If you’ve been following accounting technology changes in recent years, you know that more businesses are turning to cloud solutions to help manage their operations. In fact, 67% of accountants prefer cloud accounting over traditional software. Today, many companies choose QuickBooks Online or Xero?
Which one is better for your business?
We compare QuickBooks vs Xero to help you learn which software solution may be the right choice for your company.
QuickBooks Online or Xero: A Comparison
QuickBooks vs Xero is a preferential choice, but we do want to be 100% honest and mention that we recommend QuickBooks to our clients. We find that the platform is more robust and offers the essential features businesses need to grow.
QuickBooks Online Rundown
QuickBooks has multiple tiers to choose from, and while the base tier starts at $25, it’s not uncommon to find a 50% off deal. Each plan is significantly different. Some plans offer extras, such as:
- Bill management
- Additional users
- Enter time
- Project profitability
- Workflow automation
- Employee expenses
- Batch invoices and expenses
- Much more.
However, the Simple Start option offers a variety of features that are perfect for small business owners, including income and expense tracking, invoicing and payments, tax deductions, reports, receipt capture, track mileage, cash flow, estimates, sales and sales tax, contractors, and much more.
Each subsequent tier offers these base features and additional perks.
If you’re a business owner who relies heavily on reports to make decisions, QuickBooks is a good solution for you and will continue offering robust functionality as your business grows. One main issue, and it’s actually a strength of Xero, is that you’re limited in the number of users that can access your account.
For example, Simple Start allows just one user to access the account. However, you can give a link to two accounting firms to access your account. Sharing with your accountant is as easy as sending them a link.
One of the major strengths of QuickBooks Online is that it’s scalable as you grow your business. While both solutions are cloud-based and can grow with your business, the major advantage goes to QuickBooks due to:
- Advanced reporting options, which are ideal for growing business
- The ability to run profitability and sales reports
- The option to track and run reports on inventory
If you’re a small business, you’ll find that the platform offers key features that you need for your business today and in the future as you grow. One area that can use some improvement is the ease of use because there is a learning curve to leverage all of the features available through QuickBooks.
Anyone on the Advanced tier has access to on-demand training, which allows you to work with professionals to ensure that you’re getting the most out of the platform.
Are you thinking of trying Bill.com? We also covered these two in one of our most recent articles: Bill.com vs QuickBooks Online.
QuickBooks is an amazing, robust platform, but Xero is a strong competitor that may be a better choice for you. First and foremost, pricing starts at just $12 per month for an Early account, which is what simple, new businesses start on.
However, as you establish your business, you can transition to the Established plan. This plan is $65 a month, but it allows you to:
- Claim expenses
- Use multiple currencies
- Track projects
- Run bank transaction reconciliation
- Enter bills
- Send quotes
- Send invoices
- Capture all receipts and bills
- View detailed analytics
You also gain a bunch of features, such as business and cash flow snapshots. A main strength of Xero is that you can have an unlimited number of users, but you can only send out 20 invoices, so it’s not ideal for an invoicing platform if you need that function.
Like QuickBooks, you can send your accountant a link and give them advisor permission to access your account.
As your business grows, Xero has multiple tiers that can help you better manage your operations with advanced features. The platform does lack the custom, in-depth reports that many owners rely on to make smarter business decisions.
QuickBooks Online vs Xero: Final Points
We recommend QuickBooks because it’s a strong brand with a long history of success. If you need to run reports and dig deeper into your business’s operations, QuickBooks may be the right choice for you.
Reporting and customization are the two main factors in us choosing this platform over Xero.
Advanced reports are great for owners or anyone responsible for managing a business’s financials. Owners or stakeholders may request reports to get a clearer picture of the company’s financial health.
Xero’s highest tier does offer project tracking, but there are no advanced options for reporting. For us, the biggest weakness of Xero is the lack of reporting to help businesses make better sense of their operations.
Quick Notes on Customer Service
How do you prefer to work through product issues? Each platform is unique in this respect.
- QuickBooks has phone support for basic users, but if you’re on an Advanced plan, you gain access to 24/7 support.
- Xero offers online support, and if you have any issues, the company will call you to remedy the problem. However, there is no phone support outside of Xero reaching out to you first.
With greater adoption and a high user base, QuickBooks has plenty of great features and is easy to pass off to an accountant to work with.
QuickBooks and Xero are both fantastic accounting solutions for business owners. While QuickBooks has over 5.3 million users, Xero is closing the gap and is trusted by over 3.3 million users worldwide.
Which is the right choice for you?
That’s up to you and your business’s needs. However, if you do plan on sharing your account data with an accountant, QuickBooks Online is more widely used and the platform that your accountant is likely more familiar with.
Do you need help setting up QuickBooks Online for your business? Contact us – we can help