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Introducing Xero and QuickBooks
A cloud accounting software is an indispensable element to support the growing needs of a business. It plays a critical role in performing day to day business operations. And when it comes to choosing the feature-loaded robust cloud accounting platforms, Xero and QuickBooks are the two strong contenders. These both top the list of best accounting software programs.
Using cloud platforms help enhance transparency in accounting processes. Whether it’s bill payment, invoicing, or bank reconciliations, cloud accounting software enables you to help you stay on top of projects. They simplify everyday business tasks to a great extent. Furthermore, both the Xero and QuickBooks accounting platforms are suitable to be used for small to medium-sized businesses. As such, startups, small agencies, and retail stores can enjoy various benefits from using them.
So if you are searching for the right online accounting solution for your business, check out this analysis of Xero and QuickBooks. Nevertheless, in terms of features, both Xero and QuickBooks are comprehensive platforms, but they have their own set of pros and cons. Going through this analysis will provide you with a clear picture to assist you in picking the right tool for your company.
QuickBooks Online is a popular cloud-based accounting software from the leading American financial software company, Intuit. Integrating QuickBooks with the existing accounting system can help companies streamline repetitive tasks that consume a lot of time and workforce. From payment processing, managing invoices, to tracking projects, everything can be collected automatically via a smartphone.
With its feature-rich attributes and intuitive interface, QuickBooks has gained immense appreciation among its users. As revealed on its website, QuickBooks claims to have 98%, satisfied customers. The solution has been held effective in helping companies run their business smoothly. Thus, it won’t be wrong to say that QuickBooks has established a strong foothold in the market. In the US, it occupies 80% of the market share as well as has been found to ensure $3,534 on average tax savings per year.
Apart from this, QuickBooks is extremely user friendly. It offers easy and fast navigation. This cloud-based solution has extensive features that make accounting management for a company a hassle-free process. Considering its effectiveness, the software is often described as “smarter business tools for the world’s hardest workers.” Meanwhile, it also has a more extended market existence than Xero. Therefore, it is a preferred choice among accountants.
Xero is one of the most potent accounting tools in the market. Launched in New Zealand, in the year 2006, Xero has consolidated its reputation as the preferred accounting tool for small and mid-sized businesses.
The accounting tool truly lives up to its tagline “Beautiful Business.” Using it makes accounting and management enjoyable for organisations. Within a short span of its launch, Xero has gained the trust of consumers. It is super friendly to users; even freshers can use it unhesitant. In 2017, the Xero accounting software claimed to have more than one million consumers worldwide.
Moreover, the Xero cloud accounting software encapsulates intelligent functionality that aids in simplifying accounting processes. Be it tax management, bill payments, expense management, or financial report management, Xero offers you the convenience of managing your business anywhere. It has been specifically created to cater to the needs of small business owners. Thus, using the Xero platform, business owners no more need to invest time in learning accounting concepts.
Xero comes with tons of features. Additionally, it is suitable to be used for a variety of niche markets, including IT, retail, e-commerce, etc. It can also fit the needs of online sellers who conduct business globally.
Feature comparison of Xero vs QuickBooks
1. Ease of setup and use
Xero and QuickBooks online both user-friendly feature dashboards that offer easy navigation and a quick view of all business metrics.
QuickBooks interface is customisable that lets users manage expenses, sales, invoices, bank account, and profit loss with ease. Likewise, Xero has a clean interface that lets you control a range of activities for many regions at the same time.
Invoicing isn’t complicated with either Xero or QuickBooks. Both of these accounting platforms have advanced capabilities and features for processing invoices. Xero enables you to create and preview invoices, but sometimes it could get glitches.
QuickBooks Online makes it handy to update client details in invoices without requiring to navigate the complete record list
3. Expenses and bills
Paying bills is simpler in Xero than in QuickBooks. This is because Xero offers an easy categorisation of money with its accounts chart. All you have to do is head to “purchases” under “accounting,” select “new,” and then select “bill.”
Moreover, for managing expenses, both Xero and QuickBooks have automated processes.
Sorting reports based on several factors such as date, P&L, and balance sheets are much convenient with QuickBooks Online. While with Xero, it could be a bit complicated.
For optimum results, your accounting platform should provide easy integration with multiple systems. Nevertheless, in integration, both Xero and QuickBooks excel in their respective marketplaces.
Pricing comparison of QuickBooks vs Xero
For basic functionalities such as expense management, income management, time management, and invoice generation, QuickBooks online will cost you $35/month, and Xero will cost you $60/month. However, if you go for higher plans, both of these platforms are likely to offer you similar functionalities.
Xero offers three pricing plans.
The most basic plan costs $9/month. It has limited features which include:
- Five invoices and quotes
- Five bills entry
- 20 bank transaction reconciliation.
The mid-range plan is available for $30/month. It includes:
- Send invoices and quotes.
- Bills entry.
- Bank transaction reconciliation
For an established business, Xero’s top plan is available for $60/month. This plan comes with a growing set of features, including:
- Reconcile bank transactions.
- Send invoice and quotes.
- Capture bills and receipts
- Multicurrency functionality
- Track project time and cost.
- Capture and manage claims.
QuickBooks online’s most straightforward plan (Essentials) starts at $25/month. As compared to Xero, this plan offers many more functionalities at the lowest price range. The plan offers:
- Income and expense tracking
- Capturing & organising receipts
- Invoicing & accepting payments.
The main drawback of this plan is that it is only accessible by a single user and does not offer time or inventory tracking.
Next, the Plus plan costs $25/month. In addition to features covered in the Essentials plan, the Plus plan has:
- Time tracking
- Access to reporting and project profitability
- Inventory management
- Accessibility for up to five users.
The advanced plan comes at $150/month. It offers a large set of features including, but not limited to:
- Run advanced reports
- Customise reporting fields
- Automated approval and reminders
- Batch invoices and expenses.
Choosing Xero vs QuickBooks Online in 2020
Both Xero and Quickbooks are excellent clouds based accounting software. With feature-rich and straightforward interfaces, these platforms are ideal for small businesses. These are the comprehensive tools focused on ensuring the smooth functioning of day to day business operations. Moreover, their customer reviews showcase that investing in this software is the right bet for companies.
Here’s a quick overview of when to choose Xero versus QuickBooks Online:
Xero is an excellent choice if –
- If you have a small business just starting out but not planning to grow too large.
- If you are a less experienced bookkeeper.
- You prefer a minimalist user experience.
- You are outside of North America.
QuickBooks is good to go if-
- You want advanced reporting options.
- You want access to a lot of features at the low price range.
- You need payroll processing and integrated merchant processing.
- You have a large business involving experienced people.
- You are in the US.
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