Xero vs QuickBooks: Online Accounting Showdown


quickbooks online vs xero

All Xero pricing plans include 24/7 online customer support; you can cancel with one month’s notice. QuickBooks is a great bookkeeping solution for freelancers, small to medium businesses, and companies that want a full product suite. QuickBooks has a more complex interface with a higher learning curve best suited to those with accounting experience or who are willing to hire an experienced accountant. Most bookkeepers are familiar with QuickBooks software, so it’s easy to find someone to assist with your accounting needs. QuickBooks Online is undoubtedly the most recognizable name in accounting software, but there are many other options for small businesses to consider.

Both Xero and QBO let you customize invoices, add your preferred colors and logo, and change up what a customer sees on their invoice. As a whole, users tend to prefer the visual interface and workflow processes in Xero. Xero also offers more customization in the area of what you can add to or omit from your invoices. Also, Xero allows you to apply a certain invoice template to a customer, so that all invoices that go to that customer have the same format.

  1. It also offers Payroll, but this service is an additional fee starting at $45 to $125 per month.
  2. Additionally, you can create explicit rules to help QuickBooks correctly classify transactions automatically.
  3. 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.
  4. Other shared features include recurring invoices, one-click client payments and mobile invoicing.
  5. Xero uses a very structured setup process, which is great for those who like to have everything in place prior to starting work.

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. Unlike QuickBooks, Xero supports unlimited users and organizations for all accounts. It also offers a 30-day free trial so you can test drive the software before committing to a paid plan. FreshBooks is one such option that has gained popularity in recent years. It’s designed specifically for small businesses and offers invoicing, time tracking and expense management.

We also like that you can use Xero to set recurring bills, generate billing reports, and store and organize all your bills. This makes the tool as great for payment as for understanding your cash outflows. Plus, you get bill pay tools no matter which package you choose, although you can only pay five bills per month with the Early plan.

On top of that, you can only convert quotes, not estimates, to invoices in Xero. This disappointed us, but not as much as the narrow client payment options available. You can only accept payments via card or direct debit with Xero, boxing out clients who prefer newer technologies.

Customer support

While the vocabulary may vary between the two products, they both offer electronic banking, excellent invoicing, payment acceptance, and bill management capabilities. In terms of the accounting features that most businesses need, Xero and QuickBooks Online are both comprehensive tools that tick most boxes. But their approaches are different, and they each have different pros and cons. A cloud accounting tool is one of the most powerful contributors to the day-to-day running of a company. With a system like Xero or QuickBooks Online, you can enjoy a crystal-clear view of your accounting, maximize tax deductions, and even stay on top of projects and time tracking.

quickbooks online vs xero

You can import data such as customers into Xero, but you’ll have to download the CSV file template in Xero in order to import the data correctly. QuickBooks is Intuit’s general accounting software, while QuickBooks Online (QBO) is specifically the cloud-based service. For QBO, you pay a monthly subscription rather than an upfront fee, https://accountingcoaching.online/ 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. If you’re in the market for accounting software, you might be feeling overwhelmed by all the options out there.

Our first-hand experience, guided by our internal case study, helps us understand how the different products compare with each other and how they work in real-world scenarios. Xero’s invoice entry screen, seen above, is clean and uncluttered with easy look-up options available for most fields. Once the invoice is completed, you can send it via email with online bill payment options included in the email.

Should your organization use QuickBooks or Xero?

On top of that, we were disappointed that Xero’s expense-tracking tools are only available with its costliest pricing package. This is the exact opposite of QuickBooks, which makes these tools available to all customers. All QuickBooks pricing how to increase the par value of a stock packages include automatic expense importing and categorization. You can also take photos of receipts and upload them from the mobile app. QuickBooks will automatically match receipts to recorded expenses or generate new expenses accordingly.

quickbooks online vs xero

Some business models lead to a strong preference for one over the other. First-time implementers can quickly get started and scale up as their business grows. Both apps let you match transactions created in-app to transactions in your automatic bank feed.

How much does QuickBooks training cost?

Its inventory management reports will show you how well different items are performing and which ones are the most profitable. And you can also easily add inventory Items to quotes, invoices and purchase orders to make billing easy. If you upgrade to at least the Essentials plan from QuickBooks, you can enter employee time by client or project and automatically add that time to invoices.

Results are displayed in a beautiful and intuitive way, grouped how you need it, (whether by category, customer, vendor, or time) so that you can see what’s going on at a glance. Time periods on reports go from earliest first and move forward in time. Plus, you can create reports based on customized tags so that you can see information for individual locations, product lines, or sales channels.

Integration and support

It’s a great way to know how much money you currently owe vendors and how much you can expect to owe in the future. While both are very similar, these two products have exclusive benefits that set them apart. In this guide, we will explore the key differences and declare our respective winners in each category. QuickBooks Online’s customer support is better than Xero’s since you can interact with an agent through a phone call. You can’t initiate a call, but you can submit a ticket and wait for an agent to call you. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.

How the Products Stack Up

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 invoices option in Xero displays a nice summary view of all invoices and their current status. Xero’s Early plan, recommended for self-employed people or brand-new businesses, allows 20 invoices per year. If you only send out an invoice or two each month, the Early plan is an affordable option at $13 per month. Otherwise, you’ll have to bump up your subscription or consider QuickBooks Online plans. Can support larger small businesses with dozens of employees; all three plans include an unlimited number of users.

 

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