Xero vs QuickBooks Online: Which is Better?

If you want to know more about this solution, feel free to contact us. With Xero, you get the benefit of high-quality integrations over quantity like QuickBooks Online. The solution’s comprehensive and user-friendly invoicing and reporting features impressed us. Along with essential invoicing features, you get access to the vast QuickBooks network — if your clients use QuickBooks, transactions are especially easy.

• If the most affordable QuickBooks solution is your priority, you forgo the ability to pay bills through your software.
• QuickBooks is Intuit’s general accounting software, while QuickBooks Online (QBO) is specifically the cloud-based service.
• Plus, you get bill pay tools no matter which package you choose, although you can only pay five bills per month with the Early plan.
• Both platforms are specifically designed to cater to the needs of small to mid-sized businesses, making them ideal choices for small businesses, agencies, retail stores, and startups.
• The software must have tools to track time, record billable hours or expenses, send invoices for progress billings, or monitor project progress and performance.
• Invoicing isn’t complicated with either accounting service, and both Xero and QuickBooks Online have many advanced capabilities.

Setting up payment services is easy and fast in Xero, so you can start receiving payments online. Connect your business bank account to Xero and easily set up bank feeds. Allow Xero to sync all your bank feeds straight into its accounting software every business day. You can import up to one year (12 months) of data when you connect. With Xero, you can manage expenses, build bank connections, pay bills, track invoices, and more. It can automate mundane tasks like reporting and invoicing to save you effort and time.

Available Support

Xero users can only track time if they have the highest-tier Established plan for $65 per month, whereas QuickBooks Online offers time tracking starting with the $55 per month Essentials plan. The platform’s reporting suite is among the most powerful we encountered while reviewing accounting software. For example, you can’t use Xero to accept tips via invoices as you can with QuickBooks. On top of that, you can only convert quotes, not estimates, to invoices in Xero. This disappointed us, but not as much as the narrow client payment options available. You can only accept payments via card or direct debit with Xero, boxing out clients who prefer newer technologies.

Both have great accounts payable (A/P) features, but QuickBooks Online is slightly better due to its ability to generate recurring payments. Xero lets you create a recurring bill but not the payment, which means it doesn’t charge your checking account automatically. Today’s leading accounting platforms offer standard security features like data encryption, secure credential tokenization and more. While human error will always play some role in security breaches, you can be confident in your accounting platform when it comes to keeping your information safe.

• This Xero vs QuickBooks Online Comparison can assist you in making the right decision.
• Unlike QuickBooks Online, Xero also gives you an equity statement, which is useful if your business has several investors.
• To help you determine how both tools stack up, here is a head-to-head comparison chart featuring pricing and other capabilities.
• And while the Advanced tier of QuickBooks offers 24/7 support through live chat, phone lines, and email, their other tiers only offer a live chat option.

With Xero, you can pay your expenses in the same way you pay your bills. It allows your business to manage expenses using accurate views of total spending. This helps in managing cash flow and knowing when reimbursements are pending. You can track costs, view spending, and quickly reimburse expense claims.

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. If you need to track income, expenses, invoices, and time, QuickBooks Online offers a starting price of $35/month, while Xero starts at $60/month. The top-tier plans from both providers offer similar functionality. While Xero vs QuickBooks Online excel in providing essential accounting functionalities, they differ in their approaches and come with their own set of advantages and disadvantages.

Xero vs QuickBooks: Pricing

Finally, the “Uncleared Transactions” Report, which Accountants commonly run to show customers why their balance is lower than what is in the bank, is worth mentioning. In Xero, there’s no option to run this View from the Software’s Reports section. Furthermore, if you wish to run a Detailed Report on accounts receivable or payable, Xero does not provide a mechanism to total the Information by Client or Vendor. QuickBooks Online, on the other hand, makes it simple to get to this type of View.

We also recommend Xero if you’re seeking project profitability data alongside superior bill pay and expense management features. We found the platform’s profitability tools to be highly user-friendly. Your team’s tracked time and expenses power your profitability reports and give you all the necessary information to adjust inputs and minimize costs. This frees up the cash you need to make the timely bulk payments that Xero facilitates. Service or project-based businesses should choose accounting software that can track project costs, revenues, and profits.

Popular QuickBooks Online Alternatives

Here at Cloudwards.net, we want to help you pick the right accounting software for your business. In this article, we’re going to compare Xero and QuickBooks Online to see what stands out about two of the industry’s best providers. For those on the go, Xero has a mobile app accounting tool for both iOS and Android devices, though the app does not give you access to all of the features found in the full version.

Third-Party Integrations

Inventory in QuickBooks Online is tracked by prices, images and categories. In both accounting programs, quantities on hand update when an inventory item is selected on an invoice. QuickBooks Online calculates the product’s cost using FIFO, while Xero uses an average cost method. Fixed assets include the land, buildings or equipment that your business owns. If your accounting software doesn’t track depreciation and retirements, you’ll have to maintain them in separate spreadsheets and input manual journal entries.

While Xero’s $13 Early plan is far cheaper than QuickBooks’ $30 Simple Start plan, it’s also very limited due to the caps on invoices and billing. A better comparison is the $60 QuickBooks Essentials plan (plus the $45 Core or $80 Premium payroll plans) vs. the $37 Xero Growing plan (paired with the $40 or $80 Gusto plan). Essentials supports just three users, while Growing is unlimited, making it better value for large or growing operations. Core offers the basics, while Premium adds same-day direct deposit, role-based access, and auto time tracking. Elite also adds tax penalty protection, and a dedicated pro to help set up and troubleshoot. With QuickBooks, you can even take photos of your physical receipts, which the software automatically matches to existing expenses.

For example, you can’t bulk reconcile transactions, and you don’t have access to Xero’s most advanced analytics. That’s a big deal for small businesses with a limited budget but a lot of team members. Xero allows you to give your customers several ways to make payments. They can pay directly via Stripe, which integrates with various payment options, such as credit card, debit card, Google Pay, or Apple Pay.

Invoicing and Payments

Unlike Quickbooks Online, Xero requires no setup or training time – so you can get started right away without any hassle. Whether you choose QuickBooks or Xero, Chargebee can sync your subscription management engine with your accounting what is a bookkeeper meaning and definition software. Easily handle deferred revenue, generate invoices, streamline payments, and reconcile your bank account. You can add products, track what you have in stock, see what’s selling, and add item details to invoices.

Xero doesn’t just beat QuickBooks when it comes to bill pay features — it outperforms all other accounting software we reviewed on this front. If you’ve been struggling to pay your vendors in full or on time, Xero is more likely to eliminate this challenge than any other platform. We also like that you can use Xero to set recurring bills, generate billing reports, and store and organize all your bills. This makes the tool as great for payment as for understanding your cash outflows. Plus, you get bill pay tools no matter which package you choose, although you can only pay five bills per month with the Early plan.