Xero Or QuickBooks Online: Which Should You Choose?

QuickBooks is also better for businesses that need to track inventory, as it has built-in inventory management features. Xero also has inventory management, but it’s not one of its core functions. With a free plan and paid plans starting at $20 per month, Zoho Books has plans for most budgets. Higher-tier plans include unique features, like workflow rules, on top of tools that help you measure project profitability. Phone support and live chat support are available 24/5 to all paying customers, but third-party integrations are limited compared to QuickBooks Online and Xero.

Both Xero and QuickBooks Online have their own versions of transaction tracking tags, but QuickBooks Online is the winner in this arena. Xero lets users create two active tracking categories, while QuickBooks Online allows users to create 40 in the Simple Start, Essentials and Plus plans. The more categories you create, the more reports you can run to get a better idea of how your business functions and where there’s room to grow. The user experience is as important as any feature of your accounting solution. New users, even non-experts, should be able to quickly understand how to use the software. No matter how amazing your accounting software is, there will come a time when you need help from customer support.

  1. However, Xero only allows four total tracking categories — two active and two archived.
  2. Another option is Wave, which is a free accounting software program that includes invoicing, payroll, double-entry and sales tax tracking.
  3. In contrast, all Xero plans offer unlimited users and its highest-tier Established plan is a more affordable $70 per month.
  4. QuickBooks offers integrations with 400 plus apps and software tools to increase the functionality of your software plan.
  5. Xero and QuickBooks Online offer very similar features and functionality along with summary dashboards to measure business health.
  6. For businesses that rely on invoicing, generating and sending accurate invoices is a critical feature of accounting software.

Here’s a breakdown of our review criteria and how QuickBooks Online and Xero performed in each category. No matter which QuickBooks pricing tier you opt into, the QuickBooks team will always guide you through connex pricing setup. While both are very similar, these two products have exclusive benefits that set them apart. In this guide, we will explore the key differences and declare our respective winners in each category.

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When reviewing a product, users are asked to assess the product’s overall quality, which includes assigning specific ratings for ease of use, value for money, customer support, and functionality. We liked that Xero’s app store neatly organizes and categorizes these apps. This makes it easy to find the integrations you need and compare several options side-by-side.

You can review and pay outstanding bills in QuickBooks, and the platform will automatically record and match your vendor payments and invoices. Xero has a similar pricing structure as QuickBooks Online and offers three products–Early, Growing, and Established–that range from $13 per month to $70 per month. For companies in need of a payroll function for their employees, Xero offers add-on integrations for an additional cost.

Xero lets you invite your accountant via email and assign them “advisor” permissions. With QuickBooks, you can also send an email invitation to your accountant. QBO also has accountant-specific features they can use, like the ability to undo reconciliations, reclassify transactions, and write off invoices. It also have customization options and continues to roll out new reporting features.

Ease of Use: QuickBooks Online Wins

While the vocabulary may vary between the two products, they both offer electronic banking, excellent invoicing, payment acceptance, and bill management capabilities. For example, when you purchase the Pro Plus Desktop plan, you can have up to three concurrent users but each of those users must pay for their own account (at $349.99 each per year). Its Online version allows up to 25 users at no additional cost, provided you’re paying for the Advanced plan. Another key difference between the two companies is the maximum number of users it allows. Xero has no limit to how many users can access data, whereas QuickBooks limits this to 40 with its Enterprise plan.

You want advanced reporting

QuickBooks Online is an industry standard with more than 5 million users worldwide. If you count QuickBooks Desktop users, that number rises to 8 million. With more than 3 million users worldwide, Xero is popular but not as ubiquitous as QuickBooks Online.

We’ll also mention any notable strengths and drawbacks that were shared by current customers that we interviewed. Customer payments are remitted to the merchant’s designated bank account. QuickBooks Online has a range of product tiers to choose from to meet your business’s bookkeeping needs. The QuickBooks Online base plan starts at $30 per month, and the plan with the most features is $200 per month. Intuit offers prospective users a free 30-day trial and generous discounts on their monthly subscriptions.

Every service plan includes all the tools your business needs to oversee its finances from the desktop or via the powerful QuickBooks mobile app. Despite not offering unlimited invoices and bills in its base plan, Xero accounting software is a more scalable solution than QuickBooks in the number of users it supports. Xero supports unlimited users with all their subscription plans–in contrast, QuickBooks allows only up to 40 users with its highest-tiered plan.

Prices for QuickBooks Live Bookkeeping scale with the monthly expenses of your business, which means higher costs for businesses with higher expenses. We break down the prices in our QuickBooks Live Bookkeeping review’s pricing section. A satisfied https://quickbooks-payroll.org/ Xero user shared that the program is the most user-friendly accounting software on the market. Xero can be easy to use after you become familiar with it, but we believe QuickBooks Online is generally more intuitive and easier to set up.

Moreover, another likes that Xero has a batch-delete feature, unlike QuickBooks Online. They explained that if you import 500 transactions into QuickBooks incorrectly, you have to delete them all one by one. This is a time-saving feature for businesses that handle a large volume of transactions on a daily basis. I have learned never to underestimate the importance of live product support, particularly when it comes to managing my money. Another benefit is that QuickBooks Online is better for small businesses, as you’re able to scale with your growing company. For those moving their small business’ accounting over from another application, you can import data into QuickBooks Online using the Import Data function.

Xero vs QuickBooks: Key Differences & Which Is Best for You 2024

As your business grows and you become more advanced, the level of reporting detail you desire might change. When it comes to tracking transactions, QBO is much more flexible than Xero. Katelyn is a Junior Research Analyst at SoftwarePundit, where she conducts in-depth analyses of technology markets & products and writes software-related content.

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