Xero and QuickBooks are two popular tools that offer unique features for easy management of finances, accounting, and improving business productivity. QuickBooks is built for beginners that allows integration with many external apps and add-ons for any virtual business or industry. Conversely, Xero focuses more on teamwork and real time financial insight, thus, attracting businesses that prioritize collaboration and availability. In this blog, we will provide a side-by-side comparison of key features, differences, and similarities between QuickBooks and Xero, so small business owners can make an informed decision about which accounting software is right for them.
Read also: How to Pay myself in QuickBooks
What are the Basic Functions of QuickBooks and Xero?
QuickBooks and Xero are accounting software tools and they assist you with a number of tasks, for example:
- Tracking the money that comes in (revenue)
- Tracking the money spent (expenditure)
- Sending invoices
- Payroll processing (paying employees)
- Preparing reports
- Getting ready for tax time
Both the tools are widely used by small business owners, freelancers, and bookkeepers.
How Are They Similar?
Before unpacking the differences, let’s outline what these two tools share:
- Use: Both can be accessed online from anywhere; fee and cloud-based usage.
- Mobile applications: They each have phone and tablet apps.
- Bank integrations: Each software lets you pull in transactions from your bank.
- Invoicing: The two allow you to create and send invoices.
- Reports: You can create reports for things like profit and loss or balance sheet from both
While they do share some common basic features, they are significantly different in many ways.
Xero vs QuickBooks: Key Differences
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Pricing and Plans
Let’s begin with pricing.
QuickBooks has a few plans to choose from:
- Simple Start
- Essentials
- Plus
- Advanced
With each of those plans, more features unlocked and user access was provided, so the price goes up.
Xero, on the other hand, offers three primary plans:
- Early
- Growing
- Established
Xero’s cheapest plan limits the number of invoices and bills you can enter, while QuickBooks does not. On the other hand, QuickBooks must pay a premium for higher plans.
Read Also: How does QuickBooks calculate payroll taxes?
Which is better?
- If you invoice a lot every month pick QuickBooks.
- Whereas if your goal is fixed cost with unlimited user access then choose Xero.
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User Access
Then think about how many people will use the software. The number of users available in QuickBooks depends on the plan you subscribe to. Unlike QuickBooks, which limits the number of users you can have on a plan, Xero has no such limitations.
Xero is the more flexible option if you work with a team or want to allow your accountant access.
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Ease of Use
Both tools are quite user-friendly though, however they look and behave differently.
QuickBooks stands out for:
- Easy setup for beginners
- Educational tutorials and customer service
- If you are focused on the traditionally dashboards.
Meanwhile, Xero is known for:
- A clean, modern design
- A refreshing back-end experience
- An adjustment that takes longer to learn
Which is better?
QuickBooks might have a gentler learning curve to help beginners. Whereas, Xero might be more appealing to users who enjoy the modern software interface.
- Payroll Services
Another major difference between the two software is the payroll services. While, QuickBooks has a full payroll services plan that includes:
- Direct deposit for employees
- Tax filing and payments
- Access to tax forms like W-2s
On the other hand, Xero only provides payroll in specific countries such as Australia and the UK. Additionally, you need to connect a third-party app in the U.S.
Which is better?
QuickBooks is the more appropriate choice if you’re in the U.S. and need payroll.
- Customer Support
Being able to get help quickly can make a huge difference and QuickBooks offers several support options:
- Phone support
- Live chat
- A large online help center
Conversely, Xero does not provide phone support. Instead, you need to drop a line and wait for a response.
Which is better?
If you’d rather speak to someone or need quick help, there are more options available through QuickBooks.
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Special Features
Now, let’s look at some special tools available by each software.
QuickBooks Special Features:
- In built time tracking
- Mileage tracking log via mobile app
- Tracking inventory in higher-tier plans
- Also provides simplified tax filing through integration with TurboTax
Xero Special Features:
- Project tracking is available with all plans
- Automatic invoice reminders
- Very good tools for countries outside the US.
- Unlimited user access
Read also: How to create a one-time payroll check in QuickBooks Online?
Which One Should You Pick?
Here’s a quick way to make your decision:
Choose QuickBooks If:
- You are operating in the U.S. and require built-in payroll services
- You want quick access to phone support
- You prefer guided setup tools
- You need solid tax reporting and financial tracking
Choose Xero If:
- You want unlimited number of users without having to pay more
- You are a foreigner and own an international business
- You prefer a contemporary design and are fine with a slight learning curve
- Moreover, if you are okay with managing payroll services from another app.
To Conclude
Both QuickBooks and Xero are great small business accounting tools. They can assist you with money management, invoice processing, expense tracking, and tax prep. Although, your choice depends on your needs. Choose QuickBooks if you want built-in payroll, U.S.-based support and easy onboarding. However, if you have team and would like modern design with unlimited users, Xero is a better alternative.
Get in Touch with Us
If you are interested to know more about the key differences between QuickBooks and Zero based on their usage, need and affordability, we are here to help you through our dedicated customer service team. Fill out the customer response form or feel free to reach to us at support@qbhelphub.com . Our highly competent team is here to solve all your queries regarding QuickBooks.
