The short answer
Xero bookkeeping services are where a bookkeeper runs your Xero account for you: reconciling the bank feed, coding income and expenses, entering bills, chasing invoices, running payroll and preparing VAT and Making Tax Digital submissions. In the UK most small businesses pay between £150 and £400 a month for this, on top of their Xero subscription of £7 to £70 a month. It is worth it when your time is worth more than the fee, or when mistakes in Xero are already costing you money.
That is the quick version. The rest of this guide explains what you get for the money, how to tell a good Xero bookkeeper from someone who just has a login, and when you are better off doing it yourself.
What is Xero bookkeeping?
Xero bookkeeping means keeping your business records in Xero, the cloud accounting software used by millions of small businesses. Xero is the tool. Bookkeeping is the job of putting accurate, complete information into it every week so your reports, tax returns and cash position are right.
This distinction matters because a lot of people buy Xero expecting it to do the bookkeeping. It does part of it. Bank feeds pull transactions in automatically, and Xero now suggests matches and can auto-reconcile on the Grow plan and above. But software cannot tell whether that £480 payment to a builder’s merchant was stock, a repair, or something you bought for home. A person still has to make those calls, and that is where most errors creep in.
If you are still getting to grips with the software itself, our guide to what Xero software is and what it does covers the basics.
What does a Xero bookkeeper do each month?
A good Xero bookkeeping service is not a once-a-quarter tidy up. It is a rhythm. Here is what a typical month looks like for a small VAT-registered business we look after:
- Weekly bank reconciliation. Matching every line on the bank feed to an invoice, bill or receipt, and coding the rest correctly. This is the heart of the job. We explain the process in our step-by-step guide to reconciling in Xero.
- Receipts and bills. Pulling supplier bills and receipts in through Hubdoc or Dext, checking VAT is captured correctly, and attaching the evidence to each transaction.
- Sales invoices and credit control. Raising invoices if you want us to, and chasing the ones that go overdue so your cash flow does not quietly dry up.
- Bank rules and cash coding. Setting up rules for regular payments and using bulk reconciliation for high-volume lines, so the books stay quick to maintain. Our bulk reconcile guide shows how this works.
- Payroll. Running payroll in Xero, submitting RTI to HMRC and handling pension auto-enrolment.
- VAT returns. Checking the VAT report line by line, then submitting through Xero under Making Tax Digital.
- MTD for Income Tax updates. For sole traders and landlords now in scope, keeping digital records and sending quarterly updates to HMRC.
- Month-end reports. A profit and loss, balance sheet and aged debtors report you can actually read, plus a short note on anything that looks off.
At year end, the bookkeeper hands clean, reconciled Xero data to your accountant. That usually cuts the accountant’s time, and their bill, because they are not untangling a year of guesswork.
How much do Xero bookkeeping services cost in the UK?
You pay for two separate things: the Xero subscription and the bookkeeper’s time. People often confuse the two, so here they are side by side.
1. The Xero subscription
Xero raised its UK prices on 1 September 2026. The current monthly prices, excluding VAT, are:
| Xero plan | Price per month (excl VAT) | Who it usually suits |
|---|---|---|
| Simple | £7 | Non-VAT registered sole traders and landlords with light invoicing |
| Ignite | £18 | Sole traders and small VAT-registered businesses (20 invoices, 10 bills) |
| Grow | £39 | Most growing small businesses (unlimited invoices and bills, auto-reconcile, payroll for 1) |
| Comprehensive | £55 | Businesses with a team (payroll for 5, multi-currency) |
| Ultimate | £70 | Larger teams needing projects, KPIs and payroll for 10 |
Source: Xero UK pricing plans, checked 28 September 2026. For a full breakdown of which plan fits which business, see our Xero pricing UK 2026 guide.
2. The bookkeeper’s fee
Bookkeepers charge either by the hour or a fixed monthly fee. In the UK, hourly rates typically fall between £25 and £50, and the median monthly fee is around £150. What pushes your fee up or down is volume and complexity, not the size of your turnover.
| Type of business | Typical monthly work | Typical monthly fee |
|---|---|---|
| Sole trader, not VAT registered | Reconciliation, receipts, MTD quarterly updates | £75 to £150 |
| Small limited company, VAT registered | Above plus bills, VAT returns, director payroll | £150 to £300 |
| Growing business with staff | Above plus full payroll, pensions, credit control, management reports | £300 to £600+ |
These ranges are illustrative, based on typical UK market rates. Your quote depends on your transaction volume and how tidy your Xero file is today.
Wondering whether you need a bookkeeper, an accountant or both? Our guide to bookkeeper vs accountant for small businesses explains who does what, and what each typically costs.
DIY Xero vs a Xero bookkeeper: which is right for you?
Plenty of business owners run Xero perfectly well on their own. Plenty of others think they do until their accountant sends back a list of questions in January. Here is an honest comparison.
| Doing Xero yourself | Using a Xero bookkeeping service | |
|---|---|---|
| Monthly cost | Xero subscription only (£7 to £70) | Subscription plus bookkeeping fee (typically £150 to £400) |
| Your time | 2 to 8 hours a month, often evenings | 15 to 30 minutes answering queries |
| VAT coding accuracy | Depends on your knowledge | Checked by someone who does it daily |
| MTD and VAT deadlines | Your responsibility to remember | Tracked and submitted for you |
| Year-end accountant bill | Often higher if records need fixing | Usually lower with clean data |
| Best for | Low volume, confident with numbers, enjoys admin | Busy owners, VAT-registered firms, anyone with staff |
A useful rule of thumb: work out what an hour of your time is worth in your business. If you spend six hours a month in Xero and your time is worth £50 an hour, you are already “spending” £300 a month on bookkeeping. You are just paying for it in evenings rather than invoices.
Signs your Xero needs a bookkeeper
These are the things we see most often when a business first contacts us:
- Hundreds of unreconciled transactions sitting in the bank feed.
- A bank balance in Xero that does not match your actual bank statement.
- Everything coded to “General Expenses” or “Sales” with no detail.
- VAT returns submitted without checking the VAT report first.
- Duplicate transactions from a bank feed that was reconnected.
- Invoices marked unpaid that were actually paid months ago, so your debtors list is fiction.
- You avoid logging in because you know it is a mess.
If three or more of those sound familiar, a one-off Xero clean-up followed by monthly bookkeeping usually pays for itself quickly. If you only need occasional help, our guide to covers your free options first.
How do I choose a good Xero bookkeeper?
Anyone can be invited to your Xero file. That does not make them qualified to run it. Before you hand over access, check these five things:
- Are they Xero certified? Xero runs a free advisor certification and requires advisors to keep it current. Firms listed in the Xero advisor directory have trained staff and a minimum number of clients on Xero, so the directory is a sensible first check.
- Are they supervised for anti-money laundering? UK bookkeepers must be registered for money laundering supervision with HMRC or a recognised professional body before they take on clients. Ask who supervises them. You can read the rules on GOV.UK.
- Do they have professional indemnity insurance? If a mistake costs you money, you want to know it is covered.
- Do they understand your sector? A bookkeeper who knows CIS, the VAT reverse charge or hospitality tips will save you trouble a generalist might miss.
- Can you actually talk to them? Xero’s own support is online only, with no inbound phone line. The value of a local bookkeeper is that you can pick up the phone.
Why use a local Xero bookkeeper in Kent?
Xero is cloud software, so in theory your bookkeeper could be anywhere. In practice, many Kent business owners still want someone they can meet, who knows the local area and understands how a Medway builder or a Canterbury café actually trades.
At Acey Bookkeeping we are a mother and daughter team based in Rochester with more than 40 years of combined experience, and we are certified Xero advisors. We work with sole traders, limited companies and growing teams across Medway and Kent, including Gillingham, Chatham, Maidstone, Gravesend and Sittingbourne, as well as clients further afield who simply want a bookkeeper who answers the phone.
Our bookkeeping services in Medway and Kent cover everything in the monthly checklist above: Xero setup or migration, weekly reconciliation, VAT returns, payroll, credit control and MTD submissions. You get clean numbers and one fixed monthly fee.
Ready to hand over your Xero? Book a free, no-obligation chat with Acey Bookkeeping. We will look at your Xero file, tell you honestly whether you need us, and give you a clear fixed quote.
Frequently asked questions
What are Xero bookkeeping services?
Xero bookkeeping services are when a bookkeeper manages your Xero account for you. That usually includes bank reconciliation, coding transactions, entering bills and receipts, raising and chasing invoices, payroll, VAT returns and Making Tax Digital submissions, plus monthly reports.
How much does a Xero bookkeeper cost per month?
Most UK small businesses pay between £150 and £400 a month for Xero bookkeeping, depending on transaction volume, VAT and payroll. Sole traders with simple records often pay less. Hourly rates typically sit between £25 and £50. This is on top of the Xero subscription.
Is Xero bookkeeping included in the Xero subscription?
No. The Xero subscription, from £7 to £70 a month excluding VAT, pays for the software only. Xero automates some tasks, such as bank feeds, but someone still has to check, code and reconcile the transactions. That work is what a bookkeeper charges for.
Can I do my own bookkeeping in Xero?
Yes. Many sole traders and small businesses do. It works best if your transaction volume is low, you are comfortable with VAT, and you reconcile at least weekly. Once you have staff, heavy invoicing or regular VAT returns, a bookkeeper usually saves more than they cost.
What is a certified Xero advisor?
A certified Xero advisor is a bookkeeper or accountant who has passed Xero’s official advisor certification and keeps it up to date. They are independent of Xero, not Xero employees. Certified firms can be listed in Xero’s advisor directory.
Do I still need an accountant if I have a Xero bookkeeper?
Usually, yes, for year-end accounts, corporation tax and tax planning. A bookkeeper keeps the records accurate through the year. An accountant uses those records to prepare statutory accounts and tax returns. Clean Xero books often reduce your accountant’s fee.
Can a Xero bookkeeper submit my VAT and MTD returns?
Yes. With your authorisation, a bookkeeper can submit VAT returns through Xero under Making Tax Digital and send MTD for Income Tax quarterly updates for sole traders and landlords. You remain legally responsible for the figures, so a good bookkeeper will share the return with you before filing.
