But their approaches are different, and they each have different pros and cons. The QuickBooks Online accounting dashboard provides much of the same information that’s included in Xero’s dashboard, but it also provides quick links to tasks such as invoicing, time tracking, and payroll. For those who like everything in neat compartments, Xero may be your best option. Instead of the “add what you need” process many other accounting software applications employ, Xero requires you to set up your business completely before you can start using the software. Perhaps you’ve read our accounting software reviews but remain confused about which of these two, popular accounting tools is right for you. FreshBooks offers unlimited time-tracking in its lowest-tier Lite plan, whereas Xero users would have to opt into the highest-tier Established plan for that feature.
- Not only do all four QuickBooks Online plans contain Sales Tax Management Features, but they also include tools for maximizing Tax Reductions and managing 1099 payments.
- This makes it the best accounting software we’ve researched and helped it to edge out Xero in this round.
- For a small number of employees, Xero allows you to complete all pay runs and run employee payroll reports.
- It enables your customers to click straight on the button and pay fast.
- The Contacts category lets you manage all contacts, from customers to suppliers to contractors, from one location.
- Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content.
The ability to accept payments on your smartphone through the QuickBooks Online mobile app is a convenient feature for many on-the-go business owners. You can even track your company’s spending habits by simply viewing the reports on your phone. Meanwhile, Xero’s mobile app might be preferable if you often need to record bills and bill payments on the go.
Xero vs QuickBooks Online
QuickBooks and Xero both have good support and training options, but QuickBooks has phone support while Xero does not, earning it a research score of 4.7 – nearly double Xero’s 2.4/5. Similarly, all of Xero’s plans are often 50% off for the first three months. This means that Xero Early may be as cheap as $6.50 per month when 50% off, while QuickBooks Simple Start would cost just $9 a month, provided it is offering the same deal. Still, if your business relies heavily on other software services, Xero is a better bet then QuickBooks for making them all work together and ensuring everything is easily accessible.
- Both QuickBooks and Xero let you set up automated data tracking and report generation, but QuickBooks has more granular options, making it faster to compare reports against historical data.
- Although it’s not the only accounting software we recommend, it’s a great choice for any small business.
- The platform offers high-quality built-in integrations with many leading business software vendors.
- When comparing Xero vs QuickBooks Online, one of the most prominent ways in which this QuickBooks Solution distinguishes out is with its Tax Capabilities.
- Summary
There’s a lot to think about when comparing and choosing accounting software for your business, and not only the monthly cost. - QuickBooks Online, an offshoot of the popular QuickBooks Desktop application, is a good fit for small and growing businesses.
Reconciling your bank accounts in Xero so they transfer cleanly to QuickBooks Online. After reconciling, make a note of the balances of your bank accounts. This information will be needed when preparing the post-conversion reconciliation in the QuickBooks Online company file.
You can import data such as customers into Xero, but you’ll have to download the CSV file template in Xero in order to import the data correctly. After you start a free 30-day trial of Xero, you’ll activate the account and provide details about your business. Then, you can connect your bank accounts to Xero and decide if you’ll accept electronic payments for online invoices. With the QuickBooks app, you can stay on top of all your business finances and accounting from your phone.
We evaluated the features, pricing and customer support offered by both QuickBooks and Xero. We also set up trial accounts to get hands-on experience with both products and determine their user-friendliness for ourselves. Users appreciate that Xero is easy to set up and use, with a simple and clean user interface along with intuitive features. Reviewers also praised the fixed assets manager and the project accounting capabilities. The software’s biggest drawback is its inability to reconcile transactions without bank feeds and its lack of live phone and chat support. We also recommend Xero if you’re seeking project profitability data alongside superior bill pay and expense management features.
Building Better Businesses
As a result, now that you’ve gone over the intricacies of these systems, let’s take a look at the most significant distinctions for Xero vs QuickBooks Online so you can decide which is best for you. Depending on the plan you select, QuickBooks Online ranges in price from $30 per month for the Simple Start plan to $200 per month for the Advanced plan. A 50% discount will be applied to the above prices for the first two months. One of the things I like about this Xero alternative is the fact that you can place your cursor over one of the categories listed in the vertical menu to see what features are available in that category.
Integrations
It’s a great way to know how much money you currently owe vendors and how much you can expect to owe in the future. We like that QuickBooks offers extensive features in each pricing package. We also like that QuickBooks is transparent about features and pricing online. Unlike some other vendors, QuickBooks leaves no questions about what you get for your dollar.
Xero processes payment through a payment gateway like Stripe, GoCardless and others. Keep in mind that these services charge a fee to process payments (usually around 2.9% plus 25 cents per transaction, though this varies by the payment processor). QuickBooks Online offers integration with hundreds of apps, making it great for small business owners. These integrations including PayPal, TSheets, Bill Pay for definition of point of sale marketing QuickBooks Online, and Stripe, with apps available for inventory, payroll, CRM, and time tracking. QuickBooks Online also gives you the option to have customer payments applied automatically once they’re deposited, or leave that option to the user. The Accounting category in Xero is where you’ll handle all of your banking transactions, as well as manage your chart of accounts and financial statements.
Who Do We Recommend QuickBooks For?
All Xero accounts allow unlimited users; many other platforms cap user allotments. You can upgrade to a higher tier when the time is right, not when you meet an arbitrary upper limit. With Xero, you get budget-friendly, high-quality accounting software today, tomorrow and long after. For the record, Xero has an outstanding set of accounting features. QuickBooks Online is an accounting software tool developed and marketed by Intuit. Its products are intended to help businesses of all sizes, from small and midsize businesses to corporations and enterprises.
There will be no unrealized foreign currency gains or losses for your customers and vendors. The rounding differences from conversions will show up and be reflected as a P&L item in QuickBooks Online. If you decide not to purchase additional years, then the transactions from the prior years on file will be consolidated into an automatically calculated opening balance. It is important that you export reports from Xero and save them in a safe location even after the conversion is done for the tax or financial audits.
Xero vs. QuickBooks
Reports also are customizable, with adjustable formatting and the option to add your own formulas and groupings. For instance, you can drag and drop certain expense categories into a single subgroup — an “office expenses” subgroup could include office equipment, supplies and utilities. And if you don’t like how the dashboard looks, you can reorganize panels and hide the ones that aren’t useful. When reconciling books, Xero suggests likely matches between bank statement lines and transactions entered in the software.
Plans to suit your business
QuickBooks and Xero are among the best accounting software platforms for small businesses. Customer support is an important factor to consider when shopping for the best payroll software or accounting tool. Companies with efficient customer support provide technical support, product training, an extensive knowledge base and help users troubleshoot and resolve issues in the shortest possible time. However, Xero includes inventory management with every plan, including its $13 per month Early plan.
You can also create asset types and assign an account ID for each asset. When you sell an asset, the program will calculate a gain or loss. If fixed assets are an important part of your business, you should choose Xero. Xero is far ahead of QuickBooks Online in terms of fixed asset accounting.
This is also important when you are using the cash accounting scheme. You can do a lot with QuickBooks Online, but all the options may feel like information overload starting out. Can support larger small businesses with dozens of employees; highest-tier plan includes 25 users.
