Xero vs QuickBooks: Which is best for Small Businesses in 2023?

Choosing the correct accounting software for your small business might be challenging.

Combining invoicing software with a general ledger to a point-of-sale system with inventory management can quickly become highly sophisticated. There is, however, a method to make things easier by utilising the appropriate software for your individual needs.

Accounting technology that is up to date is not an option; it is a need. 91% of accountants say it has increased their productivity.

In this article, we will compare two of the most popular company accounting software programs today: Xero and Quickbooks. As we assess which option is ideal for small businesses, we will examine some of the most significant features and discuss the distinctions between these two options.

You will be able to rapidly choose the application that is appropriate for your needs if you understand how various accounting software functions.

This post contains affiliate links. If you click on a link and make a purchase, we may earn a commission at no additional cost to you.

Which is the Best Business Accounting Software, Xero vs QuickBooks?

Let’s start by examining the two types of software individually.

About Xero

Since its 2006 New Zealand founding, Xero has solidified its position as one of the best accounting solutions. The essential thing you need to know about Xero is that the application makes accounting slick and pleasurable. Its motto is “Beautiful business.” Through its accounting tools, Xero is made to assist its users in succeeding in their businesses. It is effortless, powerful, and user-friendly.

To compete with QuickBooks Online, Xero has a compelling value proposition: its users love it. Xero regularly has higher ratings on average than QBO despite having fewer reviews overall. Xero also tends to be more well-liked among startups than QuickBooks, thanks to its youthful brand image and emphasis on simple usability.

About Quickbook Online

The industry-leading accounting programme from Intuit, QuickBooks Online, provides “Smarter business tools for the world’s hardest employees.” Businesses can manage bills and invoices, track projects, and even automatically track mileage with a smartphone thanks to its cloud-based technology, which also streamlines many of their monotonous duties and procedures.

We can see why QuickBooks claims that 98% of clients think that their solution makes it easier for them to manage their businesses on their website: there’s a good reason why QBO has established such a strong reputation.

In comparison to Xero, QuickBooks has been on the market for longer, is far more developed, and is well-liked among accountants, particularly in the US market, where QBO has dominated. In the US, QuickBooks is thought to hold an 80% market share. According to QBO, consumers save $3,534 in taxes on average each year.

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When to use each

Xero

  • Fixed asset companies: Xero is unique because it features a fixed asset manager that records and calculates depreciation on your machinery and equipment so that you may claim the correct gain or loss when you sell the asset.
  • Small companies on a budget: Small firms who find QuickBooks too pricey migrate to Xero, which provides many of the sophisticated capabilities available in QuickBooks Online Plus at a cheaper cost.
  • Businesses with multiple users: If you have a team of in-house accountants or a business partner working on your accounts, you may add all of them to Xero for free. QuickBooks Plus, the most popular subscription, has a maximum of five users.

Quickbook Online

  • Businesses that require manual bank reconciliation: Xero mandates uploading a bank statement to execute a bank reconciliation, but QuickBooks is one of the few software packages we’ve tested that allows you to reconcile a bank account without importing your bank activity.
  • Businesses that require live customer support: QuickBooks provides live customer service by phone and lives chat, but Xero does not. To address a problem with Xero, you must email customer support or use online resources.

Our Rating

  • General
    Xero: 9.8
    Quickbook: 8.6
  • Banking
    Xero: 9.1
    Quickbook: 10
  • Accounts Payable
    Xero: 9.65
    Quickbook: 9.8
  • Accounts Receivable
    Xero: 8.7
    Quickbook: 9.75
  • Inventory
    Xero: 9.75
    Quickbook: 9.75
  • Project Accounting
    Xero: 10
    Quickbook: 8.5
  • Sales, BAS and Other Taxes
    Xero: 9
    Quickbook: 8
  • Fixed Assets
    Xero: 8.5
    Quickbook: 1
  • Reporting
    Xero: 9.8
    Quickbook: 10
  • Customer Service
    Xero: 3
    Quickbook: 6
  • Mobile App
    Xero: 5.25
    Quickbook: 6

Xero Pricing Plans

All Pricing Plans cover the Accounting Essentials, with room to grow.

Prices at December 2022

Xero Pricing Plan by SCS Media

Xero online plans have a 30-Day Free trial.
There are three options available:

  • Starter AUD 29.00
  • Standard AUD 59.00
  • Premium AUD 76.00

Quickbook Pricing Plans

All Pricing Plans cover the Accounting Essentials, with room to grow.

Prices at December 2022

QuickBooks Pricing Normal Price Plan by SCS Media

QuickBook online plans are presently 50% off for the first three months. There are three options available:

  •  AUD 12.50 for 3 Months or $25
  • AUD 18.50 for 3 Months or $37
  • AUD 27.50 for 3 Months or $55

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Which is the Best Accounting Software between Xero vs Quickbooks?

Let’s now side-by-side compare the features of the two products.

Xero vs QuickBooks: Reporting

Xero

Xero delivers Accounting Reports that are up to date. Accurate accounting reports can help you keep track of your finances. And work in real-time with your adviser online.

  • Get the reports anytime online.
    View and share a range of reports
    Drill down into the details with interactive reports and measure specific KPIs.
    Set them up on your favourites list for quick access.
  • Customise your reports, save them in your favourites, and decide how to present the data in each report.
    Add, remove and record rows and columns by dragging and dropping.
    Add formulas, details and notes to reports and link to report schedules.
    Add tracking categories to see how different business areas are performing.
  • Compare and calculate budgets versus actuals.
    Use IF statements in formulas as well as mathematical operators.
    present results as percentages with business reporting software.
  • Reports will make you understand your Business to support decision-making moves.
    Run simple, easy-to-use, built-in reports.
    Make more informed decisions with financial reporting.
    Share and discuss reports and metrics with your advice or accountant.
QuickBooks

Always be aware of where your company stands.
Quickly develop customizable financial and accounting reports using QuickBooks.

  • Get the reports anytime online.
    Your QuickBooks dashboard lets you get real-time small company insights from financial records such as income statements and balance sheets. A cash flow statement may also be used to track what comes in and what goes out. Every business is unique. Customize your reports to view the information that is most important to you.
  • Customise your reports, save them in your favourites, and decide how to present the data in each report.
    Make a professional overview of your finances and small company data and share it with business partners. Customize your reports with the most critical information, and keep your accountant up to speed with email updates.
  • Compare and calculate budgets versus actuals.
    Accounting reports like the Customer Balance Summary and Accounts Receivable Aging Summary will help you keep track of your open invoices, customer balances, and past-due amounts.
  • Reports will make you understand your Business to support decision-making moves.
    QuickBooks provides a range of financial reports that give you a view of the many sectors of your business. The balance sheet, profit and loss statement, invoices and received payments, and many more reports are included. Share and discuss information and metrics with your advice or accountant.

Xero vs QuickBooks: Ease of Use

Xero

Xero and QuickBooks provide essential features that allow you to understand your company’s various processes.

Xero allows customers to make changes to purchase files in seconds. It also offers customers preset templates and the option to brand or customise their own. Fill out the required fields, and you’ll be ready to go.

The primary app, Xero Accounting, provides a condensed version of what is available on the internet. You go from one section to another by clicking the bottom-of-the-screen icons: Dashboard, Sales, Purchases, and Contacts.

Xero provides three Android and iOS applications. One is a website mobile version. Following that is an app for workers who need to submit expenditure reports. The third app is for project management.

The Dashboard shows account balances, sales and buy totals, monthly profit, and cash in/out chart.

Xero Expenditures, the second mobile app, is intended for workers who need to submit reimbursable expenses but do not require access to the leading site. Employees may use this software to photograph receipts using their smartphones. In the browser-based version, Xero extracts relevant data from those receipts and deposits it on expense receipts.

In conclusion. Xero employs artificial intelligence and other automated techniques to simplify, organise, and speed up accounting activities. Thanks to recent invoicing, reports, and online assistance enhancements, it is now a terrific alternative for small businesses.

QuickBooks

QuickBooks also summarises profit and loss, spending, bank accounts, bills, sales, and other vital information. Its layout delivers a straightforward interface with an intuitive and user-friendly dashboard. The Xero interface, on the other hand, may be problematic for specific users, particularly those who are new to it.

Intuit’s QuickBooks Android and iOS applications don’t mimic all of the functionality of the browser-based version. Still, they give enough abbreviated tools to complete your accounting job, especially considering modifications made to the apps two years ago. For example, the content and navigation systems have been restructured, and contact records now include historical data and buttons that allow you to immediately phone or email the contact.

Xero vs QuickBooks: Features and Integrations

When it comes to app integration, the programmes are incredibly similar. Xero and QuickBooks have comparable capabilities in that they interact with hundreds of programmes (750+ for QuickBooks and over 1000 for Xero), allowing businesses to continue using third-party software.

Xero vs. QuickBooks: Customer Support

Regarding helping, QuickBooks includes a customer phone number that may be called if there are any issues. If you need help immediately, their website offers live chat and email support.

Xero accounting software offers limitless online help but does not have a phone number. Instead, their support staff can contact you directly if you require particular assistance. They also have the power (with your express permission) to access your accounts and troubleshoot your issue.

Xero vs QuickBooks: Invoicing & Payments

Businesses that switch to online accounting and billing are virtually always happy with the choice, and many go on to explain it to others. The time-consuming procedures are automated, current data is always accessible, and online exchange with your bookkeeper or accountant is straightforward.

Everything is securely recorded online, which makes keeping track of things more manageable. When you need to find something, it’s simple to search in one location and Invoices, and Documents don’t go lost.

Your accounting system automatically changes when invoices are sent, and payments are received by preventing the chance of double data entering.

You may use a template in Xero to automatically generate new invoices or quotations with your logo, name, contact information, payment conditions, and methods.

On the other hand, Xero expenses may be managed right away from the main page using a straightforward menu. Once you click on it, a list of payment options opens so you can finish the task. With this in mind, businesses needing to process more monthly payments could find Xero an excellent choice.

Companies that utilise external suppliers to pay regular bills, prepare and send invoices automatically, and pay staff monthly could find Xero a preferable option.

Subscription management software is necessary for such payments, just like any other service that processes payments. As a result, company owners must register with an outside supplier like Stripe or PayPal.

Xero vs QuickBooks: User-Friendliness

Since QuickBooks has more features and options, it can require some time to learn how to use the user interface.

The user interface of Xero is simpler to use and has more transparent workflows. People frequently like Xero’s dashboards since they make it easy for them to submit invoices and bills.

Features to look for when choosing the right business online accounting software.

When selecting the best company accounting software, consider the characteristics listed below. While some may be included as standard features with the solution you choose, others are add-ons to improve the solution’s suitability for your company’s needs.

Allow for integration between business and financial data

The primary reason you use such software is the integration between your company and financial data, such as bank accounts, credit cards, and PayPal. To avoid the difficulty of working with outdated data, which might result in mistakes, it should appear in real-time.

If your invoices, receipts, and reports aren’t correct, creating them is no use. You may be sure of better outcomes by selecting software that enables more integration with your financial and business data.

You may also shorten processes and save time by integrating your accounting software with other platforms. Find out if the solution you’re considering integrates nicely with other programmes, like project management tools, CRM systems, payroll software, and GST or Sales Tax reporting functionality.

Is it quick to get started?

The phrase “configuration from hell” may be familiar to you. This describes a circumstance in which you cannot make anything function because a necessary component is either absent or improperly set. It’s not fun, and it may become a nightmare for some small businesses.

The setup procedure can be completed eventually, but it can take too much time and effort on your part. To avoid going through this excruciating process, selecting an accounting software system that includes preset functionality is crucial.

For example, an option to select a set of pre-General Ledger Codes that can identify with your particular sort of business. It can be Electricians, Manufacturers, Shops, Importers and so on.

Connect with Suppliers and Customers online

Through SaaS-based accounting software, you must be able to communicate in real time with your clients and suppliers. For instance, your programme should be able to execute requests to check your bank balance or place purchases online through their back office.

Clients should also be able to log in and examine invoices or purchase histories to make payments easily. Because it enables real-time communication between you, suppliers, and consumers, the appropriate software is the way to go.

The ability to generate group reports in an instant

Aside from the reports you request, your accountant must also examine some of them. Accurate reports can save you money on accountant costs since the accountant spends less time on them. The best corporate accounting software should offer group reports so that everyone gets their data quickly and saves time on generating them separately.

By removing the need to generate reports one at a time, group reports save you time and effort. You will also be able to compare this year’s reports to previous years, showing the similarities and differences that have occurred.

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Allowing for multiple views and multiple/unlimited users

With many users and views, you don’t have to transfer between user accounts whenever you need detailed information on your business finances because it’s all in one handy platform.

Users should be able to create new tasks or execute modifications as needed, eliminating the necessity for manual data entry into Excel spreadsheets, which only generate confusion when utilised by more than one person at a time.

Access to the appropriate number of users (together with the appropriate permissions) can also help avoid data input errors and save time while updating reports.

Implementing a system that’s easy to navigate

When attempting to manage a business, you have more vital jobs than working out the intricacies of the chosen software.

This is why your software supplier should have made (and should continue to make) an effort to make their platform so user-friendly that navigating through it is a piece of cake, even for beginners who know nothing about business accounting solutions.

It should be simple enough for beginners in accounting or finance to comprehend everything at first sight and start using it right away, with no need for extra training sessions.

After all, we’re only trying to save money and make our lives simpler so we can spend more time with our families.

The capacity to show data in a form that facilitates rapid and straightforward business analysis.

The most effective business software should provide data import and export in any format so you may choose the one that best suits your requirements.

Whatever service or product your company sells, as long as the accounting software includes tools to assist you properly managing it, it doesn’t matter.

Dynamic visuals, charts, reports, and on-demand data on the general advancement your firm is making every day, month, and year can help you comprehend its success at a glance.

Working capital management tools aid in cash flow management.

If you don’t have enough working capital to finance your business, it won’t function smoothly, so you need a system to help you manage your cash flow as effectively as possible.

This includes producing papers for suppliers so that they may be paid instantly and allowing clients to pay bills on time and without delays.

If required, the best solution should allow users to take online payments or build specific payback plans with their consumers.

This will guarantee that everyone receives their appropriate money, making this phase of the process easier for all parties involved.

Security precautions are in place to secure data integrity and ensure accurate information presentation

Because you are entrusting your company data to your software supplier, you must ensure that their security procedures are adequate.

If something goes wrong, the best tools should include 24/7 technical assistance and a direct contact channel so that any necessary adjustments may be made instantly.

In addition, the system should have numerous backup alternatives accessible in case one of them fails, safeguarding your data from unexpected events that might occur when utilising these digital services.

Cloud accounting software to save time and money

The last thing you want to do is pay for an on-site server that will take up space at your workplace and necessitate additional training sessions for your IT team, who need to learn how to manage it properly. This is because setting up such a system and ensuring it continues to function over time is highly complicated.

The fact that several users may access the data simultaneously from various places while only requiring an internet connection makes cloud services so practical.

Therefore, no additional equipment or personnel training is required.

Can scale with your business as it grows

Your needs in how you oversee your business’s operation will change as it develops.

Regardless of how big or tiny your business is, the accounting software you use should support this kind of development so that it may expand with you without endangering people or adding to your costs.

Having all the bells and whistles is useless if a steep learning curve will make things worse rather than better.

Software-connected inventory management systems that streamline transactions

Although the integration has previously been covered, inventory management tools need to be specifically mentioned. If you don’t have a system that always gives correct information on inventory levels, you can’t manage your business effectively, whether you’re selling tangible goods or offering services.

This entails understanding how much of a product has been sold or consumed and whether there is sufficient stock to fill incoming requests.

To ensure that your company never loses track of what has to be reordered first, the finest technologies should enable automatic updating of these facts through linked devices across the network.

Simplifies the handling of bank transactions and account reconciliation

It might occasionally be challenging to reconcile bank transactions. With the correct software, keeping track of your financial activities, dealing with bank statements, and handling other pertinent data becomes much more straightforward.

You need a system that can quickly assist bank reconciliation when transactions are involved if you want to ensure everything is in order. There are no errors or issues with how your firm handles its finances.

The programme should provide easy access to your financial details to guarantee that no human entry is required.

Other Factors To Consider

Finally, there are some more aspects to take into account. One of them may be the capacity to produce as many invoices in a multi-currency format as necessary.

Small company owners’ demands will alter as they grow, and interacting with clients from other countries can be something to consider. While the initial software design of your pick may be enough, you should keep these concerns in mind as you grow.

Conclusion and Comment

For small firms, Xero and Quickbooks are both excellent accounting programmes. They both include features that can facilitate managing your firm and increase its long-term profitability.

You may select the finest Xero vs Quickbooks accounting software for your company by being aware of what you need from your business software and how it must satisfy these demands.

Having the appropriate software in place may ensure your business runs smoothly, which is ultimately what matters.

This post contains affiliate links. If you click on a link and make a purchase, we may earn a commission at no additional cost to you.

Do you have any practical tips for Xero or Quickbooks? Want to share them? Tell us about them below if you do!

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Latest Update on November 10, 2022

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Beat B. Süess
Beat B. Süess

I am a professional web designer who loves to help others and go above and beyond with every project. I love to delve into my clients' problems and solve them with modern technology.

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