Xero vs. QuickBooks Online: An overview
The search for the right business accounting software can be extensive—deciding what features you need, what your budget looks like, and of course, comparing the different options on the market.
You’ve probably come across two of the most popular accounting solutions for small businesses: Xero accounting and QuickBooks Online.
We’ll give an overview of each of these accounting solutions, discussing both their features and pricing, explore how Xero and QuickBooks Online differ, and highlight the areas where each of these platforms stands out.
Who is Xero for?
Xero is an excellent accounting software option for start-ups and small business owners, and it’s particularly well suited for business owners who know absolutely nothing about accounting but still need to properly manage their finances.
The Xero accounting interface is clean and uncluttered, and new users have access to a demo company where they can manipulate data without worrying about entering or deleting important information.
Who is QuickBooks Online for?
QuickBooks Online, an offshoot of the popular QuickBooks Desktop application, is a good fit for small and growing businesses.
Originally designed for small businesses, when compared to the desktop version, QuickBooks Online now offers growing businesses the option to use an application they won’t outgrow in a short amount of time.
Xero vs. QuickBooks Online: Features
Xero and QuickBooks Online both offer a ton of features all designed for small business owners.
While the vocabulary may vary between the two products, they both offer electronic banking, excellent invoicing, payment acceptance, and bill management capabilities.
What Xero offers
Xero places its features into five main categories: Dashboard, Business, Accounting, Projects, and Contacts.
Xero’s accounting dashboard offers a nice summary of your business, including bank balances, invoices owed, and total cash in and out of your business, with the dashboard completely customizable.
The Business category is where you’ll find invoicing, bills to pay, purchase orders, and products and services. The invoices option in Xero displays a nice summary view of all invoices and their status.
The Accounting category in Xero is where you’ll handle all of your banking transactions, as well as manage your chart of accounts and financial statements.
The Projects category lets you manage any projects and record time spent using the time tracking feature.
The Contacts category lets you manage all contacts, from customers to suppliers to contractors, from one location. Reporting in Xero is solid, with a variety of financial statements and management reports available.
A mobile app for both iOS and Android devices is available in Xero, offering the ability to handle common tasks such as receipt management, contact management, bank reconciliation, and invoice creation.
What QuickBooks Online offers
Like Xero, QuickBooks Online offers standard features like electronic banking, solid invoicing capability, bill management, and payment acceptance, but it breaks them down into more specific categories rather than lumping them together into one category.
User preference can play a role in which style you prefer, but generally, the more self-explanatory a central navigation screen is, the easier it is for new users to find their way around.
Entering an invoice in QuickBooks Online is simple, and it offers the ability to add a credit card or bank account number to a customer’s account – a nice feature that allows you to immediately process an online payment for that customer.
QuickBooks Online also gives you the option to have customer payments applied automatically once they’re deposited or leave that option to the user. The Expense category lets you add vendor invoices and get them ready for payment, and QuickBooks Online lets you manage customers, vendors, and employees in the system, with a payroll option available through Intuit.
The Report Centre in QuickBooks Online offers a central location to process reports, which include all standard financial statements as well as a healthy selection of management reports.
Xero vs. QuickBooks Online: Support
While both accounting tools offer a ton of help articles, knowledge bases, and robust user communities, who will win in the Xero, QuickBooks Online comparison in the battle of support personnel?
What Xero offers
Here is the list of Xero’s customer service support offerings:
· Email support
· User guides
· Knowledgebase
· Help articles
· In-product help
· User community
· Product training
Xero's accounting functionalities are simple to navigate, so it’s likely these resources will be sufficient if and when something goes wrong.
What QuickBooks offers
Here are the support options offered by QuickBooks Online:
· In-product help
· User community
· Knowledge base
· Product training
· Help articles
· Connect with a support agent through email
· Connect with a support agent through messaging
· Connect with a support agent through a call back
Xero vs. QuickBooks Online: Pricing
Pricing levels for Xero and QuickBooks Online are similar, with both applications offering three pricing plans.
What Xero offers
Xero offers three pricing levels:
1. Starter— £10/user/month
2. Growing — £24/user/month
3. Established — £30/user/month
A 50% discount will be applied to the above prices for the first two months.
Xero’s Early plan offers limited capability (send five invoices, enter five bills, reconcile limited bank transactions), while the Growing plan includes unlimited invoicing and bill processing, along with unlimited bank transactions.
Features found only in the Established plan include multicurrency capability, project tracking, and expense management capability.
What QuickBooks offers
QuickBooks Online also offers three pricing plans:
1. Simple Start — £12/month for one user
2. Essentials — £20/month for up to five users
3. Plus — £30/month for up to 25 users
Right now Quickbooks Online will apply a 90% discount will be applied to the above prices for the first 4 months.
All QuickBooks Online plans include income and expense tracking, invoicing, payment acceptance, estimates, sales tax tracking, and receipt organization.
Moving up to the more expensive plans will get you features such as inventory, custom user permissions, and accelerated invoicing, with all plans providing the basic functionality your business needs.
Xero vs. QuickBooks Online: Integration with other software
The ability to integrate a software product with other applications can increase its functionality tremendously. Both Xero and QuickBooks Online offer excellent integration with hundreds of apps.
What Xero offers
Xero offers integration with more than 700 apps in a variety of categories, including payment acceptance apps such as Stripe, PayPal, and GoCardless, inventory, payroll, point of dale, e-commerce, and time tracking applications.
What QuickBooks offers
QuickBooks Online offers integration with hundreds of apps, making it great for small business owners. These integrations including PayPal, TSheets, Bill Pay for QuickBooks Online, and Stripe, with apps available for inventory, payroll, and time tracking.
Xero vs. QuickBooks Online: Setup
One of the major differences between Xero and QuickBooks Online is the setup process.
Xero's accounting functions use a very structured setup process that requires eight distinct steps, whereas QuickBooks Online allows users to enter only the bare minimum and get started quickly, adding additional details when they become necessary.
While this, again, can come down to user preference, I like the ability to just jump in and get started.
What Xero offers
Xero uses a very structured setup process, which is great for those who like to have everything in place prior to starting work.
What QuickBooks Online offers
QuickBooks Online's accounting software has a looser setup structure, allowing you to enter the bare minimum and add the rest as you go along.
In Conclusion
QuickBooks Online software is easy to use and offers great mobile apps so you can run your business on the go. QuickBooks is ideal for small businesses.
Xero is ideal for mid- to large-sized businesses, or businesses looking for scalable software that will grow with their company. If you are looking for strong accounting capabilities, Xero won’t let you down.
Be sure to take advantage of the free trials and please reach out with any questions you have along the way.
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