Anyone who has heard of Odoo ERP (15 million-plus Users globally) will know it includes quite powerful Accounting functionality, designed to manage everything from invoicing and bank reconciliation to multi-company consolidation and detailed reporting. You would also know that more popular – as a stand-alone solution – Xero is arguably the world’s most widely used Cloud-based Accounting targeted at the SME space. Many businesses who use Odoo ERP hang-on to their instance of Xero for their Accounting needs — particularly after adopting Odoo for their operational, customer, stock and project requirements.
As an accredited and expert Odoo Partner across Australia, New Zealand, Indonesia, Japan and Noumea, M+ Software has helped dozens of organisations connect both Odoo and Xero in an effective, pragmatic way. Over time, we’ve learned that the right approach isn’t about connecting everything — it’s about connecting what really matters.
In this article we explore why such businesses choose to retain Xero, and why others fully migrate to Odoo Accounting, particularly what M+ Software has learned from years of implementing Odoo integrations across Australia and the Pacific.
Why Businesses Choose to Retain Xero Accounting
There are plenty of reasons a business may prefer to stay with Xero for its financials while using Odoo for everything else.
- Familiarity
Most Bookkeepers and Accountants know Xero inside-out, often easier to maintain using what a Finance team already trusts - Consistency
Many organisations belong to a wider group where all companies use Xero. Keeping it ensures standardised reporting and shared processes - Connectivity
Xero’s built-in Bank Feeds and automated reconciliation features are simple, robust, and well-suited to Australian Banks - Compliance
With ATO integration and local compliance tools, regulatory compliance offers peace of mind for Finance teams - Segregation
Operations can run in Odoo while external Accountants or Bookkeepers manage Xero independently
For these reasons, the aim of an Odoo < > Xero integration is rarely to replace one with the other — it’s to make them work together more smoothly.
Why Businesses Choose to Migrate Off Xero Accounting to Odoo
On the other hand, some organisations ultimately choose to consolidate everything in Odoo Accounting. Here’s why that move can be worth the effort:
- Unification
Operations, Sales, Purchasing and Accounting should all live in one system. No double-handling, no API delays - Real-Time
Managers can have visibility of profit per product, project or location instantly — not after data synchronisation at a later date, E.g. the following day - Automation
Every sale, invoice and payment flows naturally through the system, eliminating imports and manual reconciliations for greater efficiency - Customisation
Odoo Accounting can be tailored to any business model or industry, including specific tax rules - Scalability
Odoo is capable of handling multi-company and multi-currency environments natively - Cost-Saving
One system equates to fewer licences, fewer integrations and less maintenance, which means greater cost savings for your business - Traceability
Every transaction stays within a single data source, offering a complete financial history and audit trail
In practice, M+ Software regularly see businesses transform onto Odoo ERP maintaining Xero Accounting for familiarity, then gradually adopt Odoo Accounting as their internal capabilities grow, and realise the benefit of the points above.
M+ Software Odoo Integration Philosophy – Less Is More
When we first began integrating Odoo ERP with Xero Accounting, there is the temptation to connect everything — bank statements, journals, sales orders, purchase orders, even products.
In theory it all seems logical – in practice it is unnecessarily complex.
Across our journey of being an Odoo partner since 2008, M+ Software has consequently refined our approach. Today, we focus on syncing only what adds true business value to our customers, typically:
- Customer Invoices
- Vendor Bills
- Optional Cost-Of-Goods Entries (when required for margin tracking)
Synchronising products, for example, often creates issues — Xero interprets invoices and bills as stock movements, triggering unwanted quantity checks and re-validations. By syncing only descriptive lines, we simplify the process, reduce errors and improve operational speed and efficiency.
What M+ Software Has Learned
Our early integrations taught us a few valuable lessons:
- Keep It Simple
Narrow integration scope leads to faster deployment and far fewer support issues - Handle Errors Gracefully
Any API connection should keep syncing unaffected records even if one fails - Respect Xero’s Protected Accounts
Specific accounts, such as retained earnings, reject journal entries and must be bypassed - Expect Different Mindsets
Odoo allows more flexibility in journal posting than Xero; harmonising them requires clear mapping rules
Each project became faster and smoother once we adopted this streamlined method.
Common Integration Scenarios
There is no single “correct” way to integrate Odoo with Xero, however two patterns are common:
- One-Way Integration (Odoo > Xero)
This is the most typical set-up. Odoo handles operations, invoicing, purchasing and inventory, while Xero remains the accounting engine for financial reporting, payroll and reconciliation - Bi-Directional Integration (Payments from Xero > Odoo)
Useful when Odoo needs payment status to trigger product delivery or service activation.
However, in many cases, finance and operations teams are separate — so syncing payments back often adds little value.
Challenges and “Gotchas”
Here are a few recurring lessons worth noting:
- Many marketplace connectors are over-engineered, offering far more features than businesses actually need
- Some Xero accounts are protected and cannot receive journal entries — this must be handled during integration set-up
- Product and stock synchronisation can create reconciliation loops if not managed carefully
- Define ownership early – decide which system is the source of truth for customers, suppliers and financial data
Integration vs Migration – Choosing the Right Path
Every business eventually reaches a crossroads:
Should we keep Xero and integrate, or migrate fully to Odoo Accounting?
There’s no silver-bullet answer — it depends on your size, structure, and appetite for change.
At M+ Software, we typically recommend a staged approach:
Start with Integration
Keep your existing finance process but eliminate double entry
Expand Odoo’s Accounting Usage
Begin using Odoo for bank reconciliation, expense management and reporting
Transition Fully to Odoo When Ready
Once your team is confident, deactivate Xero without disruption
The goal is not to force change, but to support growth at your own pace.
Looking Forward
With the introduction of the Peppol e-Invoicing network and on-going improvements in both Odoo and Xero APIs, integrations will continue to evolve.
At M+ Software, we’re developing a lightweight Odoo–Xero connector focused on reliability, clarity, and simplicity — ideal for businesses that want automation without over-engineering.
Summary
Whether you decide to integrate Odoo and Xero or migrate fully to Odoo Accounting, the key is clarity: know what you’re trying to achieve and why.
Integration should reduce complexity, not add to it.
Change should empower your team, not overwhelm them.
As an official Odoo Partner, M+ Software specialises in ERP implementations, accounting migrations, and Odoo integrations tailored for Australian businesses.
If you’d like to discuss your set-up or explore how Odoo and Xero can work better together,
get in touch with our team — we’d be glad to help.
