Xero Vs Quickbooks: Which One Is Best?

If you are tired of data errors, lost documentation, duplicate payments (oops!), incorrect expense classification or if you simply want to make your accounting process better, it’s time to make a switch. Switch to what, though? Accounting Softwares.

Modern accounting software takes care of all your accounting needs and addresses all your challenges promptly. They make the process 100x easier, leaving almost no room for error. That means goodbye paper trails that can go missing, extra or less zeros, missed entries, unauthorized purchases, and a lot more.

But which one do you choose? You must have heard of the following two accounting software: Xero and Quickbooks. Both of these software are well-known and considered among the best business accounting software. Naturally, it could be hard to decide between them. Which one is the best?

In this blog, we are going to compare these two on multiple factors and identify where each software works better to help you make the right choice.

Pricing & Plans

One of the common concerns, also the first one usually, that most companies have is about pricing. How much will they have to invest in order to solve all of their challenges?

Xero

Xero offers 3 pricing models: Starter for $29, Standard for $46, and Premium for $69 every month. Each plan is designed as per the user’s needs. For instance,

• The starter pack is appropriate for sole traders, new businesses, and the self-employed.
• Standard pack is suited for self-employed and growing businesses.
• Premium is designed for businesses of ALL sizes, from SMEs to enterprises.

QuickBooksOn the other hand, QuickBooks offers you four options: Simple Start for $35, Essentials for $65, Plus for $99, and Advanced for $235. These plans are suited for small, mid-sized, new businesses and self-employed individuals. Industries They ServeXero The list of industries that Xero serves is quite long. To be precise, it currently serves 46 industries. Besides the common ones—professional services, manufacturing, consulting, wholesale, retail, and restaurants—it serves other industries and business types as well, like:

• Farming
• Education
• Gyms
• Freelancers
• Landlords
• Lawn Care
• Massage Therapists
• Printing and more

QuickBooksAs for QuickBooks, it serves 9 industries listed on its website. These are:

• Professional services
• Manufacturing
• Wholesale
• Construction
• Retail
• Churches
• Restaurants
• Legal
• nonprofit

We clearly see a winner here. FeaturesXeroDifferent pricing plans offer different features. However, you will be surprised to know that their Starter Pack only has two features that are not available for you to use. These are Bulk reconciling transactions and using multiple currencies. Moreover, you can only enter 5 bills and send 20 quotes and invoices. Similarly, their Standard pack gives you access to all features except for the use of multiple currencies. Basic features:

• Send invoices and quotes
• Enter bills
• Reconcile bank transactions
• Capture bills and receipts with Hubdoc
• Short-term cash flow and business snapshot

There are 3 optional features which can be accessed with any plan at additional costs:

• Claiming expenses
• Tracking projects
• Analytics Plus

“Is that all that Xero has to offer?” The answer is NO. Some of its features are common across all plans. These include:

• Bank connections: You can get your bank data from over 21,000 financial globally. You can connect them so that the data flows automatically into Xero or import it manually.
• Inventory: Xero keeps count of items that are in stock and records their value. This way, you can take control, see what’s selling, as well as streamline invoicing and ordering from your device.
• Reporting: You get reports in real-time, customize the presentation to your liking, compare and calculate for insights, and make data-driven decisions.
• Accept payments: It gives your customers the flexibility to pay the way they want right from the Xero invoice—credit card, debit card or direct debit.
• Purchase orders: You can also create purchase orders and later convert them to invoices at your will.
• Files: You have an entire library to yourself where you can email or upload any kind of file, view the file when entering data, and share them in real-time with your accountant or bookkeeper. Awesome, isn’t it?
• Manage Xero contacts: Complete view of your customer or supplier’s purchase history and details. Yes, Xero offers that as well. You can add, edit and store contact details, notes and documents for any contact in Xero. Plus, you can access it from anywhere on the web or via the app.
• Sales tax: It allows you to set as many sales tax rates as you want, record the sales tax on transactions for you, and use this data to prepare sales tax returns.

QuickBooksFeatures in QuickBooks pricing plans vary greatly. While its Simple Starter pack offers 14 features, including connection with 1 sales channel, the Advanced pack offers 28 features. That’s not having access to 14 features at once. The 14 features which are common across all plans are:

• Income and expenses
• Banking with 3.00% APY
• Bookkeeping automation
• Invoice and payments
• Tax deductions
• General reports
• Receipt capture
• Mileage tracking
• Cash flow
• Sales and sales tax
• Estimates
• Contractors
• Connect 1 sales channel.
• Bill management

Note: You can connect 3 sales channels in the Essentials and all sales channels in the Plus and Advanced Plans.

Moreover, Intuit Assist is the latest edition that allows you to leverage AI to replace tedious tasks and personalize client communications. Finally, all their plans get you access to Expert Assistance (free for 30 days) and Live Tax Experts. The fees for these live tax experts vary epending on your entity type and are subject to eligibility.

What’s Better?

There is no doubt that both of these software are excellent at what they do. However, there are some significant areas where Xero takes a clear lead. Here’s the breakdown for you.

#1 - Better Scaling Option

All of Xero's core and additional features are adaptable and suited for larger teams and businesses. This means that today if you are a small, mid-sized, or single entity that’s aiming to grow and expand, you can rest assured that even an early plan of Xero can be scaled easily to meet your needs.

Comparatively, QuickBooks’ scalability isn’t that effective. Xero has a variety of add-ons to facilitate processing new projects you might take on as your business grows and has an excellent core functionality for processing invoice payments.

So whether you expect to grow and, god forbid, downsize in the coming years, Xero will match your unique needs.

#2 - Simpler Interface

Back in the early 2010s, QuickBooks was criticized for its ease of use and navigation. The good news is that it has made progress since then. However, there are still a lot of things happening at once at one go on the screen, which may be confusing.

Comparatively, Xero’s interface was designed keeping the modern customer in mind. It looks better, the learning curve is not so steep, and it is generally much easier than most other software.

#3 - Internationally-Acclaimed

QuickBooks dominates the North American markets. Xero, on the other hand, while still commonly used in the US, is much more established internationally, especially in the UK, Europe, New Zealand, and other Western countries.

Its automatic bank feeds, simplified payroll, and easy learning curve have received much appreciation from accounts all around the world. Additionally, safety checks, as well as proper audit trials, are built-in for maximum efficiency whether you’re based in the US or abroad.

FAQs

What are Xero and QuickBooks used for?

Xero and QuickBooks are leading accounting software that helps you manage finances, including invoices, payrolls, expense tracking, bank reconciliations, and more.

Is Xero cheaper than QuickBooks?

Xero's pricing starts at $29/month, while QuickBooks starts at $35/month. However, both have different features and plans that may suit specific needs.

Is Xero suitable for small businesses and large businesses alike?

Yes, Xero is a scalable accounting software that meets the requirements for all types of entities — single, small, mid, and large-sized.

Can Xero and QuickBooks handle multiple currencies?

Yes, both Xero and QuickBooks allow you to deal with multiple currencies. While Xero allows access to this feature in its Premium plans, QuickBooks includes it in its Essential, Plus and Advanced plans.

What is the pricing for Xero?

Xero offers three plans: Starter ($29/month), Standard ($46/month), and Premium ($69/month) plans.

What is the pricing for QuickBooks?

QuickBooks features 4 pricing plans: Simple Start ($35/month), Essentials ($65/month), Plus ($99/month), and Advanced ($235/month).

Can I upgrade or downgrade plans easily with Xero?

Yes, absolutely. Xero is a scalable and flexible solution. It grows as you grow and can downsize if you decide to downsize your team. It meets your requirements at the stage of the business you are in.

Do Xero and QuickBooks integrate with other tools?

Yes, both Xero and QuickBooks integrate with other tools. Third-party app developers can use Xero’s API to create custom integrations. Moreover, the Xero App Store has a tool for almost every job. On the other hand, QuickBooks is integrated with 750+ business apps.

Can you customize invoice settings in Xero?

Yes, you can. To customize, go to Xero and select your organization name. Then, choose Settings and click on Invoice Settings. Click ‘New Branding Theme,’ enter the theme’s name, and adjust the options as needed.

Which accounting software is easier to use for beginners?

Xero is considered easier to navigate due to its intuitive interface and minimal learning curve, while QuickBooks has improved but can feel overwhelming for some users.

Conclusion

The final decision to choose an accounting software should depend on your requirements and budget. Moreover, the option you choose has to be scalable and flexible so that when you grow exponentially, the software can scale up as well.

We at Alpha Pro Partners empower start-ups and small businesses with bookkeeping and accounting software implementation. We are Xero Platinum partners and are experts in using Xero, an accounting software that is continuously adapting itself to meet your needs. If you are looking for an expert team who treats your business like their own and takes care of everything accounting, we are here to support your growth.

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