Selecting the right cloud-based accounting software for your business can be challenging due to the many options available. Among the top contenders, Xero and Quickbooks stand out as the two leading names in the market. But how do you determine which one is better when they offer similar features? This article aims to compare Xero and QuickBooks to help you make an informed decision for your business.
QuickBooks vs Xero: An Overview
Both Xero and QuickBooks Online cater specifically to small to mid-sized businesses, as well as agencies, retail stores, and startups. These web-based platforms offer on-the-go accessibility through desktop and mobile apps. Additionally, both software solutions provide multiple pricing plans, allowing you to choose the best fit for your budget and business requirements.
While Xero and QuickBooks share many similarities, there are distinct differences that set them apart. QuickBooks Online, established in 2004, entered the accounting scene two years ahead of Xero and gained recognition for its advanced accounting features, quality invoicing, 550+ integrations, and a unique selling point in its lending feature. Xero, on the other hand, quickly became a formidable competitor by offering robust accounting features, access for unlimited users, over 700 integrations, and more.
Xero vs QuickBooks: A Comparative Analysis
To determine the superior accounting software between Xero and QuickBooks, let’s evaluate eight crucial features of cloud-based accounting solutions:
Winner: Xero & QuickBooks
Both Xero and QuickBooks employ double-entry accounting principles and support cash-basis and accrual accounting. They offer essential features such as bank reconciliation, reporting, and accounts payable, making it a tie in terms of accounting capabilities.
QuickBooks Online takes the lead here by offering two features that Xero lacks: lending and tax support. With better invoicing and project management functionalities, QuickBooks provides a more comprehensive feature set. However, Xero offers additional features on its higher-priced plans.
Read: An Essential Guide to the Pros and Cons of QuickBooks
Winner: Xero & QuickBooks
The winner in terms of pricing depends on the size of your business and your budget. QuickBooks Online offers four pricing plans ranging from $20 to $150 per month, with payroll costing an additional $35 to $80 per month (plus $4 per employee). Xero offers three pricing plans ranging from $9 to $60 per month, with payroll starting at $39 per month (plus $6 per employee). While Xero may seem cheaper initially, QuickBooks Online offers better value for small businesses on its lowest-priced plan. However, for larger businesses with multiple users, Xero’s pricing is more favorable as it allows unlimited users.
Ease of Use
QuickBooks wins in terms of ease of use as it is quick to set up and intuitive to navigate. While Xero becomes user-friendly once you become familiar with it, mastering the system requires a significant investment of time and learning.
Xero takes the lead in integrations, offering over 700 integrations compared to QuickBooks’ 590. This extensive integration capability enhances the functionality and customization options of the software.
Both Xero and QuickBooks employ data encryption, redundancy measures, and physical security protocols. However, Xero stands out with its impressive 99.97% uptime, establishing a robust security reputation in the cloud accounting realm.
Users and Permissions
With its unlimited user capability, Xero takes the lead in this category. QuickBooks Online supports only 1 to 10 users depending on the pricing plan, while Xero offers unlimited users across all plans. Additionally, Xero provides strong user permission settings, enhancing security and control.
Customer Service and Support
Winner: Xero & QuickBooks
Traditionally, QuickBooks has been criticized for its subpar customer service, while Xero has received praise for its excellent support. However, recent reports indicate declining support quality from Xero. Therefore, it’s a tie in terms of customer service and support.
How to Choose between QuickBooks and Xero?
Based on the comparison above, QuickBooks and Xero have no definitive winner. The choice ultimately depends on your business’s specific needs, budget, and desired capabilities.
Both software solutions effectively streamline accounting processes, but QuickBooks is more suited for freelancers and small businesses, while Xero is ideal for mid to large-sized businesses or those seeking scalable software.
To make an informed decision, take advantage of the 30-day free trials offered by both platforms and assess their suitability for your business.
Seek Expert Assistance!
As members of the QuickBooks ProAdvisors and with extensive knowledge of Xero, Goringe Accountants can help you navigate through various software options beyond Xero and QuickBooks.
We offer consultations to understand your business requirements and assist with the setup process to ensure a smooth transition. Feel free to reach out to us for expert advice!