Xero v QuickBooks Online 2023 Feature Comparison

Xero also has inventory management, but it’s not one of its core functions. QuickBooks is available both online and via desktop and is ideal for businesses that outsource their accounting tasks to a bookkeeper or accountant. This is because QuickBooks only allows up to 40 users for its highest-tiered plan, and even then, some plans require every user to pay for their key irs forms and tax publications for 2021 own account. Xero is ideal for businesses that keep a team of bookkeepers or accountants in-house. Has robust reporting tools and report customization options, invoicing for an unlimited amount of clients, inventory tracking in higher tier plans, plus a capable mobile app. To sum it up, both Xero and QuickBooks Online are attractive accounting software options.

On the other hand, Xero offers a mobile app for tracking time and projects. ZipBooks offers a full range of customizable financial, accounting, sales, expense, and even team reports that you can export or print as PDFs. Results are displayed in a beautiful and intuitive way, grouped how you need it, (whether by category, customer, vendor, or time) so that you can see what’s going on at a glance. Time periods on reports go from earliest first and move forward in time.

Xero’s Early plan gives you 5 bills and 20 invoices and only offers unlimited invoices and bills starting in their second product tier. QuickBooks is a great bookkeeping solution for freelancers, small to medium businesses, and companies that want a full product suite. QuickBooks has a more complex interface with a higher learning curve best suited to those with accounting experience or who are willing to hire an experienced accountant. Most bookkeepers are familiar with QuickBooks software, so it’s easy to find someone to assist with your accounting needs. On the other hand, Xero has more than double the integrations as Quickbooks, with over 1000 tools to add to your online accounting software.

  1. Xero is a better option for businesses that need to track project profitability.
  2. Fixed asset accounting is part of all Xero’s plans, while it’s offered only in the most expensive plan of QuickBooks Online—Advanced.
  3. Kelly Main is staff writer at Forbes Advisor, specializing in testing and reviewing marketing software with a focus on CRM solutions, payment processing solutions, and web design software.
  4. Xero offers simple inventory tracking software that can track up to 4,000 finished items.
  5. QuickBooks and Xero are two of the best accounting software options with a range of pricing plans to fit multiple budgets.

Help is accessible from any data-entry screen, and a demo company is available for those who want to enter practice transactions without worrying about messing up their own data. All of these things can cause extreme frustration, and you’ll need the assistance of product support to solve these problems. QuickBooks Online, an offshoot of the popular QuickBooks Desktop application, is a good fit for small and growing businesses. To make the decision a little easier, we’re comparing Xero and QuickBooks Online, side by side based on features, pricing, ease of use, and more. Many or all of the products featured here are from our partners who compensate us.

One outstanding element of Xero is the number of available third-party integration tools across a wide range of industries and categories. This level of expansion can make up for Xero’s limited options for reporting and customization. Whether you’re just starting or have already established a robust company, knowing where you stand financially is essential for running a business. Reviewers were quick to share how much they enjoyed the software’s availability, performance and scalability. We were hard-pressed to find any negative reviews, and the one or two so-so reviews we did find were quick to say that while there were a few things that could be improved upon, Xero is great overall. Quickbooks Online (QBO) is a personal and business bookkeeping software developed by Intuit in the early 2000s to help small businesses with their bookkeeping systems.

Customer support

QBO also lets you add sub-customers that are listed under a parent customer, if you have, for example, bills that you send to different departments of one particular company. Xero Limited was created in 2006 in New Zealand, with a focus on cloud-based business accounting software. Xero holds the highest market share in Australia, New Zealand, and the UK. While QuickBooks Online’s features tend to be a bit more powerful and extensive, the differences aren’t a dealmaker or dealbreaker. QuickBooks Online does offer more reports, though it depends which plan you pick.

Features: QuickBooks Online Wins

While both are very similar, these two products have exclusive benefits that set them apart. In this guide, we will explore the key differences and declare our respective winners in each category. QuickBooks https://intuit-payroll.org/ Online’s customer support is better than Xero’s since you can interact with an agent through a phone call. You can’t initiate a call, but you can submit a ticket and wait for an agent to call you.

App developers can use the QuickBooks API to integrate their products with QuickBooks Online and showcase them to small business owners. The QuickBooks API client gives developers access to their customers’ data via a REST-based API that works with QuickBooks Online. Businesses with inventory items should choose accounting software that can track inventory costs, manage cost of goods sold (COGS), and monitor inventory units.

Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. I have learned never to underestimate the importance of live product support, particularly when it comes to managing my money. Another benefit is that QuickBooks Online is better for small businesses, as you’re able to scale with your growing company.

Pricing & Packages

On the flip side, there are some complaints about limited income and expense tracking categories. If your business has varied operations, you might prefer QuickBooks, as it offers more flexibility in tracking financial activities. For instance, you can track income and expenses by classes and locations. 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.

But, even though they have a relatively similar pricing style, what each package contains can differ quite a bit. Now, let’s talk a bit about the differences between these two accounting software giants. Xero and QuickBooks represent two different types of businesses within this industry. Filter your list to see customers, vendors, or only active or archived contacts. This dashboard includes key information, but it doesn’t allow you to drill down into every section to take a closer look. While this is a pretty minor inconvenience, it speaks to the application’s slight lack of user-friendliness.

The software must have tools to track time, record billable hours or expenses, send invoices for progress billings, or monitor project progress and performance. QuickBooks Online didn’t used to have fixed asset accounting features, but they’ve been recently added to the highest tier, Advanced. Now, just like Xero, QuickBooks Online, allows you to record a fixed asset purchase, track the asset, and calculate depreciation. However, we want to emphasize that Xero offers fixed asset accounting in all its plans, making it an affordable QuickBooks alternative for fixed asset management. Xero is more affordable and scalable than QuickBooks since all subscriptions have unlimited users.

Where do Xero and QBO fall short?

The bank reconciliation module must also let users reconcile accounts with or without bank feeds for optimal ease of use. One user expressed that they like that QuickBooks has more robust accounting features than most competitors. Some also explained that QuickBooks offers excellent expense-tracking features. We agree with this, and one of the features we like is that QuickBooks remembers the categories of items that have been entered previously. Additionally, you can create explicit rules to help QuickBooks correctly classify transactions automatically. We have an extensive history of reviewing small business accounting software, and we stay up-to-date with the latest features and enhancements.

Seamlessly integrate data from either system with info from your CRM or other tools and build a forecast model that gives you real insight into your business. Although choosing an accounting software based on price alone probably isn’t wise, it can help prevent you from getting more functionality than you need. But hopefully this has started to give you a good idea of which accounting software might be the best for your business. Another difference is that Xero doesn’t allow you to group your report by customer or vendor the way QBO does. You can even group by product or service, date created, or amount with QBO. Both Xero and QBO offer automatic transaction feeds when you connect to your bank.

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