We also recommend Xero if you’re seeking project profitability data alongside superior bill pay and expense management features. We found the platform’s profitability tools to be highly user-friendly. Your team’s tracked time and expenses power your profitability reports and give you all the necessary information to adjust inputs and minimize costs. This frees up the cash you need to make the timely bulk payments that Xero facilitates. Customer payments are remitted to the merchant’s designated bank account. Service or project-based businesses should choose accounting software that can track project costs, revenues, and profits.
This influences which products we write about and where and how the product appears on a page. Katherine Haan, MBA is a former financial advisor-turned-writer and business coach. For over a decade, she’s helped small business owners make money online. When she’s not trying out the latest tech or travel blogging with her family, you can find her curling up with a good novel. QuickBooks and Xero both have good support and training options, but QuickBooks has phone support while Xero does not, earning it a research score of 4.7 – nearly double Xero’s 2.4/5. In sharp contrast with QuickBooks’ extensive language support, Xero does not offer support for languages other than English.
Should your organization use Quickbooks or Xero?
Moreover, Xero’s tiered pricing incorporates a range of features that make it particularly suitable for growing businesses. Choosing the right accounting software plays a significant role in managing your business’s finances. Accounting software helps you complete bookkeeping tasks, track expenses and revenue, and send invoices to your customers. Two of the best small business accounting software programs are QuickBooks and Xero, which both command strong followings among accountants and business owners.
- The Xero mobile app is for Android and iOS devices is free when you sign up for a subscription.
- What sets Xero apart is its emphasis on simplifying accounting concepts for individuals who may be unfamiliar with financial jargon.
- All three of these offer the ability to scale their accounting for larger businesses and both Xero and QuickBooks offer specific training for accountants.
- You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication.
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.
To help you determine how both tools stack up, here is a head-to-head comparison chart featuring pricing and other capabilities. Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content. She is a former Google Tech Entrepreneur and she holds an MSc in International Marketing from Edinburgh Napier University. It’s worth noting that QuickBooks uses a first-party payment processor, which means that the money goes through QuickBooks, while Xero uses third-party processors, like PayPal or Stripe. Neither of these is better than the other, but it pays to be aware of the differences.
QuickBooks is also better for businesses that need to track inventory, as it has built-in inventory management features. Xero also has inventory management, but it’s not one of its core functions. 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.
Xero vs QuickBooks: general Overview of Xero and QuickBooks (QuickBooks Online) accounting
For example, both mid-level plans are similar in price and scope, with the Growing plan in Xero costing you $32, while QuickBooks Online’s Plus plan is $35. 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. Both QuickBooks and Xero are excellent accounting systems for small businesses, and customer reviews reflect how well the software providers understand their audiences. All your data is automatically backed up to the cloud and synced across all your devices, so any changes made on the move will be updated when you next login in your laptop or desktop. This includes snapping pictures of your receipts and uploading them via your phone. Support network refers to a community of software users that can extend professional help to businesses.
You have a growing startup
In this case, we give the edge to Xero because its entry-level Early plan includes more features than QuickBooks’ Self-Employed plan at a lower price point. However, QuickBooks’ second-tier Simple Start plan packs more tools than Xero’s second-tier Growing plan. You can track business expenses easily with QuickBooks to always know where the money is going. Once you connect QuickBooks to your credit cards, bank accounts, PayPal, Square, and more, it will import your expenses and categorize them for you. You can save photos of the receipts using the mobile app and stay updated to never miss any tax deductions.
In addition, Xero has a far more user-friendly interface than QuickBooks, so its ease of use makes it the perfect choice for the self-employed and those with less accounting experience. 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. Pricing levels for Xero and QuickBooks Online are very similar, with both applications offering three pricing plans.
With Xero inventory management (Figure B), users can track up to 4,000 finished items, inventory levels, set reorder points and monitor stock on hand. Although Xero’s inventory management isn’t as robust as that of QuickBooks, it’s still a powerful tool for managing business inventory. With QuickBooks’ inventory tracking tool, users can create purchase orders and manage vendors. It also allows businesses to track product inventory with three levels of location tracking (for instance, row, shelf, bin; section, area, pallet) as well as the cost of goods. If snapping photos of receipts to claim expenses on the go is a key mobile feature you’d like to have, regardless of plan level, QuickBooks Online might be a better fit. If you’re in the market for accounting software, you might be feeling overwhelmed by all the options out there.
Otherwise, you’ll have to bump up your subscription or consider QuickBooks Online plans. Both services do offer an app marketplace, for both in-house mobile apps and integrations or extensions offered by third-party services. Xero offers more integrations new rules for business combinations intangibles and goodwill accounting overall, but both are very comprehensive. Granted, this doesn’t mean Xero is the most cost-effective option for your business needs. Here’s how each accounting software vendor breaks down their services, so you can see how they compare.
Forbes Advisor compared Xero vs. QuickBooks when it comes to the key features, pricing, customer service and reviews to help you decide which is right for your business. QuickBooks makes its state-of-the-art expense-tracking features available to all customers. Although Xero’s tools are nearly as high in quality, only users who pay for the vendor’s most expensive plan can access them. Plus, only QuickBooks includes cash flow statements in its expense-tracking suite.
It’s also vital for tracking cash flow, invoicing clients and paying vendors. Plans start at $13 per month for up to 20 invoices, five bills, bank account reconciliation, receipt capture and short-term cash flow snapshots. Its $70-per-month plan also includes multiple currencies, project tracking, in-depth analytics and employee expense claims.