Xero vs QuickBooks Online: Features Comparison, Pros, Cons

08 Ago Xero vs QuickBooks Online: Features Comparison, Pros, Cons

The Established plan also supports a multi-currency function, which converts 160 different foreign currencies into your business’s local currency. Danielle Bauter is a writer for the Accounting division of Fit Small Business. She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor’s degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about business for various consumer publications.

Banking: QuickBooks Online Wins

Xero offers three pricing tiers, ranging from $9 per month to $60 per month. As we talked about earlier, QuickBooks is a great low-cost choice for freelancers and small businesses, while Xero is popular with growing startups. Xero makes it simple to categorize money in and out with its chart of accounts. Xero’s support and learning portal, Xero Central, offers access to a searchable database categorized by topics like ‘Inventory’ or ‘Reporting and Tracking,’ among others. Resources include how-tos, explainers, and professional development courses.

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1. The software must have tools to track time, record billable hours or expenses, send invoices for progress billings, or monitor project progress and performance.
2. QuickBooks is a great bookkeeping solution for freelancers, small to medium businesses, and companies that want a full product suite.
3. If you upgrade to at least the Essentials plan from QuickBooks, you can enter employee time by client or project and automatically add that time to invoices.
4. Both services do offer an app marketplace, for both in-house mobile apps and integrations or extensions offered by third-party services.

We collect the data for our software ratings from products’ public-facing websites and from company representatives. Information is gathered on a regular basis and reviewed by our editorial team for consistency and accuracy. Just keep in mind that unlike the inventory feature in QuickBooks Online’s higher-tier plans, Xero doesn’t let users set up reorder points that flag when stock is running low. Can support larger small businesses with dozens of employees; highest-tier plan includes 25 users.

Feature comparison of Xero vs. QuickBooks Online

It offers plenty of customization options, which can be a great deal for those wanting to present and maintain a professional brand image. On the other hand, Xero lets you add your company logo and edit fields, but you can’t change the invoice colors. We are driven by the Fit Small Business mission to provide you with the best answers to your small business questions—allowing you to choose the right accounting solution for your needs. Our meticulous evaluation process makes us a trustworthy source for accounting software insights. We don’t just scratch the surface; we immerse ourselves in every platform we review by exploring the features down to the finest nuances.

Best Small Business Accounting Software in 2024

Xero offers simple inventory tracking software that can track up to 4,000 finished items. With Xero, you can view the number of items you have available and see the total value of stock on hand for any item. Its inventory management reports will show you how well different items are performing and which ones are the most profitable.

Some businesses may rely on those features, however, particularly if they opt for top-down oversight that requires greater control. This is because QuickBooks offers an add-on specifically for time tracking, starting at $20 per month (plus $8 per user), while Xero bundles time tracking with its expanded accounting equation principle explained main service. If you need to give accounting access to more than five people, Xero could be the better option for you. QuickBooks Online’s most popular Plus plan tops out at five users; its highest-tier Advanced plan allows up to 25 users, but that plan is expensive at $235 per month.

Xero vastly outperforms QuickBooks in its fixed asset management tools. With QuickBooks, you can record the purchase of a fixed asset, but with Xero, you can track fixed assets, calculate and track their depreciation, and much more. Xero also offers stronger tools for tracking project profitability, giving you access to real-time reports.

Ironically, we don’t recommend this plan to freelancers due to its lack of tools, even though we do recommend QuickBooks as the best accounting software for the self-employed. QuickBooks Online and Xero are well-known cloud-based business accounting software solutions that are a favorite of growing companies due to their affordable pricing and scalability. These systems provide accounting features such as invoicing, accounts payable and receivable, and inventory management to help your business stay organized and profitable. QuickBooks was created in 1983 by Intuit, garnering nearly 40 years of development behind it. A New Zealand-based company launched Xero in 2006 to challenge the growing accounting software market. Intuit also offers QuickBooks Desktop versions for companies that require it, but we will compare the Online version in this guide.