QuickBooks vs Xero – Which is Better For Your Business?

We'd argue that Xero is better than QuickBooks. It offers all the core accounting software features a small business is likely to need, plus Xero is slightly less expensive and offers unlimited users.

Still, the top choice may depend on your specific business needs – QuickBooks does offer more features than Xero, which may make its slightly higher cost perfectly defensible for some businesses.

Here's how the two accounting software services stack up against each other.

QuickBooks vs Xero: Top Features Comparison

QuickBooks and Xero both offer a lot of features, including all the core abilities a small business needs from its accounting software.

Here's a look at how both services tackle their top features.

In this guide:

• QuickBooks vs Xero: Top Features Comparison
• QuickBooks vs Xero: Pricing
• QuickBooks vs Xero: Ease of Use
• QuickBooks vs Xero: Customer Service & Support
• More about QuickBooks Online
• More about Xero
• QuickBooks vs Xero: The Verdict

Invoicing and Payments

QuickBooks supports custom invoice templates, and lets users track the status of the invoice with read receipts. If needed, users can easily send customers reminders, and can match any payments received with the correct invoice for efficient bookkeeping. Users can add their logo to their invoice templates as well.

Xero also lets users send quotes and estimates with modifiable templates that can quickly pull up data on contacts, inventory, and pricing. Alerts can be set to ensure no invoice slips through the cracks. Additional automation abilities let users select inventory items from a preset list, quickly duplicate a previous invoice, or set up automatic invoices for repeat orders. Plus, read receipts let users know when customers have seen an invoice and if it’s been paid.

Inventory Tracking

QuickBooks offers inventory tracking with its Plus and Advanced plans, though not through Simple Start. Users can track individual products and the value of their goods, and receive notifications when inventory is low. Managers can easily generate purchase orders when needed, and can manager vendor information from a single location. Inventory data can be imported with Excel and synced with Amazon, Shopify, Etsy, and more.

Xero's inventory features (available with all plans) allow business managers to track the profits of each product line, letting them spot the most popular or profitable items. The data can then be used to inform decisions like what to stock and how to change pricing. Stock levels and the value of your goods can be automatically tracked, photos can be uploaded for each item, and supplier contracts can be added for extra documentation. Items can be bulk-imported with a CSV file, and inventory data is fully integrated with other accounting categories, including quoting, invoicing, and ordering.

Expense Tracking

All of QuickBooks' plans let users track their expenses, sorting each one into the correct tax categories. Users can even take photos of their physical receipts, which the software automatically matches to existing expenses. Transactions can be imported from bank accounts, credit cards, or third-party services like PayPal and Square.

Xero doesn't cover expenses with its Early and Growing plans, but does offer a raft of expensing abilities with its Established plan. Employees can scan receipts to record and track expense claims, slotting each expense into the best category for a report. The Established plan also supports a multi-currency function, which converts 160 different foreign currencies into your business's local currency.

Time Tracking

QuickBooks offers an add-on specifically for time tracking, called TSheets by QuickBooks. It's feature-heavy and available in two plans: Premium, for $20 per month plus $8 per user per month; and Elite, for $40 per month plus $10 per user per month. Premium includes scheduling for jobs and shifts, real-time reporting, custom alerts, and time-off management. Elite offers all of Premium's features, plus a project activity feed for better control, project estimates that can be easily compared with actuals, geofencing, and support for timesheet signatures.

Xero's time tracking features are built into its main service. Users can simply download the free Xero Projects app on iOS and Android, using it to record time and costs, as well as seamlessly and automatically feed the data into invoices and reports.

Overall, the cheaper cost of Xero's time tracking abilities is likely to make them the more appealing option, even if QuickBooks includes more features. Some businesses may rely on those features, however, particularly if they opt for top-down oversight that requires greater control.

Payroll Processing

QuickBooks offers employee payroll software as a separate tier of plans: there's Payroll Core, for $45 per month, plus $4 per employee per month; Payroll Premium, for $75 per month, plus $8 per employee per month; and Payroll Elite, for $125 per month, plus $10 per employee per month. Core offers the basics, while Premium adds same-day direct deposit, role-based access, and auto time tracking. Elite also adds tax penalty protection, and a dedicated pro to help set up and troubleshoot.

Similarly, Xero does not bundle payroll services with its core plan. Unlike QuickBooks, however, it has teamed up with a third-party payroll software, Gusto. Get both, and you'll be able to use single sign-on – and get the first two months of Gusto free. Afterwards, plans start at $19 per month, plus $6 per employee per month for the Basic plan, though you'll need to shell out for the $39 per month, plus $12 per employee per month plan – called Complete – to get useful features like time management tools and next-day direct deposit (rather than four-day).

Tax Tools

All QuickBooks plans can let businesses track sales tax and manage 1099 contractors, with the exception of the Self-Employed plan, which instead helps freelancers estimate their quarterly taxes. In addition, all plans offer tax deduction maximization tools, making it easy to let an accountant see the books, and allowing all users to export documents, group income, or expenses by tax category, and automatically sort each new expense into the right tax category.

Like QuickBooks, Xero has a function to automatically calculate sales taxes for each invoice, as well as state or city taxes. A tax default can be set for any purchases, and Xero offers an integration with Avalara TrustFile in order to help users file their returns. Xero's software also lets users map their accounts to different categories of tax form, keeping everything organized.

Integration with Other Software and Apps

Xero Integrations

Xero offers far more third-party integrations and extensions than QuickBooks. The Xero App Marketplace has over 800 apps and keeps adding more, covering categories including CRM, invoicing, inventory, time tracking, ecommerce, and more. Xero also offers ten in-house apps that can help users access its features on their mobile devices.

Quickbooks Integrations

QuickBooks is no slouch, either. It has its own App Store for getting integrations with payments services like Paypal and Square, or time tracking integrations with Google Calendar and QuickBooks' TSheets.

Still, if your business relies heavily on other software services, Xero is a better bet for making them all work together and ensuring everything is easily accessible.

Reporting and Dashboards

QuickBooks offers a main dashboard that can be customized with a series of tile-like graphs or lists, which let users see real-time KPIs at a glance. A bar graph of invoices can tell you which ones have been paid, have been deposited, or remain unpaid; a pie chart of expenses can break down travel, rent, and meal costs over the past month; bank accounts and sales can be tracked, while profits can be matched against losses. Meanwhile, a vertical sidebar takes users to more in-depth dashboards dedicated to topics including Workers, Taxes, and Reports.

Xero's main dashboard doesn't use tiles, but it can be customized to display the most relevant stats, such as your business bank account balance across the past few days, a bar chart of total cashflow from the past week, or a chart of invoices currently owed. More specific categories – Business, Accounting, Payroll, Projects and more — have their own dashboards, accessible with a horizontal sidebar. Any data can be clicked to take users to a full, detailed breakdown, complete with historical context, while users can set up data tracking to automatically generate specific reports.

Cash Flow Statements

Both services offer ways to track cash inflows, cash outflows, and total cash in hand. QuickBooks also offers a QuickBooks Cash account, which offers banking within QuickBooks, with 1% APY interest. Managers can forecast monthly and quarterly cash flow estimates as well. QuickBooks' cash flow reports offer greater flexibility than Xero's: Users can create reports with both the direct and indirect methods, rather than just direct.

Xero's financial reporting features start with its interactive reports and budgets, updated in real time throughout the week. Users can set specific KPIs, and can jump to detailed transactions when they need more info. Reports can be customized with different columns, formulas, text blocks, or drag-and-drop accounts.

Security Features

QuickBooks lets managers set the permission level for each user, making sure sensitive data stays need-to-know. Managers can also download a local copy of their data to a hard drive. QuickBooks also has an Always-On Activity Log feature, which tracks every login and every financial transaction to create an unbeatable paper trail. Size helps when it comes to the resources needed to boost security: Cybersecurity company Upguard has graded Xero a solid B, but it gives QuickBooks' parent company Intuit an A.

Xero's security measures keep your data encrypted and stored in multiple locations online, keeping it safe yet backed up. All plans support two-step authentication for all users, and the company guarantees it'll keep your data private.

QuickBooks vs Xero: Pricing

Xero offers three price plans with differing levels of features. QuickBooks, meanwhile, offers four different plans.

Xero starts at $5.50 per month and reaches $31 per month, while QuickBooks' plans range between $15 and $150 per month.

Overall, Xero tends to be cheaper. Granted, this doesn't mean Xero is the most cost-effective option for your business needs. Here's how each accounting software vendor breaks down their services, so you can see how they compare.

QuickBooks Pricing

The QuickBooks Simple Start plan costs $25 per month and supports one user, making it best for very tiny businesses or for a single freelancer. Features include expense tracking, contact management, and unlimited invoices and estimates. Reporting abilities are limited, though a raft of third-party integrations are available (many cost a little extra, but some are free). The plan includes a mobile app as well.

The Plus plan costs $70 per month, and supports five users. It offers the same features as the Simple Start plan, plus project profitability tracking, inventory tracking, bill management, and a time tracking ability for adding up billable hours. It also includes a hub to view all projects, making the correct labor costs, payroll, and expenses for each easy to manage.

The QuickBooks Advanced plan costs $150 per month, supporting 25 users. This is the enterprise option, with a dedicated account manager, priority customer support, advanced reporting features, online training courses, batch importing, and custom user permissions with role-based access.

Finally, the Self-Employed plan is $15 per month, for one user. It retains many of Simple Start's features (income and expense tracking, receipt management, quarterly tax estimates, invoicing, payments, and basic reports), but gets rid of several others (there's no sales or sales tax tracking, no 1099 contractor management, and no way to create and send estimates).

On top of all that, don't forget the Payroll plans: Core is $45 per month, plus $4 per employee per month; Payroll Premium is $75 per month, plus $8 per employee per month; and Payroll Elite is $125 per month, plus $10 per employee per month.

Xero Pricing

Xero keeps things simpler, with just three plans rather than five. And unlike QuickBooks, Xero's plans all support unlimited users.

The cheapest one is the Early plan, priced at $5.50 a month. With it, you'll be able to reconcile bank transactions, and use Hubdoc to save and manage bills and receipts. But some actions will be capped: You'll only be able to send 20 invoices and quotes in total, and can only send five bills.

Next up is Xero's Growing plan, at $16 a month. It's for companies that have grown past the Early plan, and need the caps on invoicing, quoting, and bills removed.

The Established Plan is $31 a month. It has all the features of Growing, plus support for multi-currency claims and expense claims, as well as a function for tracking time and costs on a per-project basis.

There's also Xero's integration with Gusto for payroll. We'd recommend either the $19 per month, plus $6 per employee per month Basic plan or the $39 per month, plus $12 per employee per month Complete plan.

Free Trials

Both services offer the same trial period: 30 days for free.

In addition, both offer special entry deals for your first few months. Those signing up to the Xero Starter plan will pay just $4.50 a month (50% off) for the first four months, while those on the QuickBooks Simple Start plan will pay $12 a month (down from $25) for the first three months – though they'll need to skip their free trial to qualify.

Best Value for Money

Which offers the most value? It depends on your needs – particularly your plans for offering payroll, and the number of users you need to support.

While Xero's $9 Early plan is far lower than QuickBooks' $25 Simple Start plan, it's also very limited due to the caps on invoices and billing. A better comparison is the $70 QuickBooks Plus plan vs. the $30 Xero Growing plan, paired with the $19 or $39 Gusto plans. Essentials supports just three users, while Growing is unlimited, making it better value for large or growing operations.

We'd recommend checking the total features offered by the QuickBooks Plus and Xero Growing plans against your business's needs.

QuickBooks vs Xero: Ease of Use

Both accounting softwares are easy to navigate, allowing users to find their required feature from a main dashboard with a sidebar. QuickBooks' sidebar is vertical and on the left, while Xero's is horizontal across the top – both deliver about the same user experience, and user satisfaction is high for both.

The number of users supported for each service is one huge difference: Xero supports unlimited users across all plans, but QuickBooks parcels them out with plans ranging from just one user to 25 in total. This makes Xero the best choice for a large or rapidly expanding operation, although both services can scale up to handle heavy, continual use.

Customization options also vary. Both services allow users to modify their main dashboard to display the stats that matter most to them, but QuickBooks offers a little more flexibility.

QuickBooks also takes the lead when it comes to custom reports. Both services let users set up automated data tracking and report generation, but QuickBooks has more granular options, making it faster to compare reports against historical data. It also has more templates. You'll still be able to accomplish everything you need with both, but it'll be a little faster with QuickBooks.

Plug-ins and Extensions

As mentioned earlier, neither service offers employee payroll software in its main bundle: QuickBooks charges an additional monthly and per-person fee for a separate in-house plan, while Xero offers a partnership with Gusto, which can be easily integrated with its service.

Both services do offer an app marketplace, for both in-house mobile apps and integrations or extensions offered by third-party services. Xero offers more integrations overall, but both are very comprehensive.

Devices Available

Both services are available on all the most common devices and browsers.

QuickBooks works on Windows PCs, Macs, and major browsers including Mozilla Firefox, Google Chrome, and Microsoft Edge. If you have Windows, you'll need to be running Windows 7 or newer, with at least 4GBs of RAM and a processor comparable to the Intel Core i5. If using a Mac, you'll need OS X “Panther” 10.13 or newer.

Xero runs on the major browsers as well: Google Chrome, Microsoft Edge, Mozilla Firefox, and Safari are all covered. Xero's mobile apps require the Android 5 operating system or newer if running on Android devices, and iOS 12.0 or newer if running on iPhone. The service hasn't listed specific RAM or processing needs, instead saying that Xero will work on “most devices.”

Supported Languages

QuickBooks supports six different languages: English, Chinese, French, Italian, Spanish, and Brazilian Portuguese.

Xero does not offer support for languages other than English. There are some workarounds, like downloading the basic invoice template, manually changing the language, and reuploading it, but there's no easy support for multiple languages. If you have international clients, this could be an issue.

QuickBooks vs Xero: Customer Service & Support

QuickBooks and Xero both offer fairly comprehensive support and training options.

Setup and Training Options

QuickBooks has an online portal that users with common problems can check to resolve any issues without involving customer support. It includes articles and videos, grouped by the type of QuickBooks product, and further broken down into categories such as ‘Account Management,' ‘Taxes,' and ‘Sales and Customers,' among others. Video training courses, a blog, and a community forum are also available.

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.

Online and Phone Call Support

Logged in QuickBooks users can access live support online: Live chat is available between 6 a.m. and 6 p.m. PT on Monday through Friday, and 6 a.m. to 3 p.m. PT on Saturday. Phone support is available during the same hours.

Xero users do not have any phone support options. However, they do have 24/7 online support. To get it, they'll just need to log in, visit Xero Central, and submit a query. They can then track its progress through a section called “My cases”, which details which specialist is working on it, the current status, and expected response time.

Plus, Xero staffers can call people back to discuss their cases over the phone, giving users that phone support they need – albeit in a roundabout way.

More about QuickBooks Online

QuickBooks products are developed and sold by the US-based software company Intuit, Inc. Other products from Intuit include TurboTax and the financial aid app Mint.

The first QuickBooks software was launched in 2002, and quickly proved popular: By September 2005, QuickBooks products had a full 74% of the small-business accounting software market in the US.

Who Uses Quickbooks Online?

QuickBooks Online – which is the version of QuickBooks we've reviewed in this article – accounts for 7.43% of the market today, compared to Xero's 5.49% share.

Since it's aimed at small businesses, the brands using QuickBooks are typically in industries like drywalling, marketing, bookkeeping, salons, and solar supply companies.

Other QuickBooks Products

We've just covered QuickBooks Online (and the QuickBooks Payroll add-on) in this article, but QuickBooks has a huge raft of products available to help businesses with all their accounting needs.

There's Live Bookkeeping, which lets a business outsource its book balancing to a pro; Commerce, for managing a multi-channel ecommerce store; Desktop Pro and Desktop Premier, which are older accounting softwares; Point of Sale, a hardware and software system used for checking out customers; and Payments, a system for accepting cards and bank transfer payments. They even sell checks and other office supplies.

More about Xero

Xero is a cloud-based accounting software platform, founded in 2016 and headquartered in New Zealand. For such a young company, it's already gained a healthy 5.49% share of the accounting software market, with its products currently in use across over 180 countries.

Xero For Startups & Small Business

In addition to the main Xero software and its accompanying mobile apps, Xero sells Practice Manager, for workflow, time tracking and job costs specifically; Workpapers, for preparing, reviewing, and approving workpapers; plus Cashbooks and Ledger, which are designed to speed up client payments.

Xero's core offering is pitched at startups: It's easy to use on-the-go with mobile apps, and it has a business performance dashboard to track key metrics. Plus, due to its role-based permissions, teams will find it easy to let their accountant view everything they need at a set level of access.

Quickbooks vs Xero: The Verdict

It's a tough call, but we'd recommend Xero.

Both QuickBooks and Xero offers great services that are easy to use and justifiably popular. What's more, both have some deficiencies that the other addresses: Xero doesn't help manage expenses with all its plans, even though QuickBooks does, while QuickBooks doesn't manage inventory with its Simple Start plan.

But while QuickBooks has a larger user base and more features in general, Xero still offers a great raft of features for a cheaper price.