Xero vs. QuickBooks: Which Is Better?

If you're looking for new small business software, you've probably heard of Xero and QuickBooks. After all, these popular financial monitoring software look like wonderful options, making choosing one for your organisation hard.

We'll compare Xero vs QuickBooks in this blog article so you can choose the right tool for your business. We'll compare Xero vs QuickBooks' simplicity of use, pricing, security features, platform availability, customer satisfaction ratings, and more to help you decide which will best help your business succeed.

Xero vs. QuickBooks: At a Glance

QuickBooks is available online and on the desktop for companies that outsource accounting to bookkeepers or accountants. Australia doesn't have the desktop version.

This is because QuickBooks' highest-tiered subscription only enables 40 user accounts, and certain packages require each client to pay for their account. On the other hand, Xero allows for an unlimited number of users. As a result, Xero is the perfect accounting software for companies that already have an in-house bookkeeping or accounting staff.

QuickBooks' UI is simpler than Xero's. The reason is that Xero was designed for accountants and bookkeepers, whereas QuickBooks was created for small businesses without accounting experience. QuickBooks is best for organisations who need to track inventory since it provides inventory management tools out of the box. Xero manages stock, although it's not its core function.

Xero is a superior choice for companies that must monitor the profits of individual projects. This is because Xero gives you the ability to view in real-time how much money every project is costing you and then contrast that amount to the earnings you anticipate making from the project. In addition, Xero is a better choice than other options for companies extending their operations overseas because it supports multiple currencies.

Who Is Xero For?

Xero is an outstanding accounting software choice for entrepreneurs of small and new businesses, and it is especially suitable for proprietors of companies who know nothing about accounting but still want to control their finances correctly. Xero is also an awesome choice for company entrepreneurs who know nothing about accounting but must appropriately control their finances.

The user interface for Xero's accounting software is straightforward and simple, and it provides novice customers access to a demonstration firm where they may play around with information without the risk of inadvertently entering or erasing vital info.

Who Is QuickBooks Online For?

QuickBooks Online, an outgrowth of the widely used desktop application QuickBooks, is a wonderful fit for companies that are just starting as well as those that are expanding.

In comparison to the desktop version, QuickBooks Online now gives companies that are expanding the choice to utilise a program that they will be unable to outgrow in a relatively short period. This is because QuickBooks Online was initially created for really smaller firms.

Support Comparative Analysis of Xero vs QuickBooks Online

You attempted to insert data, but it is not appearing anywhere. Despite completing the transfer processes, it won't be published. No sign-in with this item. You will need technical assistance to resolve all of these difficulties, which may cause you a lot of frustration.

Who will emerge victorious between Xero and QuickBooks Online when it comes to providing support persons, despite both accounting systems making available a vast number of how-to articles, knowledge representation, and active user communities?

Xero's Offerings

The following is a list of the client service support offerings provided by Xero:

• Email support
• User guides
• Knowledgebase
• Help articles
• In-product help
• User community
• Product training

Because the accounting features offered by Xero are easy to access, these services will likely be enough if and when an issue arises.

QuickBooks's Offerings

The following is a list of the assistance choices that are available through QuickBooks Online:

• In-product help
• User community
• Knowledge base
• Product training
• Help articles
• Connect with a support agent through email
• Connect with a support agent through messaging
• Connect with a support agent through a call-back

QuickBooks Online has a lot of information, so you won't need to enquire how to use it often. Users can utilise the question mark in the top right corner of the screen for help.

Results

QuickBooks Online comes out on top in this case. Live help is superior to chat or email support in every circumstance. Of course, it's possible that you'll never be required to call assistance, but knowing that it's a choice is still helpful.

Xero vs. QuickBooks Online: Setup

The procedure of setting up Xero varies significantly from that of QuickBooks Online, which is one of the primary distinctions between the two.

The accounting functions of Xero use a very organised setup procedure consisting of eight separate steps, whilst QuickBooks Online enables users to complete only the minimum necessary and get up and begin, providing significant information only when required. Xero's setup procedure also necessitates more information than QuickBooks Online does.

Despite the fact that this, once again, might be attributed to the preferences of the user, I enjoy having the option to begin using the service immediately.

Xero's Offerings

Xero employs a very disciplined process for setting up accounts, which is beneficial for individuals who prefer that everything be organised before beginning work.

QuickBooks's Offerings

The accounting software that comes with QuickBooks Online offers a more flexible setup framework, which enables you to enter only the information that is absolutely necessary and add the rest as you progress.

Results

For the easiest and most intuitive setup, we recommend QuickBooks Online, although those who are more methodical might disagree.

Managing Your Bank Accounts and Your Cash Using Xero vs. QuickBooks Online

QuickBooks is significantly more versatile than Xero despite both programs having capabilities for reconciling bank accounts. With QuickBooks, you can reconcile a bank account by inputting the closing account balance and manually identifying operations your bank has processed.

You are not required to link your bank account if you use QuickBooks Online because it allows you to download your file of operations instead of requiring you to link your bank account. However, if you want to reconcile your operations using Xero, you will need first to connect up your account.

Comparing Xero and QuickBooks Online with Regard to Invoicing

Regarding billing customers, QuickBooks Online offers greater flexibility than Xero does. However, those who wish to establish and keep a professional brand reputation will find that the availability of many customisation possibilities can be of enormous value to them.

Xero is unable to perform the function of instantly calculating sales tax rates depending on the client's location. However, QuickBooks Online is able to do so. This is another reason why QuickBooks Online stands apart. As a result, it should come as no surprise that QuickBooks Online is the best invoicing accounting system we offer overall.

Comparing Accounts Payable Between Xero and QuickBooks Online

QuickBooks Online has a slight advantage over Xero because of its capability to create recurring payments. However, both systems have excellent accounts payable functionality. Xero allows you to generate regular bills but not the payments themselves, which implies that it doesn't regularly deduct money from your bank account.

Comparison of Xero and QuickBooks Online for Managing Fixed Assets

Regarding accounting for fixed assets, Xero is light years ahead of QuickBooks Online. For example, QuickBooks Online allows you to record the purchase of a fixed asset, but it does not allow you to manage your fixed assets or compute depreciation on those assets. On the other hand, Xero's fixed asset management is rather outstanding.

It enables you to record the purchase of a fixed asset and subsequently compute the depreciation of that item. You can also create asset kinds and give each asset its unique account ID. When you dispose of an asset, the programme will determine whether you made a profit or a loss on the transaction. Pick Xero if maintaining accurate records of your company's fixed assets is a priority for your company.

Comparing Xero with QuickBooks Online for Accounting of Bills and Expenses

Advanced mobile applications are available for both Xero and QuickBooks, making it simple to capture receipts while on the move and preventing the accumulation of paper.

Xero's chart of accounts makes it straightforward to classify the cash flow into and out of your business. It may take some time to get accustomed to, but once you do, you should be right (contact your accountant for advice on which accounts to use for various purposes). You shouldn't have any issues after that.

QuickBooks makes it easy to manage both bills and costs. It is simple to monitor, personalise, and keep track of spending within every section using the chart of accounts.

In contrast to Xero, where cost capability is either available as an add-on or locked behind higher plan tiers, Quickbooks includes this feature as standard across all its pricing tiers. If you run a small business, this may result in some little cost savings as well as additional ease of operation.

Comparison of Integrations Between Xero and QuickBooks Online

When searching for the most effective accounting solution for your company, ensure you do not ignore the significance of integration. Your accounting software is one of your most important tools; therefore, you must integrate it into the rest of your processes for the best possible outcomes.

Keep an eye out for possible integrations with:

• Your CRM system
• If you use a separate program to track your time, such as Harvest, your time-tracking tool.
• Tools for reporting
• E-commerce
• The online marketing tool that you use.
• There are also other products that offer more advanced accounting add-ons, like the capability for point-of-sale systems, inventory management, and debtor tracking, among other things.

Both Xero and QuickBooks provide a respectable number of integrations inside their respective markets for customers to choose from.

Comparing Xero with QuickBooks Online in Terms of Their Suitability for Businesses of Varying Sizes

QuickBooks is an excellent low-cost option for freelancers and smaller companies, whereas Xero is preferred by growing startups, as discussed previously.

But what happens to bigger enterprises and businesses that work at the enterprise level?

Compared to QuickBooks Online, Xero offers a larger number of mid-market enterprises with between 51 and 1000 employees. A more comprehensive accounting system or enterprise resource planning software like Sage Intacct or NetSuite is likely a better solution for larger organisations and companies operating at the enterprise level that want greater transparency, power, and visibility into their sales margins.

Consider Intuit's wider software package, which includes QuickBooks Enterprise Solutions. This particular edition of QuickBooks is said to have six times more capacity than that of the other editions of QuickBooks. In addition, the Enterprise edition allows as many as 30 people, can accommodate as many as one million list items and has superior reporting, inventory management, and printing capabilities.

Accountant Opinions

At tax time, it is really important to have people who comprehend your software and can assist you in getting the most out of the program. So whether you have an accountant, it is also worthwhile to investigate if they have a favourite programme for their clients.

Accountants have a lot of affection for Xero and QuickBooks, and their choice of one over the other may come from geography. QuickBooks holds a dominant market share in the United States, although Xero is more popular in Europe, Australia and New Zealand.

To Sum Up, Why QuickBooks Online Triumphs

1. There Is No Maximum Invoice Amount

Every QuickBooks Online subscription program outlines capabilities for an unlimited number of invoices. For example, Xero's Early package, intended for those who work for themselves or organisations that have just started up, enables users to create 20 invoices each year.

If you just send out one or two invoices each month, the Early package, which costs $13 a month, is an affordable alternative for you to consider. However, in that case, you will be required to pay a higher subscription fee or investigate the various options offered by QuickBooks Online.

2. Claiming Costs

QuickBooks Online enables users to claim expenditures and upload images of associated receipts at all levels. Still, Xero necessitates the usage of Xero Expenses, a supplementary tool only available in its most expensive Established subscription package. If taking pics of receipts to claim costs while you're on the move is a vital mobile feature you would like to possess, independent of plan level, QuickBooks Online may be the right match for your other options.

3. Tags for Recording Transactional Activity

Although Xero and QuickBooks Online each offer their take on transaction monitoring tags, QuickBooks Online comes out on top regarding this particular category. The Simple Start, Essentials, and Plus versions of QuickBooks Online each enable users to set up 40 electronic monitoring sections. In contrast, Xero allows customers to set up two active monitoring categories.

The Advanced package of QuickBooks Online enables users to create unlimited tag groups. The more groups you establish, the more reports you'll be able to generate to gain a clearer picture of how your company operates and where there may be opportunities for expansion.

When It Is Preferred That You Use Xero Instead

1. Free of Charge for an Unlimited Number of Users

Xero may be superior if you share accounting data with more than five people. QuickBooks Online's most popular subscription, Plus, supports five clients. Advanced, the company's most expensive package, permits 25 users for $200 monthly. In comparison, Xero's plans have unlimited user counts, even the most expensive ones. The more reasonable cost of the established plan is $70 per month.

2. Ease of Operation

Xero is well-known for having a straightforward and modern design, which may make it seem more accessible to company owners unfamiliar with accounting fundamentals. In addition, in contrast to QuickBooks Online, the program enables you to personalise the dashboard in such a way that it displays only the data that is most relevant to your company. This may require rearranging the panels in some way or hiding them entirely.

3. Standard Tracking of Inventories Is Included in All Packages

Inventory control is only included in QuickBooks Online's higher-tier plans, so you will need more money to afford the $85-per-month Plus plan to utilise it. The inventory management feature is not included in QuickBooks Online's lower-tier plans.

This might be a significant drawback for smaller online retail enterprises, for example, that must maintain track of the items they sell as well as the components that go into their production. Inventory management is included in each of Xero's packages, allowing business proprietors to keep tabs on their available inventory and the items that are moving off the shelves.

Be aware, however, that in contrast to the stock feature offered in the higher-tier plans of QuickBooks Online, Xero does not permit users to set up reorder points that signal when stock is getting low on a particular item.

Alternate Solutions to Xero and QuickBooks Online

1. FreshBooks

Freelancers and independent contractors who are searching for an accounting programme that is both economical and easy to use may find success with FreshBooks. Time monitoring is included in all packages, and customer service may be reached by phone from 8 a.m. to 8 p.m. Eastern Time, Monday through Friday. The first two plan tiers each have a limitation on the number of chargeable clients, but there is no cap on the number of invoices.

2. Zoho Books

Zoho Books offers plans suitable for a wide range of budgets, beginning with a free version and moving up to subscription plans beginning at $20 monthly. Higher-tier plans include workflow rules and project feasibility tools.

Paying users have 24/7 phone and live chat support. The number of third-party connections is lower than Xero and QuickBooks Online.

Content Summary

• If you're looking for new small business software, you've probably heard of Xero and QuickBooks.
• We'll compare Xero vs QuickBooks' simplicity of use, pricing, security features, platform availability, customer satisfaction ratings, and more to help you decide which will best help your business succeed.
• Xero is an outstanding accounting software choice for entrepreneurs of small and new businesses, and it is especially suitable for proprietors of companies who know nothing about accounting but still want to control their finances correctly.
• QuickBooks Online, an outgrowth of the widely used desktop application QuickBooks, is a wonderful fit for companies that are just starting as well as those that are expanding.
• In comparison to the desktop version, QuickBooks Online now gives companies that are expanding the choice to utilise a program that they will be unable to outgrow in a relatively short period.
• The procedure of setting up Xero varies significantly from that of QuickBooks Online, which is one of the primary distinctions between the two.
• The accounting software that comes with QuickBooks Online offers a more flexible setup framework, which enables you to enter only the information that is absolutely necessary and add the rest as you progress.
• QuickBooks is significantly more versatile than Xero despite both programs having capabilities for reconciling bank accounts.
• However, if you want to reconcile your operations using Xero, you will need first to connect up your account.
• As a result, it should come as no surprise that QuickBooks Online is the best invoicing accounting system we offer overall.
• QuickBooks Online has a slight advantage over Xero because of its capability to create recurring payments.
• However, both systems have excellent accounts payable functionality.
• Regarding accounting for fixed assets, Xero is light years ahead of QuickBooks Online.
• On the other hand, Xero's fixed asset management is rather outstanding.
• Pick Xero if maintaining accurate records of your company's fixed assets is a priority for your company.
• Xero's chart of accounts makes it straightforward to classify the cash flow into and out of your business.
• When searching for the most effective accounting solution for your company, ensure you do not ignore the significance of integration.
• Your accounting software is one of your most important tools; therefore, you must integrate it into the rest of your processes for the best possible outcomes.
• There are also other products that offer more advanced accounting add-ons, like the capability for point-of-sale systems, inventory management, and debtor tracking, among other things.
• Both Xero and QuickBooks provide a respectable number of integrations inside their respective markets for customers to choose from.
• QuickBooks is an excellent low-cost option for freelancers and smaller companies, whereas Xero is preferred by growing startups, as discussed previously.
• Compared to QuickBooks Online, Xero offers a larger number of mid-market enterprises with between 51 and 1000 employees.
• A more comprehensive accounting system or enterprise resource planning software like Sage Intacct or NetSuite is likely a better solution for larger organisations and companies operating at the enterprise level that want greater transparency, power, and visibility into their sales margins.
• So whether you have an accountant, it is also worthwhile to investigate if they have a favourite programme for their clients.
• Accountants have a lot of affection for Xero and QuickBooks, and their choice of one over the other may come from geography.
• Every QuickBooks Online subscription program outlines capabilities for an unlimited number of invoices.
• QuickBooks Online enables users to claim expenditures and upload images of associated receipts at all levels.
• If taking pics of receipts to claim costs while you're on the move is a vital mobile feature you would like to possess, independent of plan level, QuickBooks Online may be the right match for your other options.
• Although Xero and QuickBooks Online each offer their take on transaction monitoring tags, QuickBooks Online comes out on top regarding this particular category.
• Xero may be superior if you share accounting data with more than five people.
• In comparison, Xero's plans have unlimited user counts, even the most expensive ones.
• Inventory control is only included in QuickBooks Online's higher-tier plans, so you will need more money to afford the $85-per-month Plus plan to utilise it.
• Inventory management is included in each of Xero's packages, allowing business proprietors to keep tabs on their available inventory and the items that are moving off the shelves.
• Be aware, however, that in contrast to the stock feature offered in the higher-tier plans of QuickBooks Online, Xero does not permit users to set up reorder points that signal when stock is getting low on a particular item.
• Freelancers and independent contractors who are searching for an accounting programme that is both economical and easy to use may find success with FreshBooks.
• Zoho Books offers plans suitable for a wide range of budgets, beginning with a free version and moving up to subscription plans beginning at $20 monthly.
• Higher-tier plans include workflow rules and project feasibility tools.
• The number of third-party connections is lower than Xero and QuickBooks Online.