Xero and QuickBooks Online are the biggest names in the online accounting industry. They are among the top-rated cloud-based accounting software programs that can be of great use for any type, and size of businesses. Although both offer exceptional and functional features, there is always a debate on which one wins? Xero Accounting or Quickbooks?
According to me, with just few surface-level variations, the majority of functions they perform related to invoicing, bills payment, and bank reconciliation are quite similar. Hence, the difference basically comes down to the ease and convenience.
First, let us review them separately before analyzing the difference.
Xero is a robust accounting solution that has been around since 2006 and assures absolute mobility, flexibility, and accessibility to its users. It can automate as well as streamline your core accounting and bookkeeping tasks, and related business processes. Xero also offers an impressive feature-set for unlimited users with over 700+ integrations.
QuickBooks Online arrived in the market in 2004, and soon it became the closest rival to Xero in terms of popularity and capability. It comprises advanced accounting features, 550+ integrations, streamlined invoicing, and a lending feature. It can efficiently perform all essential and complex accounting functions for small businesses and freelancers.
Comparison between Xero and QuickBooks Online
Let us compare their features based on few core offerings;
Paying a new bill is simpler in Xero billing and invoicing than in QuickBooks Online. In Xero, you just have to reach the “purchase” option under “accounting” section, and then select the “new bill” option. There are few more lengthy steps involved in QuickBooks billing procedure.
Expenses can be automated in both of them, but QuickBooks Online includes this offer only on the higher plans. It is easier to setup the recurring bills in Xero using the “repeating bill” option available in the accounts menu. In QuickBooks Online, it is far more painful.
Xero surely takes the upper hand when it comes to the payment of the repetitive monthly expenses.
(QuickBooks Online Billing)
Dashboard of QuickBooks Online displays only the expenses paid and not the bills accrued.
It is easier to customize invoices in Xero by uploading a template through the ‘settings’ menu. In QuickBooks online, you have to spend more time in setting colors, company logo, and layout of the invoice.
Xero offers an inventory tracking facility at all subscription levels without charging extra. QuickBooks Online charges additionally for its inventory functions.
Xero’s payment processing requires signing up with an external provider like PayPal or Stripe that assures a security measure ahead. Direct-click option for credit card information available with QuickBooks Online makes it vulnerable and risky to use.
Check the invoice-related comparison chart given below for both the solutions:
Xero provides its users with an equity statement that is useful if there are investors associated with the business. This option is not available in QuickBooks Online.
QuickBooks Online provides only a few reports related to total wages, payroll taxes, employees’ details, and workmen’s compensation. On the other hand, Xero offers far more reports with some built-in human resources functions, like wage garnishments, time-off requests, and balances, etc.
(Reports in Xero)
(Reports in QuickBooks Online)
Xero and QuickBooks Online follow a tier-based pricing model. The basic difference can be observed as Xero restricts pricing at its lowest level, whereas QuickBooks Online enhances cost with any additional feature used.
Let us compare their pricing plan through the table given below:
Compared to QuickBooks Online, Xero has the lowest pricing at the lower level plans.
QuickBooks software assures immense customization and complexities that should be learnt before using. Lack of user-friendliness makes the learning longer and so it creates boredom. On the other hand, Xero software interface is user-friendly with a simpler workflow and clearly labeled functions.
6. Advanced Functions:
Xero software comes with an additional feature of fixed asset functionality to calculate depreciation, disposal schedules, and fixed assets reconciliations. There are no fixed assets modules built-in to the QuickBooks Online software. Hence, everything is handled there manually.
Xero vs. QuickBooks Online at a Glance
With just few minor differences, both Xero and QuickBooks offer great accounting experience. If you are running a small business set-up, then Xero can be your right pick.
As per my analysis, Xero can be the best choice for cloud-based accounting software, especially for smaller businesses. It offers a straightforward interface so that you can get less time to start with. Amazing dashboards and home-screens for all functions help the firms to focus on keeping day-to-day business operations running smoothly.
Overall, Xero and QuickBooks can be the best and the most trusted accounting software solution to manage and streamline your business accounting processes efficiently. It is all about your business size and the tool that you will be comfortable working the most.