When searching for efficient cloud-based accounting tools, you will come across the following two: QuickBooks Online and Xero. Such solutions are perfect for small business owners and always take place among the “best invoicing tools” lists over the web.
Xero and QuickBooks are helpful accounting solutions, no doubts. So how can your organization decide which to go for? In this blog post, we have analyzed Xero vs QuickBooks Online so you could consider different factors like features, pricing, benefits, and drawbacks. And then come up with a well-thought choice of your next accounting software.
Xero vs QuickBooks Online: What Do These Tools Offer?
QuickBooks Online and Xero provide features helpful for small-sized businesses. These platforms deliver to their customers: electronic banking, invoicing, payment acceptance, and bill management functions.
What Services Does Xero Offer?
Xero divides its critical features into five major categories:
- Dashboard
Xero dashboard offers an appropriate summary of your business activities. That covers bank balances, invoices owed, along with total cash coming in and out of your organization. Plus, the dashboard is customizable.
- Business
This category enhances retrieving invoices, relevant bills to pay, purchase orders, or necessary products and services. For example, the invoices option demonstrates a summary view of all your available invoices and their current status.
Apart from that, the invoice entry screen on Xero provides easy look-up options for most fields. After completing the invoice, you can send it via email. At the same time, such emails can also include online bill payment options. Thus, after receiving payments, Xero automatically applies for the payment when paid online. Or you can process a required payment using the traditional bank reconciliation process.
- Accounting
This category helps to deal with all available banking transactions and manage your chart of accounts and financial statements. You may have the question: how much data can Xero handle? Xero deals with volumes of up to 1000 sales invoices and the same number of purchases bills.
- Projects
This option allows managing different projects and recording time spent. For that, you should apply the specific time tracking feature.
- Contacts
This category helps to manage all contacts in a single location. In the contacts, you can find clients, suppliers, or contractors. Also, Xero offers reporting that involves financial statements and other management reports.
In addition to the mentioned features, there is a need to indicate the following ones:
- Mobile app. Xero offers a mobile application for Android and iOS devices. With this app, you can handle typical tasks like managing receipts and contacts or creating invoices.
- Support. Among Xero’s client support is provided via email support, guides and help articles for users, in-product support, user community, and product training.
- Integrations. You can integrate your Xero with over 700 applications in various categories. These cover payment acceptance apps, including Stripe, PayPal, or GoCardless. But they can also involve CRM software, inventory management systems, e-commerce platforms, payrolls, or time tracking apps.
What Are the Main Features of QuickBooks Online?
QuickBooks provides basic accounting features like electronic banking, invoicing capabilities, billing options, and payment acceptance. However, QuickBooks divides the relevant functionality into more specific groups instead of gathering them into one big category.
Of course, user preference is crucial to consider when applying the style. QuickBooks Online has a central navigation screen that is quite clear and self-explained. New users have a short learning curve and navigate through QuickBooks easily.
Invoicing. Your accountants will find it simple to enter invoices in QuickBooks. Besides, this software provides the opportunity to add credit cards or your bank account numbers to the client’s accounts. Such a feature is essential since it streamlines online payments processing.
Customer payments. With QuickBooks Online, you get the option to apply for customer payments automatically after their deposition.
Expense. This category allows adding vendor invoices and getting them ready for further payment. With QuickBooks in place, you can also manage clients, vendors, and your accountants in one system. Meanwhile, you can use a payroll option that is available via Intuit.
Reporting. QuickBooks Online includes the Report Center that provides a central location for processing all reports. They cover all basic financial statements and the selection of available management reports.
Support. In terms of support options, QuickBooks provides in-product support, user community, knowledge base, product training, and you can connect with a support rep via email, live chat, or request a callback.
Fortunately, you will rarely ask yourself how to work with QuickBooks Online as this accounting tool provides clear guidance throughout the app.
Integrations. QuickBooks supports integration with numerous applications. That makes it a perfect option for SMBs and SMEs owners. Among the most popular integrations like PayPal, TSheets, Bill Pay, Stripe, inventory management, payroll, or CRM systems.
Is Xero Cheaper Than QuickBooks Online?
Of course, your company needs a tool that tracks income, expenses, invoices, and possibly time. Therefore, you will likely pay
- $70 per month for QuickBooks Online or
- $60 per month for Xero
In the case of purchasing the top plans, you will get nearly similar functions from both vendors.
How Much Does Xero Cost?
Xero accounting software offers 3 pricing tiers that range from $9 to $60 per month.
The most basic plan called Early costs only $9 per month. But you gain an incredibly limited feature suite. For example, you can send only five invoices and quotes and enter the same number of bills. Also, you can reconcile only twenty transactions. For the majority of companies, these numbers are not enough.
Xero pricing in terms of its mid-price plan called Growing may be suitable for most small businesses. Paying $30 per month, the tool allows sending invoices and quotes, entering bills, and reconciling bank transactions.
Finally, how much does the top plan offered by Xero cost? For the Established plan that provides a full feature suite, you must pay $60 per month. Here, you get all of the Growing features, along with multi-currency functionality, expenses, and projects.
In addition, your organization may access a full-service Xero payroll called Gusto that is available for US clients. Its pricing starts at $39/mo base + $6/mo per person. If your company is not based in North America, it may use country-specific payroll that serves as a relevant add-on.
How Much Does QuickBooks Online Cost?
Comparing Xero vs QuickBooks, your company may start with QuickBooks Online from $25 per month. This price represents the lowest plan among the 3 available.
Thus, the basic plan, called Essentials, offered by QuickBooks Online costs $25 per month. It provides much more functions compared to Xero’s cheapest plan. Such functionality includes tracking income and expenses, capturing and organizing receipts, invoices, and accepting payments. Besides, you get access to basic reporting. This plan doesn’t support tracking time and inventory. The last but not least, the Essentials plan provides access just for one user.
To increase the number of users, many organizations choose the Plus plan that costs $70 per month. It offers all of the mentioned features and provides access for five users. Also, it brings the opportunity to track time and inventory and use better reporting tools.
Of course, the most significant features are covered by the top plan called Advanced that costs $150 per month. This plan provides access to multiple features, including batching invoices and expenses or automating approval and reminders. Also, it offers better management reports and fields, along with customized reporting fields.
In terms of payroll, there are three following choices of add-on: Core, Premium, and Elite. They range from $45 + $4 per user a month to $125 + $10 per user a month.
Ultimately, all plans involve receipt capture, professional support, and different out-of-the-box integrations.
Which Is Better: Xero vs QuickBooks?
Although you may regard QuickBooks Online and Xero as quite similar accounting platforms, there are some distinct differences. Usability, number of users, mobile applications, or security are among the key functionalities your organizations should consider.
Benefits and Drawbacks of Xero
Xero serves as an efficient cloud-based accounting tool. You can run cash-basis, along with accrual accounting, as well as apply double-entry accounting. Xero offers hundreds of integrations and mobile versions for Android and iPhone devices. Does Xero integrate with QuickBooks Online? Yes, it does.
Xero supports an unlimited number of users so it can be scaled easily along with your organization's growth. It sounds like a perfect choice for SMBs. At the same time, you should consider Xero's learning curve and other disadvantages that might be not worth your time and expenses. Let's check up main benefits and drawbacks of Xero.
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Advantages & Shortcomings of QuickBooks Online
QuickBooks Online delivers tools and capabilities similar to any accounting or billing software offers. Like Xero, this cloud accounting platform supports double-entry accounting, a cash basis, accrual accounting.
QuickBooks Online offers a strong featured suite, mobile apps, and many integrations with third-party apps. Besides, it is easy to use, which makes it attractive for beginners. This billing software is a perfect option for SMBs and SMEs as well.
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Where to Migrate Your Accounting Data: Xero or QuickBooks Online?
When comparing QuickBooks vs Xero, remember that both are outstanding accounting systems for small business owners. The existing customer reviews represent how well both vendors meet customers' needs.
When to use QuickBooks?
Quickbooks Online should be your perfect option in the following cases:
- You need a lot of value and pay low costs. You have to consider the QuickBooks Essentials plan as a significant deal for $25 per month. It allows sending as many invoices or bills as you require and tracking income and expenses. In other words: everything is necessary for running your business. QuickBooks Online is the best choice for freelancers or small business owners who need all critical features at an affordable price.
- You need advanced reporting. QuickBooks Online offers efficient reporting, especially in its Plus plan for $70 per month. This plan provides advanced reports and custom dashboards that include budgeting, forecasting, or profitability analysis.
- You are based in the USA. QuickBooks is recognized as a market leader in the US. Therefore, your accountants will likely work with this accounting tool. At the same time, QuickBooks provides longer compliance with GAAP and IAS compared to Xero.
When to use Xero?
Here are some cases when Xero will steal the light from QuickBooks Online:
- Your business is a growing startup. Xero offers scalability that covers functionality and user experience. With Xero in place, you can be sure that it supports your organization’s growth and evolves accordingly. This tool provides basic functions to process invoices and payments and advanced ones for projects or time tracking. Besides, Xero involves core inventory management functions that allow tracking stocks and adding inventory to quotes or invoices.
- You prefer a minimalist UI. That is among the main reasons startups mostly choose Xero compared to QuickBooks: the first one looks better. Xero offers a more up-to-date and user-friendly experience. Therefore, numerous users consider Xero more enjoyable to work with and prefer its sleek interface.
- You are not based in North America. Xero is popular and widely used by accountants who work outside the US. This particular tool is especially loved in European countries and New Zealand. For instance, accountants prefer Xero due to automatic bank feeds, outstanding usability, and simply payroll. Finally, Xero allows fixing user errors easily, along with built-in appropriate audit trails and efficient safety checks.
What Accounting Tool Should You Go for?
Comparing Xero vs QuickBooks, the second one offers numerous benefits. That list includes advanced accounting features, customized invoices, and multiple integrations. Besides, QuickBooks Online provides built-in lending, which gains extra points for this app among bookkeepers and accountants.
Talking about Xero, it is quite a good QuickBooks alternative. This billing software also offers outstanding features and hundreds of integrations that matter for any business. Apart from that, Xero supports an unlimited number of users.
If you have already made your choice, our Accounting System Migration service will migrate your data US versions of to Xero or QuickBooks Online US version automatedly.
Either QuickBooks or Xero are helpful tools for managing your finances so in the choice focus on your business needs not the trends or feature lists.
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