Xero vs QuickBooks Online: Features Comparison, Pros, Cons

Depending on several factors, including the size of your business and the type of business you run, either QuickBooks or Xero will be your best choice. Xero is a better solution for large and growing companies that don’t want a cap on the number of users needing access to the software. On the other hand, Quickbooks is a favorite small business accounting software for companies that need to be able to outsource their bookkeeping to a hired accountant. 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.

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Then, we award each piece of software a rating out of five for each of these categories to understand how they compare against each other. Aside from helping us to determine which solution is stronger overall, these scores also help us to determine which product is better suited to different types of businesses. QuickBooks and Xero both have good support and training options, but QuickBooks has phone support while Xero does not, earning it a research score of 4.7 – nearly double Xero’s 2.4/5. Meanwhile, a vertical sidebar can take you to more in-depth dashboards dedicated to topics including Workers, Taxes, and Reports.

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. QuickBooks Online is an industry standard with more than 5 million users worldwide. If you count QuickBooks Desktop users, that number rises to 8 million. With more than 3 million users worldwide, Xero is popular but not as ubiquitous as QuickBooks Online.

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Xero is strong accounting software that has everything you need to track the financials of your business. Some of its features really stand out, such as its customer management system. Add-ons include QuickBooks Payroll, which starts at $50/month plus $6/month per employee. QuickBooks Payments allow you to accept ACH, credit card, debit card, and other payments at rates of 1% to 3.5% per transaction.

This software is best suited for small to mid-sized businesses, although its Advanced Plan that supports up to 25 users does make it a viable option for larger 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. All plans include 24/7 live chat support; phone support is available 5 a.m.

QuickBooks offers a more integrated suite of features compared to Xero. With features like automatic expense tracking, a user-friendly interface, and extensive reporting options, QuickBooks aims to streamline financial management for small businesses. It’s particularly well-suited for businesses who prioritize an all-in-one solution. The Plus Plan is $45 per month for the first three months, then becomes $90 per month, and adds up to five users. It also has inventory management and gives you the ability to project profitability with forecasting reports.

1. QuickBooks’ sidebar is vertical and on the left, while Xero’s is horizontal across the top, both deliver about the same user experience, and user satisfaction is high for both.
2. However, despite Wave’s advantages, its overall offering is pretty basic and support tools leave a lot to be desired, giving it a 4/5 score overall.
3. Users must have easy access to customer service channels in case of problems, questions, or assistance.
4. Read our comprehensive QuickBooks Online review to decide if this popular accounting software is the best choice for your needs and budget.
5. This is because QuickBooks was designed for small businesses that might not have an accounting background, whereas Xero was designed with accountants and bookkeepers in mind.
6. Both have great A/P features, but QuickBooks Online is slightly better due to its ability to generate recurring payments.

Time Tracking

Some small businesses may also benefit from using Xero but may find that the learning curve of the software and the limitations of Xero’s lowest-cost plan may not be worth the time and expense. Xero offers simple inventory tracking software that can track up to 4,000 finished items. With Xero, you can view the number of items you have available and see the total value of stock on hand for any item. Its inventory management reports will show you how well different items are performing and which ones are the most profitable. And you can also easily add inventory Items to quotes, fasb drops step 2 from goodwill impairment test invoices and purchase orders to make billing easy. Xero also offers mobile receipt capture through its Xero Me mobile app (previously called the Xero Expenses app), though you’ll need to upgrade to the Established plan to claim expenses.

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We went to user review websites to read first-hand reviews from actual software users. This user review score helps us give more credit to software products that deliver a consistent service to their customers. While it’s not part of our case study, we evaluated Xero vs QuickBooks Online in terms of assisted bookkeeping.