Choosing the right accounting software is a critical decision for any business. It affects everything from how you manage cash flow to how you file taxes and track expenses. Two of the most popular accounting platforms on the market are Xero and QuickBooks. Both offer powerful features for small and medium-sized businesses, but they cater to different needs and business types.
While QuickBooks has long been a household name in accounting software, Xero has emerged as a strong competitor, especially for businesses looking for simplicity, automation, and flexibility. But how do you know which one is best for your business? This guide will compare Xero vs QuickBooks in terms of pricing, features, ease of use, reporting, and integrations to help you make an informed decision.
Overview of Xero and QuickBooks
Xero is a cloud-based accounting platform that focuses on automation and real-time tracking of cash flow. It’s known for its user-friendly interface and strong support for third-party integrations. Xero is often praised by startups, freelancers, and small business owners who need a modern, intuitive platform.
QuickBooks is one of the most well-known and widely used accounting software solutions. It offers both a desktop version (QuickBooks Desktop) and a cloud-based version (QuickBooks Online). QuickBooks is known for its comprehensive features, including payroll, invoicing, expense tracking, and tax filing. It is popular among small, medium, and even large enterprises.
While both platforms provide essential accounting tools, their differences lie in features, usability, and price. Below, we’ll break down the key areas where they differ to help you choose the right platform.
Pricing and Plans
When it comes to cost, it’s important to consider how the pricing structure aligns with your budget. Both Xero and QuickBooks offer tiered plans, but the pricing and features at each level are different.
Xero Pricing
Xero offers three pricing tiers:
- Early: $13/month — Best for freelancers and solopreneurs with limited invoicing needs.
- Growing: $37/month — Ideal for growing small businesses that need unlimited invoices, bills, and bank transactions.
- Established: $70/month — Includes everything in the Growing plan, plus multi-currency support, expense claims, and project tracking.
Xero provides unlimited users at no additional cost, which is a significant advantage for businesses with multiple team members who need access to accounting records.
QuickBooks Pricing
QuickBooks Online offers four pricing plans:
- Simple Start: $30/month — Best for sole proprietors and freelancers.
- Essentials: $55/month — Supports up to 3 users and adds bill tracking and time tracking.
- Plus: $85/month — Supports up to 5 users and offers inventory tracking and project profitability.
- Advanced: $200/month — Includes up to 25 users, advanced reporting, and business analytics.
Unlike Xero, QuickBooks charges for additional users, which can make it more expensive for larger teams.
Which is Better for Pricing?
If you need unlimited users, Xero is the better choice, as QuickBooks charges per user. However, if you’re a small business with just one or two users, QuickBooks’ basic plans may offer better value.
Ease of Use and User Interface
When it comes to ease of use, Xero and QuickBooks offer user-friendly dashboards, but the learning curve differs.
Xero has a simple, modern, and intuitive interface. It’s known for its clean layout and easy navigation. The homepage provides a real-time view of cash flow, outstanding invoices, and account balances. For small business owners who are not accounting experts, Xero is often seen as easier to learn and navigate.
QuickBooks has a more traditional layout, with dashboards, menus, and navigation that resemble legacy desktop software. While it offers more advanced features than Xero, some users find the extra options overwhelming, especially if they’re new to accounting software. However, QuickBooks does offer in-app guides and support tools to help new users.
Which is Better for Ease of Use?
If you prioritize simplicity and a modern design, Xero is the winner. It’s often considered more beginner-friendly than QuickBooks. If you prefer a more robust feature set with additional tools and don’t mind a slight learning curve, QuickBooks is a solid choice.
Features and Functionality
Both Xero and QuickBooks provide core accounting features like invoicing, expense tracking, and bank reconciliation. But there are differences in the depth of features they offer.
Xero Key Features
- Bank Reconciliation: Automatically imports and matches transactions.
- Invoicing: Customizable invoices with payment links for fast payments.
- Expense Tracking: Track expenses and manage employee reimbursements.
- Project Management: Available with the “Established” plan for tracking job costs.
- Multi-Currency Support: Ideal for international businesses dealing in multiple currencies.
- Unlimited Users: Unlike QuickBooks, you can add as many users as you want for free.
QuickBooks Key Features
- Advanced Reporting: Offers in-depth financial reports and analytics.
- Invoicing: Custom invoices with payment links.
- Payroll Integration: Built-in payroll capabilities (extra cost) for employee payments.
- Inventory Management: Tracks inventory levels and cost of goods sold (COGS).
- Project Tracking: Available in the “Plus” plan and higher for tracking project costs.
- Mobile App: Full-featured mobile app for on-the-go accounting.
Which is Better for Features?
If you need multi-currency support or access for multiple users at no extra cost, Xero is the better option. If you need advanced reporting, payroll, and inventory tracking, QuickBooks is the better choice.
Integrations and Add-Ons
Both platforms support third-party integrations, but Xero has a slight edge in the number of apps available.
Xero Integrations
Xero integrates with over 1,000 third-party apps, including popular tools like PayPal, Stripe, Shopify, Gusto (for payroll), and HubSpot. This allows businesses to connect their accounting software with payment platforms, e-commerce systems, and CRM tools.
QuickBooks Integrations
QuickBooks integrates with around 650+ apps, including TSheets (for time tracking), Bill.com, and Shopify. It also offers seamless integration with QuickBooks Payroll, a major advantage for companies looking for an all-in-one solution.
Which is Better for Integrations?
If you need to connect your accounting software to a large number of third-party apps, Xero wins due to its extensive app marketplace. However, if you need payroll integration, QuickBooks has the edge due to its built-in payroll system.
Customer Support
Both Xero and QuickBooks offer customer support, but the availability and response times vary.
Xero Support
Xero offers 24/7 customer support via email and chat. While support is responsive, some users have noted that live phone support is not available, which can be frustrating if you need immediate help.
QuickBooks Support
QuickBooks offers phone, chat, and email support, but availability depends on your subscription level. Users with higher-tier plans get access to priority support, while entry-level plans may have slower response times.
Which is Better for Support?
If you value live phone support, QuickBooks is the better choice. If email and chat support are sufficient for you, Xero provides 24/7 support, making it a strong option.
Which One Should You Choose?
Choosing between Xero and QuickBooks depends on the size of your business, your industry, and your feature needs.
- Choose Xero if you:
- Want unlimited users without extra costs.
- Need multi-currency support for international business.
- Prioritize simplicity, automation, and ease of use.
- Choose QuickBooks if you:
- Need advanced reporting and payroll integration.
- Operate in retail, construction, or other industries that require inventory tracking.
- Want access to live phone support.
Both platforms are powerful, but they cater to slightly different business needs. If you’re still unsure, consider starting a free trial of both to see which one fits your workflow.
Tags: Xero vs QuickBooks, accounting software, small business accounting, payroll software, financial reporting, accounting solutions, bookkeeping software
