If you’re looking for a Xero alternative, you’re not alone. While Xero is a popular choice for small businesses, many companies find themselves outgrowing its capabilities as they scale. Whether you’re facing limitations in inventory management, reporting, multi-entity accounting, or integrations, it might be time to explore a more robust solution.
Microsoft Dynamics 365 Business Central is a powerful, scalable alternative to Xero, offering comprehensive financial management, automation, and seamless integration with Microsoft 365 and other business applications.
In this guide, we’ll explore why businesses are switching from Xero to Business Central and how this change can help streamline operations and fuel growth.
Why Businesses Outgrow Xero
Xero is well-suited for startups and small businesses, but as companies expand, they often encounter scalability challenges. Here are some common reasons businesses seek an alternative to Xero:
Limited Scalability for Growing Businesses
Xero is primarily designed for small businesses, meaning it struggles to handle complex accounting needs, such as:
Multi-entity consolidation – Xero does not natively support multi-entity consolidation within its standard offerings, it charges more for multi-company support.
Advanced inventory management – Xero's built-in inventory management features are designed for basic tracking needs. For advanced inventory management capabilities—such as multi-warehouse management, batch and serial number tracking, and detailed reporting—integrating third-party applications is necessary.
Handling high transaction volumes – Performance can lag as data increases.
Business Central, on the other hand, is designed for businesses of all sizes, ensuring you won’t need another migration as you grow.
Basic Reporting and Analytics
While Xero offers essential financial reports, businesses needing deeper insights often find its capabilities lacking. Advanced reporting and forecasting require third-party tools, leading to additional costs and complexity.
With Business Central, you get:
✅ Built-in Power BI integration for advanced analytics.
✅ Customisable dashboards to track KPIs.
✅ Real-time financial insights without relying on third-party apps.
Limited Customisation and Automation
Xero provides automation for basic accounting tasks, but customisation is limited. Many businesses find themselves relying on manual processes or multiple add-ons, which increases costs.
Business Central allows you to:
🔹Automate workflows using Power Automate.
🔹Customise processes to fit your business needs.
🔹Integrate seamlessly with Microsoft 365 and Teams.
Integration Challenges
Xero supports integrations, but only with third-party tools obtained through its app marketplace.
Business Central, however, offers native integration with:
✅ Microsoft 365 (Excel, Outlook, Teams, etc.)
✅ Power BI for real-time analytics
✅ CRM and ERP modules for a unified platform
This means less reliance on third-party apps, reducing costs and complexity.
Why Business Central Is the Best Xero Alternative
If you’re looking for a Xero alternative that grows with your business, Business Central is the clear winner. Here’s why:
Comprehensive Financial Management
Unlike Xero, which primarily focuses on accounting, Business Central provides a full ERP solution, covering:
✅ General ledger, accounts payable/receivable
✅ Budgeting and forecasting
✅ Bank reconciliation and cash flow management
✅ Multi-currency and multi-entity consolidation
Advanced Inventory & Supply Chain Management
While Xero relies on add-ons for inventory tracking, Business Central includes robust inventory management tools such as:
✅ End-to-end supply chain visibility
✅ Warehouse and production management
✅ Automated demand forecasting
This makes it a perfect choice for retailers, manufacturers, and distributors.
Scalability & Cloud Flexibility
Business Central is designed to grow with your business, whether you're a small company today or planning for expansion.
Cloud-based and accessible anywhere
Enterprise-grade security from Microsoft
No need to migrate to another system as you scale
Cost-Effective in the Long Run
While Xero may seem affordable upfront, costs add up with third-party integrations. Business Central offers a more cost-effective, all-in-one solution, reducing your dependency on multiple tools.
Is It Time to Switch from Xero to Business Central?
If you’re experiencing scalability limitations, reporting challenges, or integration headaches with Xero, now is the perfect time to explore Business Central.
✅ Want a solution that grows with your business?
✅ Need better reporting and real-time financial insights?
✅ Looking for seamless integration with Microsoft tools?
Microsoft Dynamics 365 Business Central is the best Xero alternative, offering the flexibility, automation, and scalability that modern businesses need.
Final Thoughts
Choosing the right accounting software is critical for business growth. While Xero is great for startups, businesses that require advanced financial management, automation, and scalability will benefit from switching to Business Central.
Ready to make the move? Get in touch with a Dynamics Fanatics expert today!