Xero vs Quickbooks: Best Pick for Small Business 2024

The Online plans start at $30 per month, whereas the Desktop plans must be paid annually and start at $492 per year. If your business needs many users to access your accounting data and requires low-cost inventory and fixed-asset accounting, Xero is the better choice. If you need comprehensive bank reconciliation, class and location tracking, good customer support, and easy access to local bookkeepers, then QuickBooks Online wins. This takes into account customer management, revenue recognition, invoice management, and collections.

Intuit released QuickBooks in 1992 and its cloud-based version, QuickBooks Online, in 2001. Both applications are easy to use, and users can easily see results from the dashboard. In addition, the ability to integrate with ecommerce accounting solution A2X is important. Both Xero and QuickBooks integrate with A2X, which is critical for ecommerce sellers.

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Both Xero and QuickBooks Online offer excellent integration with hundreds of apps. Its data-entry screens are more minimalist than those of QuickBooks Online, and its invoice and billing entries require less in the way of data entry. For those moving their small business’ accounting over from another application, you can import data into QuickBooks Online using the Import Data function. Xero’s main entry screen uses a menu bar at the top of the screen for access to system functions.

  • Xero also integrates with other business applications, such as payroll and inventory management systems.
  • A better comparison is the $60 QuickBooks Essentials plan (plus the $45 Core or $80 Premium payroll plans) vs. the $37 Xero Growing plan (paired with the $40 or $80 Gusto plan).
  • A cloud accounting tool is one of the most powerful contributors to the day-to-day running of a company.
  • If you pay VAT, work with suppliers or are a growing business, you can take your pick from Essentials (up to 3 users) or Plus (up to 5 users).

To help you determine how both tools stack up, here is a head-to-head comparison chart featuring pricing and other capabilities. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development. Before joining the team, she was a Content Producer at Fit Small Business where she served as an editor and strategist covering small business marketing content.

We encourage you to research and compare multiple accounting software products before choosing one. You can do a lot with QuickBooks Online, but all the options may feel like information overload starting out. Both accounting software products let users invite their accountants by email. If you’re located in the United States, though, there’s a better chance your accountant is familiar with QuickBooks Online than Xero.

Inventory management features help you track and manage the items you have in stock. This makes Xero the favorite for large businesses with more than 25 users and small businesses that need several users on the account. You probably noticed from the above summaries that Xero and QuickBooks sound pretty similar. They’re both strong solutions that meet all of the standard accounting needs and offer lots of extras. QuickBooks was developed by Intuit, a company founded in 1983 that also owns financial software like TurboTax and Mint.

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While there used to be some challenges with Xero’s bank syncing, it has now become as seamless as QuickBooks Online. Similarly, Xero boasts a user-friendly dashboard that aligns with its minimalist design approach, consistent with the rest of the platform. Both QuickBooks and Xero provide user-friendly dashboards that how to find the best tax preparer near you offer a convenient overview of your key business metrics upon logging in. Your preference between the two will likely depend on the user interface that you find most enjoyable. SaaS and other subscription-based businesses have their own financial challenges, like managing recurring billing and revenue recognition.

Xero vs QuickBooks: Key Differences & Which Is Best for You 2024

All QuickBooks pricing packages include automatic expense importing and categorization. You can also take photos of receipts and upload them from the mobile app. QuickBooks will automatically match receipts to recorded expenses or generate new expenses accordingly. We were especially impressed with Xero’s built-in Gusto payroll integration.

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However, QuickBooks’ second-tier Simple Start plan packs more tools than Xero’s second-tier Growing plan. Both Xero and Quickbooks Online let you scan your receipts and bills for more efficient handling of your income and expenses. They also enable bank reconciliation for seamless expense and bill management.

Ease of setup and use

Actual users express high levels of satisfaction with Xero’s customer service, while QuickBooks has received poor user feedback. You can add products, track what you have in stock, see what’s selling, and add item details to invoices. But Xero lacks some inventory features that QuickBooks has, like low-stock alerts, more advanced sorting of item types, and deeper analysis of sales. You can connect invoices, expenses, and transactions to individual projects, pull reports to see the project’s profitability and identify invoices that need to be sent and non-billable time.

Plus, you can import up to 12 months of transactions when you first use Xero, so you’re not starting from scratch. Both Xero and Quickbooks integrated with Wise which means that you can use your Wise multi-currency account to automate international transactions and sync them to your accounting records. In this guide, we’ll compare Xero and QuickBooks head to head, looking at the pros and cons, features, fees and much more. Every business needs a good system for its accounts, from the smallest startup to the biggest multinational − not to mention freelancers.

What QuickBooks Online offers

The Contacts category lets you manage all contacts, from customers to suppliers to contractors, from one location. Reporting in Xero is solid, with a variety of financial statements and management reports available. QuickBooks Online, an offshoot of the popular QuickBooks Desktop application, is a good fit for small and growing businesses. The essential guide to set up a company in Ireland, including how to register, choose a legal business structure, costs and much more. With QuickBooks, you can connect any bank account to the platform provided that the bank is supported under the Open Banking regulations.

Accounting software for your business can be an invaluable tool for managing your expenses, monitoring your financial health, paying taxes, and more. Xero is the go-to choice for rapidly growing businesses and startups because it scales well with them. Meanwhile, solopreneurs and small business owners will find QuickBooks Online more suitable.

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