Xero vs QuickBooks Online: Features Comparison, Pros, Cons
Integrates with more than 750 apps and offers live, in-house bookkeeping add-on. Our partners cannot pay us to guarantee favorable reviews of their products or services. QuickBooks Online and Xero are both powerful accounting tools with long lists of pros and cons. The best solution for you depends mainly on your business and preferences. A core element of handling your financials is an accounting solution to track costs and revenue on top of managing your invoicing. Now, let’s talk a bit about the differences between these two accounting software giants.
QuickBooks and Xero are two of the best accounting software options with a range of pricing plans to fit multiple budgets. We researched both tools extensively to help you choose the right accounting software for your business. In this article, https://www.quick-bookkeeping.net/ we compare their core features, pricing and pros and cons to help you decide which one is the right accounting software for your company. The solution’s comprehensive and user-friendly invoicing and reporting features impressed us.
Both have great A/P features, but QuickBooks Online is slightly better due to its ability to generate recurring payments. Xero lets you create a recurring bill but not the payment, which means it doesn’t charge your checking account automatically. Another notable difference is that QuickBooks Online lets you upload your file of transactions, so you aren’t required to connect your bank account. With Xero, you have to connect your account to reconcile your transactions.
We also weighed factors such as pricing, user experience, customer service and integrations. QuickBooks Online and Xero are well-known cloud-based business accounting software solutions that are a favorite of growing companies due to their affordable pricing and scalability. Accounting features such as invoicing, accounts payable and receivable, and inventory management help your business stay organized and profitable. QuickBooks was created in 1983 by Intuit, garnering nearly 40 years of development behind it. A New Zealand-based company launched Xero in 2006 to challenge the growing accounting software market. Intuit also offers QuickBooks Desktop versions for companies that require it, but in this guide, we will compare the Online version.
You want advanced reporting
The platform offers high-quality built-in integrations with many leading business software vendors. For example, QuickBooks integrates with Square, Gusto, PayPal, eBay, Shopify and Etsy. Yes, QuickBooks’ accounting tools do come in a little higher in overall pricing, but the plan options are more flexible and offer more features than Xero’s plans.
- If you’ve been struggling to pay your vendors in full or on time, Xero is more likely to eliminate this challenge than any other platform.
- QuickBooks offers more invoicing tools and client payment options than Xero.
- Additionally, if more software apps and integrations are critical to the scalability of your business, then Xero is a winner in this category as well.
- For an additional $50, add a Bookkeeping setup with a Live Bookkeeper.
Track mileage, send invoices and get a snapshot of your business cash flow with both Xero and QuickBooks. While Xero’s lowest-tiered plan allows you to send and approve up to 20 invoices, partner apps that initiate transactions can automatically contribute to your limit. Both accounting software products let users invite their accountants by email. If you’re located in the United States, though, there’s a better chance your accountant is familiar with QuickBooks Online than Xero.
You’ll still be in a good position for reporting if you go with Xero, but QuickBooks is the superior choice if reporting is your priority. We like that QuickBooks offers extensive features in each pricing package. We also like that QuickBooks is transparent about features and pricing online. Unlike some other vendors, QuickBooks leaves no questions about what you get for your dollar. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Summary – Xero vs. QuickBooks Online
Additionally, some users complained that QuickBooks Online is a bit expensive. While it is moderately priced, it can be cost-effective considering the value it can provide to your business. We are driven by the Fit Small Business mission to provide you with the best answers to your small business questions—allowing you to choose the right accounting solution for your needs. Our meticulous evaluation process makes us a trustworthy source for accounting software insights.
No matter which QuickBooks pricing tier you opt into, the QuickBooks team will always guide you through setup. You can enter as much or as little information as you need, and simply add the rest when it’s necessary. Xero’s accounting functionalities are fairly https://www.online-accounting.net/ simple to navigate, so it’s likely these resources will be sufficient if and when something goes wrong. We consider this a draw, and the ratings presented above are simply reflections of the average scores of Xero and QuickBooks Online on review sites.
Best Accounting Software for Small Businesses
Despite not offering unlimited invoices and bills in its base plan, Xero accounting software is a more scalable solution than QuickBooks in the number of users it supports. Xero supports unlimited users with all their subscription plans–in contrast, QuickBooks allows only up to 40 users with its highest-tiered plan. Additionally, if more software apps and integrations are critical to the scalability of your business, then Xero is a winner in this category as well.
Xero and QuickBooks represent two different types of businesses within this industry. Both QuickBooks Online and Xero use artificial intelligence (AI) and machine learning to automate workflows to some extent. Businesses can integrate a scalable SaaS third-party AP automation solution to access more advanced automation and global payments capabilities. Xero best suits medium to large businesses but works for all businesses. In addition, Xero has a far more user-friendly interface than QuickBooks, so its ease of use makes it the perfect choice for the self-employed and those with less accounting experience.
Quickbooks Online vs Xero
Whether Xero or QuickBooks Online is right for you depends on the specific features you need and how much you can afford to pay. Xero is more affordable than QuickBooks Online, allows you to add an unlimited number of users without additional costs, and offers https://www.kelleysbookkeeping.com/ inventory management and fixed asset accounting in all its plans. QuickBooks, on the other hand, has generally more developed features, such as bank reconciliation without bank feeds, makes it easy to find bookkeeping support, and has live customer support.
Has robust reporting tools and report customization options, basic inventory tracking in all plans and a capable mobile app; Early plan limits the number of invoices and bills. Xero lets businesses manage inventory tracking and fixed assets on all plans. With QBO, inventory is only available on the higher-tier plans, and users must manually create fixed assets. Xero vastly outperforms QuickBooks in its fixed asset management tools. With QuickBooks, you can record the purchase of a fixed asset, but with Xero, you can track fixed assets, calculate and track their depreciation, and much more. Xero also has a more robust tool for tracking project profitability, giving you access to real-time reports.
Best Free Accounting Software for Small Businesses
The software must also have a mobile app to enable users to perform accounting tasks even when away from their laptops or desktops. The software must have features that allow users to set sales tax rates, apply them to invoices, and enable users to pay sales tax liability. Businesses with inventory items should choose accounting software that can track inventory costs, manage cost of goods sold (COGS), and monitor inventory units.
QuickBooks Online’s most popular Plus plan tops out at five users; its highest-tier Advanced plan allows up to 25 users, but that plan is expensive at $200 per month. In contrast, all Xero plans offer unlimited users and its highest-tier Established plan is a more affordable $70 per month. Our Xero accounting vs QuickBooks Online comparison will help you evaluate both invoicing and business accounting software solutions. As part of your accounting software evaluation, decide whether Xero or QuickBooks for small business is a better match for your business needs. Quickbooks is a more scalable solution than Xero when it comes to bills and monthly invoices, which are both unlimited in all plans.