Cloud accounting is an overcrowded market; two of biggest names in this space are Xero and QuickBooks Online.
When you have two very capable accounting software options, with almost identical offerings and similar feature set, It’s hard to know which is better for your business. That’s what we’re here to find out.
|Tie||Hardware & Software Requirements||Tie|
|✓||Users & Permissions||✘|
|✘||Ease of Use||✓|
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|✘||Negative Reviews & Complaints||✓|
|✓||Positive Review & Testimonials||✘|
Xero is a New Zealand-based accounting software that rivals QuickBooks in terms of capability and popularity. It offers strong accounting, access for unlimited users, over 700 integrations, and an effective feature selection.
QuickBooks is the accounting industry leader. With advanced accounting features, refined invoicing, 550+ integrations, and a lending feature, it’s easy to see why the software is so renowned by accountants and bookkeepers.
In this article, our goal is to help you find the best accounting software for your business needs. To make your decision easier, we’ve carefully researched and tested both products. We’ll compare Xero and QuickBooks based on features, pricing, customer experience, reliability, and more, so you don’t have to.
For its cloud-based accounting, both Quickbooks Online and Xero offer strong accounting services. Both software has powerful accounting features including bank reconciliation, accounts payable, and lots of accounting reports. Each uses double-entry accounting and advocates cash-basis and accrual accounting.
Winner: Quickbooks Online
|Unlimited quotes and invoices||Available in Standard|
|Recurrent invoicing||Available in Standard|
|Available in Essentials|
|Purchase orders||✓||Available in Plus|
|Inventory||Basic functionality; integrates|
with inventory management
|Available in Plus|
|Payroll||Employee numbers limited by|
subscriptions; basic payroll functionality.
|10 employees included,|
$4 for each additional
|Multiple currencies||Available in Premium||Available in Essentials|
Both companies offer similar features. In some features such as invoicing, and lending, QuickBooks exceeds Xero. In other features like contact management, Xero provides better service than QBO. So how do we decide who is better?
Xero used to be the clear winner when it used to include most of the features in all of their versions and pricing plans, while Quickbooks limited access of many to their Plus accounts. But now, Xero restricts advanced features to expansive plans like QuickBooks.
Thus, it all comes down to the details. Xero offers limited invoice templates while Intuit’s QuickBooks offers lending and great invoicing with multiple templates to choose from as well as built-in packing slips.
However, for example, if you’re a startup who needs the basic features of time tracking, you’d find yourself needing the Plus plan on Quickbooks versus any version with Xero.
Xero offers three pricing plans that run between $9 and $40 per month whereas QuickBooks has four pricing plans between $20/mo and $70/mo. However, QBO may charge you more depending on how many employees you need to be able to access it, while Xero is one payment for unlimited access.
In terms of pricing, the clear winner will depend on the size of your business.
For small businesses, Quickbooks may have an edge because of slightly lower pricing for higher-tier plans, but Xero’s transparency of unlimited users, no matter your plan — makes it a winner for medium to large businesses.
Hardware & Software Requirements
As long as you have internet access, you can access QuickBooks with nearly any device using one of the following browsers:
- Google Chrome
- Mozilla Firefox
- Internet Explorer 10+
- Safari 6.1+
Since Xero is also cloud-based software, it can also be compatible with almost any device with internet access and works with any one of these browsers:
- Google Chrome
- Internet Explorer 11
- Microsoft Edge
- Mozilla Firefox
- Safari 8+
Both Quickbooks Online and Xero were built for the cloud, and come with free mobile apps for Android and iOS.
Users & Permissions
For all three of its pricing plans, Xero allows access to as many users as you need, plus it also offers incredibly powerful user permissions so you can control who has access to which features.
QBO supports users based on their pricing plans. It also has strong user permissions, but in the end, you can’t beat the unlimited users.
Ease of Use
Winner: QuickBooks Online
Although both QuickBooks Online and Xero have steep learning curves, QBO offers a well-organized UI which makes it easy to get used to the software and learn how it works.
Xero, on the other hand, is only easy to use once you get to know the software. The setup and learning curve of Xero can be quite intensive. However, it does have great support tutorials and tools to get over the learning curve, but apart from occasional navigational difficulty, QBO is definitely easier to use.
Customer service & support
Xero was known for its great customer service but has recently declined to the same level as QBO (which is somewhere Xero does not want to be). Xero doesn’t have a customer phone support or a telephone helpline and it often takes a day for email responses. However, Xero does have great tutorials and support alternatives to help you learn and troubleshoot the software.
QuickBooks is known for poor customer support. However, QuickBooks does offer customer phone support but wait times and holds are often long. Although QBO made some strides to shorten their wait time, users still aren’t happy with QBO’s support or the lack of email support.
Negative Reviews & Complaints
Winner: QuickBooks Online
This is a category where both companies should not want to win, and yet here they are.
QBO has received many customer complaints concerning poor customer assistance, bugs, limited mobile apps, and even unauthorized charges.
While Xero has fewer complaints than QBO. However, users still have concerns with Xero’s limited mobile apps, steep learning curve, and price changes.
Positive Reviews & Testimonials
While QBO has more positive reviews but on the whole, Xero users are happy with their experiences since it receives a higher percentage of positive to negative reviews.
Apps & Integrations
Both QBO and Xero have huge app libraries that can make your day-to-day business administration easier, With Xero has over 700 integrations, while QuickBooks Online comes in with 590 integrations. If integrations are important to you, Xero is the way to go.
|Security Features||Xero||QuickBooks Online|
|SSL Security encryption||✓||Transport Layer|
|Session security audit trails||✘||✘ (deleted transactions|
can be viewed)
Both QuickBooks Online and Xero use strong data encryption and powerful security measures. However, Xero has one of the strongest security reputations in the cloud accounting market with 99.97% uptime. On the other hand, QuickBooks users have reported downtime and outage issues on several occasions.
And the Winner Is…
Xero certainly lives up to their tagline of “beautiful accounting software,” with an intuitive interface but a recent change in price structure, Xero has lost the key points that set it apart. While Xero is still great software, a few recent QBO updates were just enough for QuickBooks Online to edge out the competition.
When it comes to reliability, Intuit’s Quickbooks is top-rated for small business accounting for it’s amazing invoicing automation, lending features and more. Although Xero didn’t win this match-up, it still has a ton to offer and might be the better fit for your business.
Just because QBO is the winner here does not mean that it’s the best choice for your company. Xero can be ideal for businesses looking for scalable software that will grow with their company. Every business and every accountant will need something different out of accounting software. So, the decision of choosing between QBO and Xero should be based on what’s best for your business needs and preferences.
As long as Xero keeps their quality of service and advertised features as they grow, they are a great alternative to your business accounting needs. Or, you may find that neither company meets your needs entirely, then be sure to explore the many other business accounting software options out there for you.