Are you stressed about keeping track of your business money?
It can be tough!
Choosing the right software can feel like a big decision.
Two popular choices are Xero and QuickBooks.
This article will break down the key differences in a simple way.
We’ll examine each offering and help you determine which one is best, Xero vs QuickBooks.
Overview
We’ve put both Xero and QuickBooks through their paces.
Exploring their features and ease of use.
Our hands-on testing focused on real-world small business scenarios to bring you a clear.
Join 2 million+ businesses using Xero cloud-based accounting software. Explore its powerful invoicing features now!
Pricing: It has a free trial. paid plan starts at $29/month.
Key Features:
- Bank Reconciliation
- Invoicing
- Reporting
Used by over 7 million businesses, QuickBooks can save you an average of 42 hours per month on bookkeeping.
Pricing:Â It has a free trial. Plan starts at $1.90/month.
Key Features:
- Invoice Management
- Expense Tracking
- Reporting
What is Xero?
So, let’s chat about Xero.
It’s accounting software designed to make things simpler for small businesses.
Think of it as your financial hub online.
In one place, you can handle invoices, track bills, and see how your business is doing.
Also, explore our favorite Xero alternatives…
Our Take
Join 2 million+ businesses using Xero accounting software. Explore its powerful invoicing features now!
Key Benefits
- Automated bank reconciliation
- Online invoicing and payments
- Bill management
- Payroll integration
- Reporting and analytics
Pricing
- Starter: $29/month.
- Standard: $46/month.
- Premium: $69/month.
Pros
Cons
What is QuickBooks?
Okay, let’s talk about QuickBooks now.
It’s another popular accounting software, especially in the US.
Many small businesses like it because it’s been around for a while.
Also, explore our favorite QuickBooks alternatives…
Key Benefits
- Automated transaction categorization
- Invoice creation and tracking
- Expense management
- Payroll services
- Reporting and dashboards
Pricing
- Simple Start: $1.90/month.
- Essential: $2.80/month.
- Plus: $4/month.
- Advanced: $7.60/month.
Pros
Cons
Feature Comparison
This comparison will help you decide which accounting software is the best fit for your business.
We’ll look at the key accounting features to help you make an informed choice.
1. Financial Records & Reporting
- QuickBooks: QuickBooks helps businesses maintain financial records. It has customizable reporting and provides insights into a business’s financial position and business performance. Its reporting features are a key benefit for many users.
- Xero: Xero’s reporting features offer real-time data and provide a snapshot of a business’s financial health. It includes customizable reporting to help businesses manage financial details.
2. Invoicing & Accounts Receivable
- QuickBooks: QuickBooks helps you create online invoicing, send professional services invoices, and get paid with credit cards. It helps businesses manage accounts receivable and send payment reminders to customers.
- Xero: Xero lets you create invoices and track them. Xero makes it easy for small business owners to manage invoices owed, and it includes online payment functionality.
3. Accounts Payable
- QuickBooks: QuickBooks helps businesses manage accounts payable. You can pay bills, schedule payments, and track vendor data. It also helps businesses track money to stay organized.
- Xero: Xero offers strong payable functionality. You can capture bills and schedule payments to vendors. The system helps businesses manage their financial tasks.
4. Bank Transactions & Data
- QuickBooks: QuickBooks helps you connect your bank accounts and manage bank transactions. It can save time by automatically pulling in financial data.
- Xero: Xero has automatic bank feeds that pull in bank transactions. This feature helps small business owners keep their accounts up-to-date and maintain accurate financial records.
5. Inventory Management & Sales Tax
- QuickBooks: QuickBooks has strong inventory management features. It helps businesses manage inventory, track inventory data, and stay on top of sales. It also handles sales tax collection.
- Xero: Xero offers inventory management features. It helps businesses track inventory, but some advanced features may require an additional cost.
6. Payroll
- QuickBooks: QuickBooks offers its own integrated payroll. Intuit QuickBooks makes it easy to handle payroll for employees and independent contractors, including direct deposit and tax preparation.
- Xero: Xero integrates with payroll solutions to handle payments and taxes. This provides an excellent accounting solution, but it may come with an additional fee.
7. Accessibility
- QuickBooks: As a cloud-based accounting software, QuickBooks offers online access from anywhere. There is also a desktop version, but the cloud-based accounting software is more popular.
- Xero:Â Xero is a cloud-based accounting software and works on both iOS and Android devices, giving you constant access to your Xero account.
8. Enterprise Resource Planning (ERP)
- QuickBooks: QuickBooks offers some advanced features for larger businesses, but it is not a complete enterprise resource planning system.
- Xero:Â Xero is a solid Xero accounting software, but it is not a full Xero accounting software ERP system. It is best for small and growing businesses, not for large enterprises.
9. Customer Support & Resources
- QuickBooks: QuickBooks reviews often mention its extensive customer support, including phone support. They offer many online resources to help with business finances.
- Xero: Xero provides 24/7 online support through Xero Central. You can test Xero and its support, but they don’t offer phone support.
What to Look For When Choosing Accounting Software?
- Check if it supports QuickBooks Payroll or contractor payments for your team.
- Consider whether you need the QuickBooks desktop version or cloud access for your computer and clients.
- Look for strong financial reporting, including balance sheets and cash flow insights.
- Determine if you need full-service bookkeeping support or prefer self-employed tools.
- Review Xero accounting software review and QuickBooks products for key features and business data security.
- Evaluate the pricing, including Xero pricing, setup fees, and license terms, before you cancel.
- See if it can handle multiple currencies and manage multiple locations for expanding businesses.
- Check if the system includes purchase orders and project tracking.
- Look at the ease of data migration and the overall cash flow management tools.
- Ensure it provides a good chart of accounts for staying organized.
- If you are a medium-sized business for advanced features or an established plan.
- Consider if the software, like Xero, allows unlimited invoices and if you recommend Xero after testing.
- Compare the ease of manual data entry versus automated bank feeds.
- Evaluate if the early plan or established plan meets your current business growth needs.
- Look for a clean Xero dashboard for easy financial management.
Final Verdict
After comparing these two options, we lean toward recommending Xero for many modern businesses.
Why? Xero excels with its slick mobile app and easy-to-use interface, which helps you manage client data on the go.
While QuickBooks is strong, especially if you have complex desktop data or use QuickBooks Checking.
Xero’s clean design and cost are great for established businesses.
Xero’s pricing plans, even the ones limiting you to up to five bills initially, offer excellent value.
We feel Xero is currently the best accounting software for businesses prioritizing ease of use and modern cloud features.
If your accountant is already familiar with Xero, that’s another big win to use Xero.
More of Xero
Choosing the right accounting software means looking at a number of options.
Here’s a quick look at Xero vs other popular products.
- Xero vs QuickBooks: QuickBooks is a major competitor. While both offer similar core features, Xero is often praised for its clean interface and unlimited users. QuickBooks can be more complex, but it offers very powerful reporting.
- Xero vs FreshBooks: FreshBooks is a popular option, especially for freelancers and service-based businesses. It excels at invoicing and time tracking. Xero provides a more well-rounded accounting solution.
- Xero vs Sage: Both Sage and Xero offer solutions for small businesses. However, Sage also provides more comprehensive enterprise resource planning (ERP) tools for larger companies.
- Xero vs Zoho Books: Zoho Books is part of a large suite of business apps. It often has more advanced features for inventory and is very cost-effective. Xero, meanwhile, is a leading option for simplicity and ease of use.
- Xero vs Wave: Wave is known for its free plan. It’s a great option for very small businesses or freelancers on a tight budget. Xero offers a wider range of features and is better for business growth.
- Xero vs Quicken: Quicken is mainly for personal finance. While it has some business features, it’s not a true business accounting solution. Xero is built specifically to handle the complexities of business accounting.
- Xero vs Hubdoc: These are not direct competitors. Both Dext and Hubdoc are tools that automate document capture and data entry. They integrate directly with Xero to make bookkeeping faster and more accurate.
- Xero vs Synder: Synder is a platform that connects sales channels and payment gateways to accounting software. It helps automate data entry from platforms like Shopify and Stripe directly into Xero.
- Xero vs Expensify: Expensify focuses specifically on expense management. While Xero has expense features, Expensify offers more advanced tools for managing employee expenses and reimbursements.
- Xero vs Netsuite: Netsuite is a comprehensive ERP system for large corporations. It offers a full suite of business management tools. Xero is not an ERP but is an excellent accounting solution for small businesses.
- Xero vs Puzzle IO: Puzzle IO is a finance platform designed for startups, focusing on real-time financial statements and automated data entry.
- Xero vs Easy Month End: This software is a specialized tool for automating the month-end closing process, helping with reconciliation and audit trails. It is designed to work with Xero, not replace it.
- Xero vs Docyt: Docyt uses AI to automate back-office and bookkeeping tasks. It provides a way to view all your financial documents and data in one place.
- Xero vs RefreshMe: RefreshMe is a simpler accounting software with basic features, often used for personal finance or very small businesses.
- Xero vs AutoEntry: Similar to Dext and Hubdoc, AutoEntry is a tool that automates data extraction from receipts and invoices, designed to integrate with and enhance accounting software like Xero.
More of QuickBooks
- QuickBooks vs Puzzle IO: This software focuses on AI-powered financial planning for startups. Its counterpart is for personal finance.
- QuickBooks vs Dext: This is a business tool for capturing receipts and invoices. The other tool tracks personal expenses.
- QuickBooks vs Xero: This is popular online accounting software for small businesses. Its competitor is for personal use.
- QuickBooks vs Synder: This tool syncs e-commerce data with accounting software. Its alternative focuses on personal finance.
- QuickBooks vs Easy Month End: This is a business tool to streamline month-end tasks. Its competitor is for managing personal finances.
- QuickBooks vs Docyt: This uses AI for business bookkeeping and automation. The other uses AI as a personal finance assistant.
- QuickBooks vs Sage: This is a comprehensive business accounting suite. Its competitor is an easier-to-use tool for personal finance.
- QuickBooks vs Zoho Books: This is an online accounting tool for small businesses. Its competitor is for personal use.
- QuickBooks vs Wave: This provides free accounting software for small businesses. Its counterpart is designed for individuals.
- QuickBooks vs Quicken: Both are personal finance tools, but this one offers more in-depth investment tracking. The other is simpler.
- QuickBooks vs Hubdoc: This specializes in document capture for bookkeeping. Its competitor is a personal finance tool.
- QuickBooks vs Expensify: This is a business expense management tool. The other is for personal expense tracking and budgeting.
- QuickBooks vs AutoEntry: This is designed to automate data entry for business accounting. Its alternative is a personal finance tool.
- QuickBooks vs FreshBooks: This is accounting software for freelancers and small businesses. Its alternative is for personal finance.
- QuickBooks vs NetSuite: This is a powerful business management suite for large companies. Its competitor is a simple personal finance app.
Frequently Asked Questions
What are the main differences between Xero and QuickBooks Online?
Xero is known for its user-friendly interface and strong integrations. QuickBooks Online has a more traditional feel and robust payroll features.
Does QuickBooks offer a free online version?
QuickBooks does not offer a completely free online version. They typically provide trial periods for their paid plans.
Can Xero and QuickBooks Online track employee time?
QuickBooks has QuickBooks Time for tracking employee hours. Xero integrates with various time-tracking apps.
Which accounting features are best for small businesses?
Key accounting features include invoicing, bank reconciliation, expense tracking, and reporting, all offered by both Xero and QuickBooks Online.
Is Intuit the same company as QuickBooks?
Yes, Intuit is the company that develops and owns QuickBooks and a range of other financial software products.
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