25 Oct Xero vs QuickBooks Online: Features Comparison, Pros, Cons

We’ve taken the non-promotional pricing into consideration for the purposes of this article. If you’re a freelancer or solopreneur and don’t have complex financial needs, this might work best for you. The key features you need will vary depending on the systems and processes of your business. BigCommerce vs Magento ⁠— here is the ultimate guide to comparing these two great platforms to help you determine the best for your business.

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.

You can’t initiate a call, but you can submit a ticket and wait for an agent to call you. All plans include 24/7 live chat support; phone support is available 5 a.m. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page.

Xero offers 24/7 email support, comprehensive online help resources, and a vibrant user community. Their support team is known for being responsive and knowledgeable, helping users navigate any challenges. Businesses with inventory items should choose accounting software that can track inventory costs, manage COGS, and monitor inventory units. The A/P section What is the difference between a ledger and a trial balance 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. QuickBooks Live doesn’t offer tax filing or payroll services, unlike Bookkeeper360.

Through Wise, you can reduce the hefty fees most banks charge on international transactions – it’s simply one less thing to worry about and you even can earn a return on the money you hold. If you’re a SaaS or subscription business owner — or if you’re a traditional business looking to adopt a subscription business model — Chargebee can help. Another difference is that Xero requires you to upload bank statements to complete reconciliation. QuickBooks Online lets you perform bank reconciliation without importing your bank activity. QBO also has a Reconcile tab that shows you a single list of transactions. You can go through and check off each transaction that matches up with an expense from that month’s bank statement.

Who should use QuickBooks Online?

They both have a robust feature set, an easy-to-use interface, and competitive pricing. In terms of invoicing, QuickBooks Online outperforms Xero with its robust features and customization options. One of the standout features of QuickBooks Online is its ability to automatically calculate sales tax rates based on the customer’s address.

• 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.
• They also have a full-service managed payroll solution for $40 per month + $4 per employee per month.
• Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.
• If you can’t justify the $90-per-month QuickBooks Online Plus plan, you won’t get inventory management, because QuickBooks Online’s lower-tier plans don’t come with it.

Xero and QuickBooks Online are two of the most popular accounting software platforms. Here’s our comparison of their pros and cons to help you decide between them. If you need to give accounting access to more than five people, Xero could be the better option for you. 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. Both accounting software products let users invite their accountants by email.

Key features

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. However, with QBO you have several subscription tiers with varying features and add-ons. However, if you just need basic data to monitor your cash flow and profitability, then Xero can be a good option. With Xero, you should need to email customer service or look to online resources to solve the problem. 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.

The software must also have a mobile app to enable users to perform accounting tasks even when away from their laptops or desktops. Of course, the best solution for you depends on your organization’s custom needs and preferences. We recommend trying both tools for free for 30 days before settling for one. If neither tool meets your needs, we welcome you to explore our comprehensive reviews of the best payroll software for small businesses or our top-rated payroll software for enterprises. QuickBooks Online accounting software is a popular choice for small and mid-sized businesses,  but it has drawbacks. Track mileage, send invoices and get a snapshot of your business cash flow with both Xero and QuickBooks.

While Xero’s lowest-tiered plan allows you to send and approve up to 20 invoices, partner apps that initiate transactions can automatically contribute to your limit. Many businesses will find themselves needing to move to the $60 per month plan. At that cost, you should switch to the QuickBooks Essentials Plan, which is the same price and comes with better reporting features and the ability to manage all 1099 contracts. If accepting recurring payments or setting up subscriptions is vital to your business model, you should seriously consider Wave.

Here are the similarities between Xero and QuickBooks Online:

To get a more detailed perspective on Xero, you can read our Xero review, which delves into the platform’s strengths and weaknesses. Additionally, comparing Intuit vs Xero will provide a comprehensive analysis of the key differences between the two accounting software options. Xero and QuickBooks Online are robust accounting software programs and, in our case study, both prove why they’re the leading tools in the industry. They may have almost the same features, but each has its own strengths and drawbacks.

QuickBooks Project tracking capture signatures for project sign-offs as well! Once you’re done working on a project, capture a signature effortlessly using the app. 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. Next, think about how many people will need QuickBooks or Xero access at your company. For example, QuickBooks Desktop highest-tiered plan allows up to 40 users.

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Because Xero’s accounting features are really easy to use, these resources will be enough if and when something goes wrong. You can use both Xero and QuickBooks Online for project accounting, but Xero may be better if you want a more precise choice to track your profitability. In contrast to QuickBooks Online, it allows you to compare estimated and actual project costs, which is essential for budgeting.

The only con is that it takes some time to learn how to use their extensive reporting features. You might come across both QuickBooks desktop⁵ and QuickBooks Online. In this guide we’ll mainly look at QuickBooks Online – which is the cloud based version of QuickBooks. You can also choose the desktop version, which you can install on your desktop, if you’d prefer. This product is recommended for mid sized and large businesses, including manufacturers and other companies with large inventory needs.

Xero Plans and Pricing

QuickBooks Online also gives you the option to have customer payments applied automatically once they’re deposited, or leave that option to the user. For example, Xero offers an extensive suite of features specifically designed for contractors, such as job costing tools and time tracking, whereas QBO’s offerings are not as robust in this area. Overall, QuickBooks and Xero are both great options for accounting software for contractors with attractive features and pricing plans.

This feature helps businesses maintain healthy cash flow and improve overall invoicing efficiency. Xero lets you send invoices via email that includes online payment options. You can connect invoices, expenses, and transactions to individual projects, pull reports to see the project’s profitability and identify invoices that need to be sent and non-billable time. 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, CRM, and time tracking.

Starting at $200 per month, QuickBooks Online will bring your business financials up to date and keep your books accurate. Every bookkeeper is a professional who is certified in using QuickBooks. The bookkeepers work across a variety of industries and during a consultation, QuickBooks Online will try to match you with a bookkeeper who knows your industry well. You will need to be able to speak to someone to get the help you need and the reassurance that the issue is being fixed. Here’s everything you need to know about PayPal Singapore business account. And then here’s what you’ll pay per month if you choose QuickBooks.

Do you have more than five users?

You can access all your accounting documents directly through Katana. The cloud-based system is a good fit for small businesses, and, crucially, it is also great for growing businesses as the application is designed to grow with you. Xero’s main value lies in the customizable dashboard and the Xero Marketplace. There are 50 reports and, while we found that reports didn’t generate on demand when we tested the platform, customers have not reported this as a consistent issue. For a more in-depth overview of Xero’s features, check out the full Xero review.