is unmatched. Obzimo offers API access and webhooks, but the pre-built integration library is smaller.
  2. Accounting depth For businesses with complex accounting needs: multi-entity structures, advanced multi-currency with foreign exchange gains/losses, or deep customisation of chart of accounts: Xero's accounting module is more mature. Obzimo covers the accounting needs of most small businesses, but enterprise-grade financial complexity is where Xero's specialism shows.
  3. Accountant ecosystem Many UK accountants have standardised on Xero's practice management tools. If your accountant manages your books directly in Xero and relies on its accountant dashboard, switching creates friction for them. Most accountants are happy with standard financial reports, but it's worth checking first.
  4. Brand maturity Xero has been operating since 2006, is publicly listed, and has millions of subscribers worldwide. Obzimo is newer and built specifically for the UK market. Some businesses prefer the reassurance of an established brand.

Where Obzimo wins

And here's where Obzimo has a clear advantage:

  1. Total cost of ownership One subscription replaces five or six. For a 10-employee business, that's a saving of £756–2,160/year in subscription costs alone. The gap widens as your team grows.
  2. Everything in one place One login, one interface, one data model. Employee data, financial data, customer data, and project data all live in the same system. No manual data re-entry, no broken integrations, no switching between tabs.
  3. Payroll included (not extra) Xero charges an add-on fee for payroll. Obzimo includes payroll with PAYE, RTI, statutory payments, and payslips on all paid plans at no extra cost.
  4. HR, leave, and people management Employee profiles, leave management, org charts, team chat, and document management are all built in. Xero offers none of these.
  5. CRM and sales pipeline Contact management, deal tracking, quotes with e-sign, and revenue forecasting are included. With Xero, you'd need a separate CRM subscription.
  6. Free tier with all modules Obzimo offers a genuine free plan for up to 5 employees that includes every module. Xero has no free tier, even the cheapest plan is £15/month.
  7. UK-first design Obzimo is built exclusively for UK businesses: sterling-first, HMRC-compliant, UK employment law baked in. Xero is a global product adapted for the UK.

Who should choose Xero

Xero is the right choice if:

Who should choose Obzimo

Obzimo is the right choice if:

Xero is the best tool for the accounting job. Obzimo eliminates the need to have six separate jobs by being the only tool you need.

Migrating from Xero to Obzimo

If you've decided to switch, the migration is simpler than most people expect:

  1. Export your Xero data. Contacts, invoices, bills, and chart of accounts can all be exported as CSV files from Xero's settings.
  2. Import into Obzimo. The guided import wizard maps Xero's CSV columns to Obzimo fields automatically. Most imports finish in under an hour.
  3. Set opening balances. Enter your account balances as of the switchover date. Your accountant can verify these.
  4. Run parallel payroll. Process one payroll cycle in both systems to confirm the numbers match.
  5. Set up the extras. Add your employees, configure leave policies, set up your CRM contacts and sales pipeline: the functions Xero never covered.
  6. Cancel old subscriptions. Once verified, cancel Xero and any other tools Obzimo has replaced.

Most businesses complete the full migration in one to two weeks. Don't try to import years of historical transactions: bring across your active customers, suppliers, employees, and current-year balances. Your Xero data remains accessible as an archive.

The bottom line

This isn't about whether Xero is good software: it is. It's about whether you want to pay for five separate tools when one can do the job. If you're a UK small business with employees, Obzimo replaces your entire SaaS stack at a fraction of the cost: accounting, payroll, HR, CRM, projects, and operations in a single platform. For a 10-employee business, that's a saving of up to £2,160/year, and hours of admin time every month.

Frequently asked questions

Is Obzimo cheaper than Xero for a UK small business?

For businesses that need more than accounting, yes. Xero costs £15–75/month for accounting alone, plus add-ons for payroll, and you still need separate tools for HR, CRM, and project management. Obzimo includes all of these from £0 (up to 5 employees) or £3/employee/month on the Professional plan. A 10-employee business typically saves £960–1,860/year in total software costs.

Can Obzimo replace Xero completely?

For the vast majority of UK small businesses, yes. Obzimo includes invoicing, bank reconciliation, expense tracking, VAT returns with MTD compliance, and payroll with PAYE/RTI, all the core accounting functions Xero provides. The main gap is Xero's large third-party app marketplace. If you rely on specific Xero integrations, check whether Obzimo covers that functionality natively before switching.

Does Obzimo support Making Tax Digital (MTD)?

Yes. Obzimo supports MTD-compliant VAT return submission directly to HMRC, just like Xero. Both platforms are HMRC-recognised for MTD for VAT. For a full guide, see Making Tax Digital: UK Small Business Guide.

How long does it take to migrate from Xero to Obzimo?

Most businesses complete the migration in one to two weeks. Export your contacts, invoices, and chart of accounts from Xero as CSV files, then use Obzimo's guided import wizard to map the data. Set your opening balances, run one parallel payroll cycle to verify, then cancel your old subscriptions.

What does Obzimo include that Xero doesn't?

Obzimo includes HR and employee management, leave tracking, built-in payroll (no add-on cost), CRM and sales pipeline, project management with time tracking, operations and inventory management, document management, team chat, and an employee directory with org chart, all in a single platform.

Is the Obzimo Free plan really free?

Yes. The Starter plan includes all modules for up to 5 employees with no time limit and no credit card required. Unlike Xero, which has no free tier, Obzimo lets you run your entire business at zero cost if you have 5 or fewer employees. Coming soon.

Will my accountant accept Obzimo instead of Xero?

Obzimo exports standard CSV and PDF financial reports that any accountant can work with. If your accountant specifically requires Xero's practice management tools, that's a valid reason to stay. However, most UK accountants are happy to work with standard financial reports rather than requiring a specific platform.

How does Obzimo handle data security compared to Xero?

Both platforms are GDPR-compliant and use encryption in transit. Obzimo additionally encrypts all personally identifiable information (PII) at rest using AES-256-GCM encryption and supports automated PII redaction for right-to-erasure requests: going beyond standard soft deletion to full data scrubbing.

Does Obzimo include bank feeds for free?

Yes. Bank feeds (live connections to your bank account that pull in transactions automatically) are included on every Obzimo plan, including the free tier. On Xero, you need at least the £15/month Starter plan to access bank feeds. That's a saving of £180/year before you've used any other feature.

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