Xero and QuickBooks are possibly two of the most renowned online business accounting software used by business ventures in tracking their finance. They are virtually identical and share most of the features with one another, including tax, financial reports, integrated payroll, inventories, and file storage but they have their differences. In this article, you will see the comparison between Xero and QuickBooks in the aspects of the essential features, costs, customer service, and feedback so you can make an informed decision to choose the right accounting software for you.
Content Outline
A Brief Overview Of Xero Vs. QuickBooks
QuickBooks is an online software that is available in desktop version and is perfect for a business that sends recurring accounts tasks to a bookkeeper or an accountant. QuickBooks can only support a maximum of 40 users in the highest-tired package and some plans force every user to pay for their subscription. However, in Xero, there is no restriction on the number of users that can be added. Xero can be considered ideal for businesses that maintain a bookkeeper or accountant team in the internal team.
Another important fact about setting up a small business accounting system is that QuickBooks has a more friendly user interface than Xero. QuickBooks was developed for small businesses that may not have any accounting knowledge and experience, and Xero was developed with accountants and bookkeepers in mind. QuickBooks is also more suitable for businesses with inventory management because it has some integrated inventory tracking tools. As for inventory management, Xero does have it; however, it is not one of the primary services.
Xero could be the better choice for the business that has to track the profitability of the project. Xero provides the users an opportunity to view how much the particular project costs, after which make a comparison with the estimated profits whereas Xero is preferable for businesses that venture into the international market since it supports multiple currencies.
| Xero | QuickBooks | |
|---|---|---|
| Prices Start At | $15 per month (60 percent off for the first four months during current promotion) | $30 per month (50 percent off for the first three months during current promotion) |
| Payroll Integration | $40 per month | $45 to $125 per month |
| Capture and Organize Receipts | Yes | Yes |
| Track Mileage | Yes | Yes |
| Invoicing | Yes | Yes |
| At-a-Glance Cash Flow Snapshot | Yes | Yes |
| Maximum Users | Unlimited | Up to 40 |
Comparison of the software
The pricing of Xero and QuickBooks are almost the same but not for the QuickBooks Desktop. There is no desktop version of Xero. The QuickBooks Desktop plan starts at $349. 99 per year, increases to $804 for the first year to $1,340 per year to renew.
Both software records and organizes the receipts. To enable online document access, Xero provides this service via Hubdoc. Both receipt and document organization are available in QuickBooks, through the mobile application, or the online version.
Xero and QuickBooks both allow you to send invoices, track miles, and see a snapshot of your company’s cash flow. The lowest tier of Xero lets you send and approve up to 20 invoices but partner apps that start transactions will automatically add to your limits. It has no restrictions imposed on the number of invoices in its higher-tiered plans.
Another factor that separates the two software is the number of users permitted to use. While Xero has no restrictions on the number of users, QuickBooks limits it to 40 users maximum with the Enterprise plan. The users have to pay for their plan to use its lower-tiered plan.
For instance, you can have up to three concurrent users when you purchase the Pro Plus Desktop plan, but each user needs to pay for their own account, which costs $349.99 a year. When using the online version, you can have up to 25 users at no extra cost as long as you have the Advanced plan.
Alternative Accounting Software Options
It might be overwhelming because of all the options in the market if you are looking for accounting software. Xero and QuickBooks are popular options, but there are still many other accounting software available in the market today that could also provide great features with a great user experience.
One of the options is FreshBooks which has been taking over the market and was chosen by many. It is developed especially for small businesses and provides features on invoicing, time tracking as well as expense management.
Wave is also another free accounting software that provides invoicing, payroll, double entry, and sales tax. Whether you have a small business and require a simple package or a complex business that requires a more intricate package, then there is an accounting software program that will suit all your needs.
Check out the list of 8 Best Accounting Software in 2024
Conclusion
Xero and QuickBooks are both excellent accounting software for small businesses. Both of them provide a large feature set, an intuitive user interface, and affordable prices. Xero, on the other hand, is a better fit for companies that require online accounting software with unlimited users, while QuickBooks is best suited for those who need desktop accounting software and contract out their accounting work to a bookkeeper or accountant.