Xero vs QuickBooks Online: Features Comparison, Pros, Cons

QuickBooks is generally praised for having a more intuitive user interface, especially for users without an accounting background. Xero, on the other hand, might be slightly more suited to accountants and bookkeepers due to its design. The software must have enough reports that can be generated with a few clicks.

Scalability and suitability for different business sizes

1. Xero took a hit for its lack of assisted onboarding support and new company wizard, but it does offer the ability to import beginning balances—a feature that QuickBooks Online lacks.
2. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services.
3. QuickBooks Online and Xero both have a large collection of integrated apps, which should be enough to cover your business automation needs.
4. Our partners cannot pay us to guarantee favorable reviews of their products or services.
5. Here’s our comparison of the core features provided by Xero and QuickBooks.
6. QuickBooks by Intuit is a well-known accounting software designed to help small to medium-sized businesses manage their finances.

QBO also has a handful of features you generally don’t see with accounting software, including its QuickBooks Capital lending platform and QuickBooks Checking business banking account. Both offer great accounting features and integrations, but which one is better for small businesses? Both Xero and QuickBooks Online have their own versions of transaction tracking tags, but QuickBooks Online is the winner in this arena. Xero lets users create two active tracking categories, while QuickBooks Online allows users to create 40 in the Simple Start, Essentials and Plus plans. The more categories you create, the more reports you can run to get a better idea of how your business functions and where there’s room to grow. Xero’s Early plan, recommended for self-employed how to raise funds for a new nonprofit people or brand-new businesses, allows 20 invoices per year.

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Plans start at $15 per month for up to 20 invoices, five bills, bank account reconciliation, receipt capture and short-term cash flow snapshots. Its $78-per-month plan also includes multiple currencies, project tracking, in-depth analytics and employee expense claims. Despite not offering unlimited invoices and bills in its base plan, Xero accounting software is a more scalable solution than QuickBooks in terms of the number of users it supports. Xero supports unlimited users with all its subscription plans, while QuickBooks allows only up to 40 users with its highest-tiered plan.

A/R Management: QuickBooks Online Wins

It’s worth noting that QuickBooks uses a first-party payment processor, which means that the money goes through QuickBooks, while Xero uses third-party processors, like PayPal or Stripe. Neither of these is better than the other, but it pays to be aware of the differences. Katherine Haan is a small business owner with nearly two decades of experience helping other business owners increase their incomes. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. 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.

Moreover, we’d also like to see customization options to enable users to generate reports based on what they want to see. QuickBooks Online’s customer support is better than Xero’s since you can interact with an agent through a phone call. You can’t initiate a call, but you can submit a ticket and wait for an agent to call you. You might prefer QuickBooks for invoicing and A/R management, and it earned a perfect mark in this category.

This is the exact opposite of QuickBooks, which makes these tools available to all customers. All QuickBooks pricing packages include automatic expense importing and categorization. You can also take photos of receipts and upload them from the mobile app. QuickBooks will automatically match receipts to recorded expenses ultimate guide to financial statement review and compilation or generate new expenses accordingly.

QuickBooks Online is the winner in this category because of its many features that Xero lacks. construction in progress accounting This includes the ability to accept payments, view reports, and assign expenses to customers or projects. However, both mobile apps let you send invoices, capture receipts, enter bill payments, and categorize expenses in the bank feed. Neither Xero nor QuickBooks Online is lacking when it comes to features. Both have basic accounting features, including invoices, estimates, bank reconciliation, expense tracking, and journal entries. With both programs, advanced features like time tracking and inventory management are available on select plans.

Our meticulous evaluation process makes us a trustworthy source for accounting software insights. We don’t just scratch the surface; we immerse ourselves in every platform we review by exploring the features down to the finest nuances. Explore cloud and desktop-based accounting software with subscription and perpetual licensing options like AccountingSuite, Xero, TallyPrime, and Striven. QuickBooks by Intuit is a well-known accounting software designed to help small to medium-sized businesses manage their finances. QuickBooks contains more features and robust functionalities for growing businesses; FreshBooks offers a low-cost, easy-to-use option for freelancers.

Compared to QuickBooks, Xero’s time tracking features are easy to use. You can simply download the free Xero Projects app on iOS and Android, using it to record time and costs, as well as seamlessly and automatically feed the data into invoices and reports. This is because QuickBooks offers an add-on specifically for time tracking, starting at $20 per month (plus $8 per user), while Xero bundles time tracking with its main service. QuickBooks and Xero both offer a lot of features, including all the core abilities that make these two options the best small business accounting software around. Another reason QuickBooks Online stands out is its ability to calculate sales tax rates automatically based on the customer address, which is something Xero can’t do. Hence, it’s no surprise that QuickBooks Online is our overall best invoicing accounting software.

It includes everything in Growing, plus multi-currency accounting, project costing and tracking, expense claims, and in-depth analytics. More specific categories – Business, Accounting, Payroll, Projects, and more – have their own dashboards, accessible with a horizontal sidebar. You can click any data to see a full, detailed breakdown, complete with historical context, and you can set up data tracking to automatically generate specific reports. QuickBooks offers a main dashboard that can be customized with a series of tile-like graphs or lists, which lets you see real-time KPIs at a glance. Core offers the basics, while Premium adds same-day direct deposit, role-based access, and auto time tracking.