Xero vs QuickBooks: Which Is the Better Accounting Software?


Xero vs QuickBooks: Which Is the Better Accounting Software?

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For QBO, you pay a monthly subscription rather than an upfront fee, and you get all the patches and software updates from Intuit. In this article, we’ll mostly refer to QuickBooks Online, which is what we think you’ll likely opt for instead of Intuit’s desktop version of QuickBooks. Our evaluation was based on a rubric scoring methodology in six categories, each with a designated appropriate percentage. Whether Xero or QuickBooks Online is right for you depends on the specific features you need and how much you can afford to pay.

Additionally, the software comes equipped with diverse tools and invoicing capabilities that have proven valuable to business owners. These attributes combine to make QuickBooks a reliable and versatile choice that suits the needs of many small businesses. QuickBooks Online is more versatile than Xero in terms of invoicing. There are plenty of customization options, which can be a great deal for those wanting to present and maintain a professional brand image. 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.

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  • Both software options offer a wide range of integrations and add-ons that can help businesses streamline their operations and improve their workflows.
  • You can rely both on Xero and QuickBooks Online for project accounting, but if you want a more detailed option of tracking your profitability, then Xero may be better.
  • Plus, if your company needs more capability than these, you’ll have to upgrade to the Growing plan, which is more than three times the price of the Early plan.
  • QBO gives you additional options to email reports right within the application, and add notes to your reports.

While searching for accounting software, you might also come across something called QuickBooks Online Essentials. This is a different product than the ordinary accounting software, and it’s specially designed for service-based businesses which invoice for their time. With this tool, you can automate invoices on a recurring schedule, track income and expenses and pay multiple vendors at the same time. The Xero mobile app is for Android and iOS devices is free when you sign up for a subscription. It offers easy access to Xero’s accounting tools on the move, including looking up contacts, sending invoices and reconciling bank transactions.


Automatically include unbilled time and expenses on your invoices, and set up recurring invoices and auto-bill for quick and easy collections. You can track business expenses easily with QuickBooks to always know where the money is going. Once you connect QuickBooks to your credit cards, bank accounts, PayPal, Square, and more, it will import your expenses and categorize them for you. You can save photos of the receipts using the mobile app and stay updated to never miss any tax deductions. However, Xero provides the unique ability to reimburse employee expenses, including mileage reimbursement. We like that this is a built-in platform feature you can also use from the mobile app.

  • Overall, Xero is a reliable and efficient option for businesses looking to streamline their accounting processes and stay on top of their finances.
  • We also liked Xero’s built-in integrations with the payment processor Stripe, the CRM HubSpot, the email marketing platform Mailchimp and the e-commerce platform Shopify.
  • One of the benefits of using accounting software like Quickbooks and Xero is the ability to integrate with other business tools and add-ons.
  • Xero and QuickBooks Online are two of the most popular accounting software platforms.

Plus, as your business grows, upgrading to the next pricing tier is easy. Every service plan includes all the tools your business needs to oversee its finances from the desktop or via the powerful QuickBooks mobile app. Despite not offering unlimited invoices and bills in its base plan, Xero accounting software is a more scalable solution than QuickBooks in the number of users it supports. Xero supports unlimited users with all their subscription plans–in contrast, QuickBooks allows only up to 40 users with its highest-tiered plan.

All Xero pricing plans include 24/7 online customer support; you can cancel with one month’s notice. We also like that Xero has an optional Gusto payroll integration for each platform at no extra cost. Xero’s compatibility with over 1,000 third-party apps puts it ahead of QuickBooks’ 750 apps, making it the clear winner on integrations. We think that growing startup businesses will find Xero’s ability to sync with other big-name apps particularly useful. While there is some overlap in third-party integrations, both QuickBooks and Xero include some syncing options that the other doesn’t. Make a list of the business productivity apps that you use most often and check for compatibility on the Xero and QuickBooks app stores.

QuickBooks vs. Xero: Comparing Top Accounting Software Platforms

QuickBooks offers discounts on accounting software if you bundle with other Intuit products, such as TurboTax and QuickBooks Payroll. On the other hand, Xero has more than double the integrations as Quickbooks, with over 1000 tools to add to your online accounting software. Link inventory and invoicing tools, and integrate with Gusto Payroll or Hubspot CRM. While both software will let you create recurring bills, only QuickBooks will allow you to schedule automatic recurring payments. In addition, because QuickBooks is so well known and widely used, it is easy to find a local bookkeeper fluent in QuickBooks accounting software.

The Benefits of Xero

We also found it easy to apply formulas in Xero to compare our budget and actuals side by side. Smart Reporting, powered by Fathom, provides tools to analyze your business metrics. This website is using a security service to protect itself from online attacks. There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

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Xero has automatic bank feeds, which means that all you have to do is make the initial connection between the software and your bank. After that, the data will be updated automatically every business day. There are no manual uploads needed, and you can set up secure, encrypted feeds from any number of different bank accounts. QuickBooks splits its pricing plans into two categories – one for freelancers and sole traders, and another for businesses. If you only have Self Assessment to worry about, you can choose a Self-Employed or Simple Start plan for the very low price of £4-6 a month.

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QuickBooks Online’s most popular Plus plan tops out at five users; its highest-tier Advanced plan allows up to 25 users, but that plan is expensive at $200 per month. In contrast, all Xero plans offer unlimited users and its highest-tier Established plan is a more affordable $70 per month. If you’re in the market for accounting software, you might be feeling overwhelmed by all the options out there. While Xero and QuickBooks are wildly popular, they’re not the only options available. There are a number of alternative accounting software programs that can offer powerful features and a user-friendly interface. Xero is a better option for businesses that need to track project profitability.

Whether you are a startup, solopreneur, or small business owner, accounting is a crucial aspect of your business that you must effectively manage. QuickBooks comes with free access to a searchable knowledge base, guides, videos, articles and the QuickBooks Assistant chatbot. Formal training classes are also available through QuickBooks; these cost $599.95 for your first attendee and $250 for additional participants.

Which Bookkeeping and Accounting Software is Right for Your Business?

From the desktop suite, you can set custom rules for categorizing all expenses. You can add billable expenses to the invoices you send clients via mobile or desktop. QuickBooks nonprofit fraud prevention and Xero both offer great mobile apps for you to run your business from a smartphone. The main apps also garner similar ratings on the Apple and Google app stores.

We believe everyone should be able to make financial decisions with confidence. For example, when you purchase the Pro Plus Desktop plan, you can have up to three concurrent users but each of those users must pay for their own account (at $349.99 each per year). Its Online version allows up to 25 users at no additional cost, provided you’re paying for the Advanced plan. Another key difference between the two companies is the maximum number of users it allows.

On other hand, Time Tracking is included in every QuickBooks Online Subscription, starting with Essentials. Integrates with more than 750 apps and offers live, in-house bookkeeping add-on. Our partners cannot pay us to guarantee favorable reviews of their products or services. The top products based on usability and customer satisfaction, as rated by user reviews.

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