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Is Xero a more superior option than QuickBooks?

The search for the appropriate business accounting software can be a time-consuming process. You will need to determine what functions are necessary, how much money you have available, and, of course, compare the various software packages that are available.

If you’re already in the middle of this process, you’ve undoubtedly already become familiar with Xero accounting and QuickBooks Online, which are two of the most popular accounting solutions designed for small businesses.

Both Xero and QuickBooks Online are web-based accounting software platforms, and both are renowned for their extensive feature sets, flexibility, and user-friendliness. Xero and QuickBooks Online are comparable in many respects.

Despite these parallels, you may be curious about the differences between Xero and QuickBooks Online.

What are the key distinctions between the two? Which platform is most suited to your company’s needs?

This comparison of Xero and QuickBooks Online is provided for your convenience.

We will begin by providing an overview of each of these accounting software solutions, during which we will discuss both their features and their pricing, then we will investigate the ways in which Xero and QuickBooks Online are dissimilar, and finally, we will highlight the aspects of each of these platforms that set them apart from one another.

An accounting tool that is hosted in the cloud has the potential to be one of the most influential contributors to the day-to-day operations of your organisation.

You may get a crystal-clear perspective of your accounting, stay on top of projects and time tracking, and maximise tax deductions using a system such as Xero or QuickBooks Online.

Both Xero and QuickBooks Online are extensive tools that are likely to meet your accounting needs because both of these programmes include the capabilities that are necessary for the majority of firms. However, their strategies are distinctive, and each of them possesses a unique set of strengths.

Getting started with Xero and QuickBooks Online: What You Need to Know

In 2006, Xero was established in New Zealand, and since then, the company has worked to solidify its position as one of the best accounting solutions available on the market.

“Beautiful business” is the company’s tagline, and it accurately conveys the most important aspect of Xero, which is that the software can make accounting both simple and pleasurable.

Xero is created to assist their customers in doing better in their businesses by providing accounting solutions that are simple to use, yet strong. Xero is extremely user-friendly, simple, and powerful.

“Smarter business tools for the world’s hardest workers” is the tagline for QuickBooks Online, the industry-leading accounting software developed and distributed by Intuit. Using their cloud-based system, businesses are able to automate a significant portion of the routine duties and procedures that make up their operations.

This includes tracking projects, handling bills, and even automatically tracking kilometres with a smartphone.

What sets QuickBooks and QuickBooks Online apart from one another? The standard accounting software offered by Intuit is referred to as QuickBooks, whereas the cloud-based service offered by Intuit is referred to as QuickBooks Online (QBO).

With Quick Books Online (QBO), rather than paying a one-time cost, you pay a monthly subscription, and Intuit is responsible for providing all software fixes and upgrades. In this post, we are going to refer to QuickBooks Online quite a bit because we believe that this is the version of QuickBooks that you will end up using rather than the desktop version that Intuit offers.

Since Xero and QuickBooks Online are designed for smaller to medium-sized companies, it may be difficult for larger companies to find a solution that satisfies all of their needs if they have more sophisticated requirements. However, there is a lot to like about Xero and QuickBooks for the vast majority of businesses, including agencies, retail establishments, and startups.

Our conclusion is presented below, along with a comparison of the prices, feature sets, accountant preferences, reporting, ease of use, integrations, and user evaluations of each option.

Cost

The Early plan is Xero’s most fundamental offering, and while it only costs $9 per month, the feature set is extremely restricted. You are only allowed to send five bills and quotes, enter five bills, and reconcile two bank transactions at a time. This is not going to be sufficient for the vast majority of companies.

Their plan with a pricing point in the middle, called Growing, is ideal for most small enterprises. For the low, low price of $30 per month, you can send invoices and bids, enter bills, and reconcile bank transactions.

To access all of Xero’s features, you will need to upgrade to the most expensive plan (Established). You get everything included in the Growing plan in addition to multi-currency capabilities, expenses (to capture and manage claims), and projects for an additional $60 per month (to track project time and costs).

Pricing begins at $39 per month for the standard plan plus $6 per month for each employee if you want access to Gusto’s full-service payroll (which is available in all 50 states for customers in the United States).

The Simple Start plan is the most basic one offered by QBO, and it costs $20 per month.

This comes with significantly more capability than Xero’s most basic plan, including all of the fundamentals of monitoring income and expenses, recording and organising receipts, issuing invoices, and receiving payments.

Additionally, you will have access to fundamental reporting. The fact that the QBO Simple Start plan is only accessible to a single user is the plan’s primary drawback. In addition, you are unable to manage your time or your bills.

The Essentials plan is $35 a month and includes all of the features listed above as well as up to three users, time tracking, and the ability to manage bills.

The majority of businesses will select this option. As is the case with most other cloud-based accounting systems, the most expensive tier includes all the bells and whistles: Plus, for a cost of $60 per month. You can keep tabs on inventories, manage up to 1099 contractors, and take advantage of QBO’s most recent addition, which is the ability to monitor project profitability.

Self-service payroll costs $35 per month plus $4 per employee per month, while full-service payroll costs $80 per month plus $4 per employee per month. Both of these add-ons are included with all plans at a discounted rate of 50%. In addition, receipt capture, knowledgeable support, and pre-built interfaces are all included with every subscription.

If you need to keep tabs on your earnings, costs, invoices, and hours worked, you’ll probably need to pay $35 per month for QBO or $60 per month for Xero. Both of these companies’ most expensive plans, which cost $60 per month, give you access to functionalities that are comparable to one another.

Xero is a Cloud-Based Accounting Software

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Beginning with the Xero accounting software, Xero provides you with the chance to select from their three available plan options, which are referred to as Early, Growing, and Established, respectively. You may anticipate that Xero will give you the whole set of accounting tools and functionality, which includes the following items:

  • The linkages between banks and the reconciliation
  • Billing, pricing estimates, and invoices
  • Users with no limits
  • Administration and control of the inventory
  • Orders placed for purchase
  • Sales tax management
  • The dashboard as well as the reporting
  • Organizing your contacts, creating smart lists, and storing your files
  • Administration of Fixed Assets
  • Accept payments made online with the integration of a payment processor.
  • Free mobile app
  • Collaboration with Gusto on payroll matters
  • Integrate with over 700 different platforms provided by third parties.
  • Support for online customers around the clock

Quickbooks Online Accounting Software

Having established what the Xero accounting plans have to offer your company in terms of both functionality and pricing, let’s continue our comparison of Xero and QuickBooks Online by going into detail about QuickBooks.

Simple Start, Essentials, Plus, and Advanced are the names of the different subscription tiers that are available through QuickBooks Online. This is one of the most obvious and straightforward ways in which QuickBooks Online is distinguished from Xero.

In addition, whereas the differences between the plans of Xero are primarily determined by the number of invoices, bills, and bank transactions, the differences between the plans of QuickBooks Online are more analogous to those that exist between the Xero Growing and Xero Established tiers of service.

Each level of the QuickBooks Online plans comes with new features and capabilities, and the price of those plans increases along with them (that were not available in the previous level).

Having said this, though, you can anticipate some features to be included with your QuickBooks Online software regardless of the plan that you select, just like with Xero. These features include the following:

  • Keeping tabs on one’s earnings and expenditures
  • The billing process and cost estimates
  • Capability to take payments from customers
  • Reporting on the basics
  • Establishing a connection to the bank account and doing reconciliation
  • Instruments for organising taxes
  • Receipt capture and organisation
  • Provide your accountant with access.
  • Free mobile app
  • Integration with third-party systems and other QuickBooks applications
  • Support for customers via the phone.

What Xero can do for you

The functionality of Xero is organised into five primary sections, which are the Dashboard, Business, Accounting, Projects, and Contacts. The accounting dashboard provided by Xero provides a beautiful picture of your company, including bank balances, invoices owing, and total cash coming into and going out of your company. In addition, the dashboard is fully configurable.

You’ll discover products and services, purchase orders, invoices, and other business-related documents in the category labelled “Business.” The invoices option in Xero provides a useful overview view of all bills as well as the status of each invoice at the moment.

The invoice entry screen in Xero, which can be seen above, is neat and uncomplicated, and it provides simple look-up options for the majority of its fields. After you have finished creating the invoice, you may send it to the client through email, and the email should include options for paying the bill online.

If the payment was made online, Xero will immediately apply for the payment once it is received; otherwise, you can handle the payment during your regular bank reconciliation procedure. Xero will automatically apply for the payment if it was paid online.

Within Xero’s Accounting section, you’ll handle all of your banking transactions, as well as manage your chart of accounts and financial statements. This section is also where you’ll view and print your company’s tax returns. Within the Projects section, you have the ability to manage any projects and keep track of the amount of time spent on them using the time tracking feature.

Through the use of the Contacts category, you are able to centrally manage all of your contacts, including customers, suppliers, and contractors. The reporting functionality in Xero is robust, and users have access to a wide range of financial statements and management reports.

Xero provides its users with the ability to do typical operations using a mobile app that is compatible with both iOS and Android devices. These tasks include the maintenance of receipts and contacts, the reconciliation of bank accounts, and the production of invoices.

The benefits that QuickBooks Online provides

QuickBooks Online, much like Xero, provides users with common services such as internet banking, a robust invoicing capacity, bill administration, and payment acceptance. Nevertheless, it separates them into a wider variety of categories as opposed to classifying them under a single umbrella heading.

Your personal choice can play a part in determining which format you like, but in general, a primary navigation page should be as self-explanatory as possible to make it simpler for new users to navigate their way around.

QuickBooks Online makes it easy to enter an invoice, and it also gives users the option of adding a customer’s credit card or bank account information to their QuickBooks Online customer profile. Because of this handy function, you are able to promptly conduct an online payment for that particular customer.

You also have the option with QuickBooks Online to apply for client payments automatically after they have been placed, or you can choose to leave that decision up to the user. You are able to add invoices from vendors and get them prepared for payment by using the Expense category. Quickbooks Online gives you the ability to manage your customers, vendors, and staff all inside the same platform, and it also gives you access to a payroll option provided by Intuit.

The Report Center in QuickBooks Online provides a centralised site for the processing of reports, which include all regular financial statements in addition to a robust range of management reports. These reports may be accessed from anywhere in the programme.

Struggling to keep up with your bookkeeping? We’re here to help. Bookkept are qualified accountants and business advisors who can take care of all your accounting and business advisory needs, so you can focus on what you’re good at – running your business.

Contact us today at (03) 8568 3606 or [email protected] for a consultation!

Comparison of Xero and QuickBooks Online

QuickBooks and Xero are the two most well-known names in cloud accounting software respectively.

But when you have two extremely capable software solutions to choose from, both of which offer accounting services that are comparable to one another and almost the same set of features, how can you tell which one is the superior option? That is the question that we want to have answered here today.

QuickBooks Online was launched in 2004, two years before Xero, giving it an early advantage in the accounting market. It is simple to understand why accountants and bookkeepers regard this software as one of the industry’s best thanks to its extensive accounting capabilities, elegant invoices, more than 550 integrations, and a loan tool.

Xero is a powerful accounting solution that is competitive with QuickBooks in terms of both its capabilities and its widespread adoption. It has been on the market since 2006 and features robust accounting, access for an unlimited number of users, over 700 integrations, and an astounding array of features.

At Bookkept, our mission is to assist you in locating the most suitable software to meet the requirements of your small business. We’ve conducted in-depth research and evaluations of both goods so that you can make an informed choice. We’ll evaluate Xero and QuickBooks Online (QBO) in terms of their capabilities, pricing, customer service, reputation, and other factors so that you don’t have to.

What accountants think about Xero

Accountants sing Xero’s praises for its user-friendliness, the ease with which it can process payroll, and its automatic bank feeds.

When it comes time to prepare your tax return at the end of the year, they have everything at their disposal that is required to get started. Accountants will also find it simple to correct user errors in Xero, and the software comes equipped with the appropriate audit trails and safety checks.

Using the one integrated reporting solution that Xero provides, as of the year 2017, you can additionally generate a Statement of Cash Flows that complies with GAAP for the reporting needs of your clients.

If you live in the United States, the major criticism that your accountant might have is that they do not have enough expertise working with Xero. Because QuickBooks is the most popular accounting software in the United States, it is likely that they already have experience with it. It is more likely that accountants in the United Kingdom and New Zealand will advise you to use Xero because it is more widespread in those countries.

It’s likely that your accountant will be enthusiastic about QuickBooks Online.

QuickBooks has been compliant with GAAP and IAS for a longer period of time than Xero has, and it is also the accounting software that many accountants choose to use. In addition to this, it dominates the market in a number of different regions. In the grand scheme of things, it’s highly rare that your accountant will run across any problems while using QuickBooks.

It ends in a tie. QuickBooks and Xero are both well-known and widely used accounting software programmes. The location of your business is probably going to be the deciding factor for your accountant more so than any other factor.

Adoption as well as evaluations

On Capterra, 2808 people have given QuickBooks Online a rating of 4 out of 5, whilst Xero has received an average rating of 4.5 from 1570 users.

The undisputed frontrunner in the market for the long time, QuickBooks Online

QuickBooks states on their website that 98 per cent of clients think that their solution helps them operate their business more easily, and we can see why they would say that: there is a reason that QBO has built up such a strong reputation.

QuickBooks Online has been available to customers for a longer period of time than Xero has, has a very robust feature set, and is favoured by accountants worldwide, particularly in the United States market, which QBO has dominated. In 2015, it was estimated that QBO held an 80 per cent share of the market. According to QBO, consumers save an average of $3,534 in taxes each year using their software.

Xero, stands out thanks to its large community of customer advocates

Xero has a powerful value offer to compete with QuickBooks Online, and that is the fact that its clients adore the software. Despite having less reviews overall, Xero regularly receives higher ratings on average than its competitor, QBO.

Xero is significantly more popular in the realm of startups than QuickBooks is. This can be attributed to the company’s youthful brand image as well as its emphasis on user-friendliness.

Reports

The three primary financial statements that are included in Xero and QuickBooks Online are the profit and loss statement, the balance sheet, and the cash flow statement.

These statements allow you to view information pertaining to many elements of your business, and they may be customised. Adding columns, altering account groups, and displaying time periods next to one another are all quite simple to do.

Xero, in contrast to QuickBooks Online, provides you with an equity statement, which is helpful if your company has multiple investors in it.

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It details the profits or losses that were retained in the business, as well as the owners’ investments and equity withdrawals in the company.

It will quantify your worries in the event that you are concerned that one of the owners may be taking too much money out of the business.

In addition to the primary financial statements, simple accounts receivable and accounts payable ageing reports keep track of who owes you money and what you owe them by grouping the amounts into common time buckets that are past due.

Compared to Xero, QuickBooks Online offers more in-depth coverage of accounts receivable.

QuickBooks Online provides users with a variety of reports, including those that detail profit and loss by the customer, a comparison of projections generated for a customer vs sales to that client, as well as collection reports.

This is information that should not be overlooked by companies that record a large number of accounts receivable on their financial statements.

Despite the fact that QuickBooks Online incorporates payroll processing, the software only provides reports on total wages and payroll taxes, worker’s compensation, and employee details. Xero provides a far larger number of reports, and it also has built-in human resources features.

These features include time-off balances and requests, wage garnishments, and other features.

Xero provides all of the necessary reports for firms that aren’t as complex as others. Instead of using QuickBooks Online, which has a more complicated process, we prefer to use the service because it allows us to change reports by dragging and dropping data.

Therefore, the winner in this area is QuickBooks Online because of the extensive range and practicality of the reports it provides.

Whether you choose Xero or QuickBooks Online, at the end of the day, you’ll be using a top accounting software platform that will enable you to effectively manage and streamline your accounting procedures. This is the case regardless of which option you choose.

In light of the aforementioned information, it is challenging to determine which of these two solutions is objectively superior to the other when comparing QuickBooks Online vs Xero as accounting software options.

Instead, whether accounting software is better than Xero vs QuickBooks Online comes down to the specifics of your company, including the capabilities you require, the size of your budget, and the features that are most important to you.

As we have discussed, the similarities between Xero and QuickBooks Online, including their overall functionality, reasonable pricing, usability, mobile access, and other features, indicate that these platforms have the potential to meet the needs of a wide range of small businesses in an effective manner.

It is therefore up to you to evaluate how the differences between them will impact your company and which alternative will serve you and your goals in the best way possible.

However, it is important to note that because to the complexity of the comparison between Xero accounting and QuickBooks, you may find it necessary to test out both of these programmes on your own before settling on a choice permanently.

You are in luck because both Xero and QuickBooks Online provide free trials of their software for a period of thirty days. During this time, you may get a feel for the software and assess whether or not it will meet the requirements of your company.

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