QuickBooks vs Xero: Which is Better for Your Business?

When it comes to managing your business finances, accounting software can be a game-changer. Two of the most popular options on the market today are QuickBooks and Xero. While both offer powerful features to simplify accounting, each caters to different business needs. But how do you know which one is right for you?

This post provides a side-by-side comparison of Xero vs. QuickBooks, examining their features, pricing, pros and cons, and expert opinions. By the end, you’ll have a clear understanding of which tool aligns better with your business goals.

Overview of QuickBooks

QuickBooks, developed by Intuit, has been a trusted name in accounting software since its launch in 1983. It’s frequently praised for its comprehensive toolkit designed to streamline bookkeeping, payroll management, and financial reporting. Popular among small to medium-sized businesses, QuickBooks is particularly well-suited for those already using Intuit’s ecosystem of financial tools.

Key Features

• Invoicing: Create and customize invoices with ease.
• Payroll: Integrated payroll services for processing employee salaries and taxes.
• Reporting: Over 100 custom reports to track financial performance.
• Integrations: Excellent ecosystem integrations with tools like TSheets, Shopify, and Square.
• Mobile App: Manage finances on the go with its feature-rich mobile application.

Pricing

QuickBooks offers five pricing tiers:

• Self-Employed ($20/month): Ideal for freelancers and solopreneurs.
• Simple Start ($35/month): Basic features for single users starting a business.
• Essentials ($65/month): Includes multi-user support and bill management.
• Plus ($99/month): Adds inventory tracking and project management.
• Advanced ($235/month): Designed for larger businesses with sophisticated needs.

QuickBooks also frequently runs promotions, offering discounted rates for new subscribers.

Ideal Users

QuickBooks is best suited for small to medium-sized businesses with in-house or third-party accountants. Its variety of plans provides flexibility based on business size and complexity.

Overview of Xero

Founded in 2006 in New Zealand, Xero has quickly become a powerhouse in cloud-based accounting software. With its emphasis on simplicity and collaboration, it is particularly popular among startups and small businesses looking for an intuitive yet robust accounting solution.

Key Features

• Invoicing: Generate branded, professional invoices and send them directly to clients.
• Payroll: Payroll support through integrated third-party apps.
• Reporting: Real-time financial reporting with an easy-to-navigate dashboard.
• Integrations: Access to over 1,000 third-party apps like Stripe, HubSpot, and PayPal.
• Mobile App: A Lightweight app for simple tasks like invoice management and receipt capture.

Pricing

Xero offers a straightforward three-tier pricing model:

• Early ($20/month): Best for sole entrepreneurs or new businesses.
• Growing ($47/month): Great for growing businesses; supports bulk reconciling and bill payments.
• Established ($80/month): Includes multi-currency support for international businesses.

Xero also offers a free 30-day trial, so you can explore its features before committing.

Ideal Users

Xero is a strong choice for small businesses, startups, and freelancers who prioritize ease of use and collaboration. Its scalability also makes it an attractive option for growing businesses.

Feature Comparison

When evaluating QuickBooks vs Xero, features often play a decisive role in choosing the right accounting software for your business. Both platforms offer tools designed to streamline financial management, but their offerings vary in terms of usability, integrations, and pricing. Here’s how the two stack up to help you decide which is the best fit for your needs:

1. Ease of Use

Both QuickBooks and Xero have user-friendly interfaces with intuitive navigation, making them easy to learn and use for beginners. However, QuickBooks has a more traditional layout with a dashboard that displays key financial information at a glance, while Xero has a simpler design focused on features and tasks.

2. Integrations

QuickBooks offers over 650 integrations with third-party apps and services, including popular programs like PayPal, Shopify, and Square. This makes it easier to connect your accounting software to other tools you may already be using in your business. Xero also has an extensive list of integrations (over 800), but its selection is more limited compared to QuickBooks.

3. Invoicing

QuickBooks provides a range of customizable invoice templates, allowing you to tailor them with your company’s logo, branding, and details. You can easily include discounts, attach files, and offer various payment options directly on the invoice.

Similarly, Xero offers flexible invoice templates with support for multiple currencies. It also features automated reminders for overdue payments and enables customers to pay online via credit card or PayPal.

4. Payroll

QuickBooks offers a full-service payroll option where it handles all aspects of payroll on your behalf. This includes automatic calculation and submission of federal and state payroll taxes, as well as issuing direct deposits or printed checks for employees. Additionally, QuickBooks integrates with its accounting software to automatically transfer data from payroll to general ledger accounts. This makes it easier to track and manage expenses related to employee wages.

On the other hand, Xero’s payroll service offers similar features but also includes time tracking, leave management, and employee self-service tools. This allows employees to view their pay stubs, request time off, and submit timesheets directly through the Xero platform.

5. Reporting

QuickBooks provides extensive customizable reporting with over 100 templates, including profit and loss statements, balance sheets, and cash flow statements. Reports can be tailored to specific business needs and generated in real-time to provide insights into your financial health, with the option to combine data from multiple sources for custom insights.

Xero, on the other hand, places a strong focus on real-time reporting, making it ideal for tracking performance. It offers a variety of pre-built reports covering key financial metrics such as revenue, expenses, and cash flow, along with a built-in report builder for creating custom reports.

6. Integrations

QuickBooks integrates with popular business tools like PayPal, Shopify, and Square, but shines the most within Intuit’s ecosystem. Its native apps, such as QuickBooks Payroll for managing employee payments and QuickBooks Time for tracking project hours, enhance its core functionality.

Xero, on the other hand, stands out for its unmatched global compatibility, boasting over 1,000 integrations with business tools and platforms. From project management software like Trello and Asana to advanced CRM and inventory solutions, Xero offers a wide range of options to meet diverse business needs.

• QuickBooks integrates with popular business tools but primarily thrives within Intuit’s ecosystem.
• Xero stands out for its 1,000+ integrations, offering unparalleled global compatibility.

7. Mobile App Capabilities

One of the key factors to consider when choosing accounting software is its mobile app capabilities. QuickBooks offers a robust mobile app for both iOS and Android devices. The app allows users to create invoices, manage expenses, track time, and view reports on their mobile devices. It also features a function that allows users to capture photos of receipts and automatically import them into their account. However, some users have reported bugs and performance issues with the app.

On the other hand, Xero’s mobile app offers similar features to QuickBooks, but with a more user-friendly navigation and interface. It also offers a feature that allows users to reconcile transactions on the go, making it easier for small business owners or freelancers who are always on the move.

Pricing Comparison

QuickBooks and Xero differ significantly in pricing strategies.

• QuickBooks offers multiple pricing tiers, making it more versatile for businesses of various sizes but also more expensive, especially for advanced features.
• Xero, on the other hand, keeps things simple with three straightforward plans. It’s more affordable for startups and small-scale operations but lacks the depth offered by QuickBooks.

If your business operates on a tight budget, Xero offers more value at the lower end of its pricing spectrum, while QuickBooks’ advanced plans cater to larger businesses with complex accounting needs.

Learning and Training Resources for QuickBooks and Xerox

Both QuickBooks and Xero offer a range of learning resources to help users become familiar with the software and maximize its capabilities. These resources are especially useful for those who are new to accounting or bookkeeping.

QuickBooks Training and Certification

Unlock the power of QuickBooks and take control of your financial management with comprehensive training and certification programs from ONLC Training Centers. Whether you’re a seasoned professional or a beginner, ONLC offers flexible and in-depth courses for both QuickBooks Online and Desktop Enterprise versions.

Choose from live, instructor-led classes—available online or in-person—or opt for self-paced, On-Demand courses featuring 24/7 access to tutorials and hands-on labs.

Upon completion, you can pursue the industry-recognized QuickBooks Certified User (QBCU) certification for QuickBooks Online, validating your proficiency in the latest cloud-based software. (Note: Intuit discontinued desktop version certification as of December 15, 2022.)

Visit the QuickBooks Training & Certification page to learn more and enroll.

Xero Learning Resources

Xero is a cloud-based accounting software widely used by small businesses and independent accountants for managing their finances. It offers a range of features including invoicing, inventory management, payroll services, and more.

If you are interested in learning Xero, various online resources are available to help you acquire the necessary skills and knowledge. Here are some recommended learning resources:

• Xero Central – This is an official website by Xero that provides tutorials, guides, and videos on how to use their software.
• YouTube tutorials – There are various YouTube channels that offer free Xero tutorials for beginners.

QuickBooks vs. Xero: A Look at the Pros and Cons for Your Accounting Software Needs

When choosing accounting software for your business, the decision often comes down to popular contenders like QuickBooks Online accounting software and Xero. Both offer robust features, but they cater to different business needs. Here’s a comparison highlighting their pros and cons:

QuickBooks Pros

• Tailored Pricing and Extensive Features: QuickBooks offers diverse pricing plans designed for various business types, ensuring you can find a fit for your specific operational scale. It boasts an extensive feature set, ideal for businesses requiring in-depth expense tracking, comprehensive reporting, and intricate accounting functionalities.
• Seamless Intuit Ecosystem Integration: A major advantage of QuickBooks is its seamless integration within the Intuit ecosystem, providing a unified experience for users of other Intuit products.

QuickBooks Cons

• Higher Price Point: For businesses needing premium features, QuickBooks can come with a higher price point compared to some competitors in the Xero vs QuickBooks debate.
• Steeper Learning Curve: New users, especially those without an accounting background, might find that QuickBooks has a steeper learning curve, requiring more time to master its vast capabilities.

Xero Pros

• Affordable and User-Friendly: Xero stands out for its more affordable pricing, making it an attractive option for startups and small businesses. Its user-friendly interface and real-time collaboration features simplify financial management for multiple users.
• Extensive Integrations: A key strength of Xero and QuickBooks is their integration capabilities, but Xero shines with an even more extensive network of over 1,000 app integrations, offering broad flexibility for businesses with diverse software needs.

Xero Cons

• Limited Native Payroll Support: One drawback of Xero is its more limited native payroll support, which might require additional add-ons or third-party solutions for comprehensive payroll management.
• Less Advanced Reporting: While robust, Xero’s reporting capabilities are generally not as advanced as those offered by QuickBooks, particularly for businesses requiring highly detailed or specialized financial analyses.

FAQs

Which platform is better for managing multiple bank accounts?

Both QuickBooks Online Advanced and Xero allow you to connect and manage multiple bank accounts seamlessly. However, QuickBooks Online Advanced offers a more robust platform for businesses handling larger volumes of transactions.

Can I use either platform for tax preparation and deductions?

Yes, both Xero and QuickBooks offer excellent tools for tax preparation. QuickBooks Online Advanced, in particular, provides smart features for tracking tax deductions, ensuring businesses can maximize their savings during the tax season.

Which software is better suited for advanced accounting needs?

QuickBooks Online Advanced is specifically designed for businesses requiring advanced accounting tools and reporting capabilities. It’s ideal for growing businesses that have more complex financial needs.

Are these platforms user-friendly for small businesses?

Both Xero and QuickBooks are recognized for their intuitive designs and user-friendly interfaces. Xero is often praised for its simplicity, while QuickBooks Online Advanced provides a broad range of features tailored for scalability.

How do they compare in terms of integration with other accounting tools?

QuickBooks Online Advanced and Xero both integrate with numerous third-party accounting tools, allowing businesses to tailor their software experience to meet their specific needs. This flexibility ensures seamless management of financial tasks.

Which Accounting Software Should You Choose?

The decision ultimately depends on your business’s size, priorities, and budget. Here’s a quick summary:

• Choose QuickBooks if your business requires robust reporting tools, advanced payroll features, and can accommodate a slightly higher price point.
• Choose Xero if you’re looking for affordable, user-friendly software with superior integrations and real-time collaboration.

Not sure? Take advantage of free trials from both platforms to see which feels like the right fit.

Whichever you choose, seamless accounting can save time, reduce errors, and give you peace of mind by keeping your financials in check.

If you decide on QuickBooks, make the most of it with ONLC’s QuickBooks courses. Gain the skills you need to manage your accounting efficiently—check out our courses today!