Xero vs QuickBooks Online: Features Comparison, Pros, Cons

xero vs quickbooks

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 and Xero offer popular software to maintain your business’s books, send invoices and perform other accounting functions. On the other hand, QuickBooks Online does not distinguish its plans in the same way. Despite the huge price difference between each of the QuickBooks Online plans, each higher-level plan also comes with a slew of new features. The Essentials plan is $15 more expensive than Simple Start, but it includes Bill Management, Time Tracking, and Multi-User Access in addition to the Simple Start capabilities.

  • However, if you work with multiple vendors and customers and need more enhanced features, you should consider QuickBooks Online Plus.
  • Whatever your needs, there’s sure to be an accounting software program that’s a perfect fit.
  • Yes, QuickBooks’ accounting tools do come in a little higher in overall pricing, but the plan options are more flexible and offer more features than Xero’s plans.
  • Conversely, Xero offers its own impressive feature set, such as invoicing, project time tracking, inventory management, payroll processing, and bank connections.

QuickBooks also offers a number of tailored reports, including QuickBooks reports for nonprofits, which let organizations track their donations and finances with one tool. Just keep in mind that unlike the inventory feature in QuickBooks Online’s higher-tier plans, Xero doesn’t let users set up reorder points that flag when stock is running low. Integrates with more than 750 apps and offers live, in-house bookkeeping add-on.

Xero vs. QuickBooks Online: Setup

Xero is ideal for contractors with fixed assets that are looking for a lot of users at a low cost. You can also post your time and project records every day with the QuickBooks Time app. Whether you’re a contractor, handyman, plumber, or painter, the app allows you to track time from any location using devices you already have. With the QuickBooks Online app, you can enable mileage tracking and drive.

xero vs quickbooks

Integrating Xero with Gusto ensures that your general ledger will update automatically whenever you process payroll. You can do a lot with QuickBooks Online, but all the options may feel like information overload starting out. Can support larger small businesses with dozens of employees; all three plans include an unlimited number of users. This doesn’t mean QuickBooks Online is the right choice for all businesses, though. Xero’s unlimited-users feature makes it a winner among larger businesses and well-established small businesses that require more than five users.

QuickBooks Online doesn’t have fixed assets modules built in to its accounting software, so everything has to be handled manually. There is a learning curve to the accounting software, but this is partially because it can do so much. With more capabilities and options, it just takes longer to learn how to use it. It’s easier to outsource it than to calculate and collect on taxes yourself.

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On the other hand, Xero offers a mobile app for tracking time and projects. ZipBooks gives you unlimited invoicing and customers right from the start, with fully customizable invoices, colors, and logo upload. Save common line items for use on future invoices, send reminders to keep on top of outstanding balances, and let your customers pay right from their invoices in a snap. Automatically include unbilled time and expenses on your invoices, and set up recurring invoices and auto-bill for quick and easy collections.

Comparing the user-friendliness of QuickBooks Online and Xero is somewhat of an apples to oranges situation. Unlike QuickBooks Online, Xero also gives you an equity statement, which is useful if your business has several investors. It displays the owners’ investments and equity draws, as well as profits or losses kept in the business. If you’re concerned that one owner may be taking too much out of the business, it will quantify those concerns. When it comes to Xero Report Styles, the Monthly Reports are organized from left to right, most current month to oldest. This layout, on the other hand, is backward for most Company Accountants.

If you need comprehensive bank reconciliation, class and location tracking, good customer support, and easy access to local bookkeepers, then QuickBooks Online wins. Xero is proud of how easy it is to use, which makes it a good choice for small and medium-sized businesses. It has things like billing, bank reconciliation, tracking of expenses, and financial reports. The dashboard in Xero gives you an overview of your finances, and the regular bank feeds help keep your accounts up-to-date without you having to enter data by hand.

The problem is that you must have already paid a bill to the vendor and it has to have passed through the register for you to make it recurring. If you’re new to the software, you won’t be able to automate your monthly payments from the get-go like you can in Xero. It’s not enough to send an invoice, though, you also need to collect payment. QuickBooks Online has payment links and payment processing integrated into its invoicing system. Customers just have to click and enter their credit card information, but you’ll have to pay merchant processing fees if they do. QuickBooks also offers two stand-alone apps — QuickBooks Time and QuickBooks Projects.

xero vs quickbooks

When comparing the Bank Feed features of Xero vs QuickBooks However, they appear to be significantly distinct online and will naturally appeal to different bookkeeping preferences. Now that you’ve gotten a better sense of what Xero and QuickBooks Online have to offer, let’s take a closer look at how their features compare. 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.

It’s designed specifically for small businesses and offers invoicing, time tracking and expense management. QuickBooks is available both online and via desktop and is ideal for businesses that outsource their accounting tasks to a bookkeeper or accountant. This is because QuickBooks only allows up to 40 users for its highest-tiered plan, and even then, some plans require every user to pay for their own account.

QuickBooks Online’s dashboard doesn’t show upcoming bills, only expenses paid. It has more of a historical perspective than one that looks to the future. Paying a new bill is simpler in Xero than it is in QuickBooks Online. All you have to do is navigate to “purchases” under “accounting,” select “new,” then click “bill.” QuickBooks Online involves a few more steps. When comparing Xero vs QuickBooks Online, one of the most prominent ways in which this QuickBooks Solution distinguishes out is with its Tax Capabilities.

Xero vs QuickBooks Online: Mobile App Functionality

Both solutions performed very well in our testing, with QuickBooks earning an overall score of 4.7 out of 5 from our accounting experts, compared to Xero’s 4.5 out of 5. These are the two highest scores our research team gave any accounting solutions. While it has numerous advantages, there are a few drawbacks to consider before deciding if Xero is the right choice for your business.

  • When you delve deeper, though, you’ll find key differences between Xero and QuickBooks Online.
  • In Xero it’s called Tracking, and in QBO it’s called Class Tracking or Location Tracking.
  • If you need payroll processing and integrated merchant processing, QuickBooks Online will definitely better suit your business’ needs.

Even though Xero doesn’t have its own U.S.-based payroll plan, it works well with major payroll services like ADP and Paychex, as well as the payroll provider Gusto. When you connect Xero to Gusto, your general ledger will be immediately updated every time you run payroll. Alongside our award-winning UK-based telephone support team we offer instant chat, screen sharing and online help features for speedy troubleshooting. On the other side of the spectrum lies Xero, a New Zealand-based software company established in 2006.

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Businesses with inventory items should choose accounting software that can track inventory costs, manage COGS, and monitor inventory units. The A/P section focuses on vendor management, bill management, bill payments, and other payable-related transactions. A/P features include creating vendors and bills, recording purchase orders and converting them to bills, creating service items, and recording full or partial bill payments. Both Xero and QuickBooks have good accounting features, but which one you choose relies on what your business needs and what features or user interfaces you like best. Before making a choice, you should carefully look at each software’s features and think about what your business needs.

Connect to your QuickBooks Online account, which is where you’re going next. This is because Xero was made for accountants and bookkeepers, while QuickBooks was made for small businesses that might not know much about accounting. You can also enhance QuickBooks’ capabilities by utilizing the extensive selection of integrations and add-ons that are offered by the software. Your business operations can be improved in a variety of ways, and the QuickBooks App Store makes it possible to access a wide variety of solutions that can help. You are able to connect with a wide variety of third-party applications by taking use of the large ecosystem of integrations and add-ons that Xero provides. This versatility is especially beneficial for companies on the hunt for specific solutions to supplement their existing methods of financial management.

QuickBooks is slightly more expensive than Xero, however, with that comes more value. Unlimited users and more bells and whistles can make QuickBooks a better choice for a company that needs more features. For the solopreneur or small startup, an affordable per month is an attractive monthly cost. Top Excel Inventory Templates This tier includes the bare bones functions include like the ability to send quotes and 20 invoices as well as enter five bills per month and reconcile banking transactions. This option also allows you to capture bills and receipts with Hubdoc and view a snapshot of short-term cash flow.

Customers prefer being able to click a link in an invoice and pay directly, but you’ll spend more time setting up recurring invoices. Businesses that have to make decisions about continuing relationships with customers will appreciate its in-depth reports. Inventory in QuickBooks Online is tracked by prices, images and categories.

What differentiates Xero is its fixed asset manager, which calculates the depreciation of your machinery. It allows you to claim the proper gain or loss when you dispose of the asset. Plus, all your QuickBooks Time data syncs to your QuickBooks account in real-time so your data is always accurate. Your trips are then stored in one location for you to see your detailed mileage reporting and tax savings estimates at any time. Plus, Xero Projects allows you to get started by quickly setting up a project.

For more than two decades, QuickBooks has maintained its position as the leading provider of small business accounting software. With a market share of over 80 percent in the United States, QuickBooks’s functionalities are well-known to most accountants and bookkeepers. Like its competitors, QuickBooks delivers comprehensive double-entry accounting and reporting features. 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. Choosing the right accounting software plays a significant role in managing your business’s finances.

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