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After pitting Xero vs Zoho Books against each other, our research determined that Zoho Books is the better accounting software overall – especially for sole traders and micro businesses. The platform trumped Xero’s in most categories, offering a wider selection of bookkeeping features, a slicker interface, and even a quality free plan.
However, when it comes to deciding between the two, the victor will ultimately depend on your specific needs. While Xero took us a bit more time to get to grips with, we found that its advanced cash flow management features and its generous user limits make it a better choice for growing businesses, those managing complex financial processes, and those yielding high profits.
Xero and Zoho Book are some of the best accounting software for small businesses, but they both excel in different areas. To help you choose between the two, we offer a granular comparison of their accounting features, user experience, pricing plans, and more.
In this guide:
| Tech.co review score | Starting price | Free trial | Best for | Core Benefit | Pros | Cons | Payroll processing | Office 365 integration | Phone support | Try now | ||
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| Try Zoho Books | Try Xero now |
Xero vs Zoho Books: At a Glance
Xero and Zoho Books are both leading accounting platforms, but it’s safe to say their specialisms lie in different areas. Here’s a summary of how the providers compare head-to-head.
- Overall, Zoho Books offers slightly stronger core accounting than Xero features, due to its superior journal entry and financial reconciliation tools.
- Zoho Books places stringent user limits on all of its plans, all of Xero’s plans welcome unlimited users, making it the most cost-effective provider for large teams.
- Zoho Books’s clean interface and straightforward navigation make its learning curve much more shallow than Xero’s.
- Zoho Books’s entry price is lower than Xero’s ($15/user/month compared to $20/user/month), and Zoho Book offers a free plan, making it the more affordable option overall. However, Xero is currently running a special deal that gives businesses 90% off its plans for the first three months.
- While both providers boast useful cash flow projection tools, Zoho Books alerts users about potential cash shortfalls, making it the better choice for businesses with unpredictable revenue streams.
- Zoho Books’s support options are excellent, letting you reach out via phone lines, email, live agent, and AI chatbot, while Xero requires you to solve problems independently through its user forums and a knowledge center.
- Both providers let you connect with heaps of third-party apps, but Xero’s app marketplace is around double the size, offering 1,000+ options, compared to Zoho Books’ selection of 500+.
Read on as we dive deeper into the differences between Xero and Zoho Books, to learn about which provider is best for you.
Who is Xero better for?
- Users with prior experience using accounting software
- Businesses managing complex workflows
- Businesses yielding high profits, with lots of clients
- Businesses interested in integrating their accounting software with specific applications
Pros
- Over 1,000 third party integrations available
- Useful client portal for clients to access financial information
- Robust fixed asset tracking functionality with depreciation values
Cons
- Steep learning curve for advanced features like work flows
- Outdated, poorly designed interface with difficult navigation
- Must give one-month notice before cancellation
- Early: $20/month
- Growing: $47/month
- Established: $80/month
Who is Zoho Books best for?
- New business accounting software for the first time
- Self-employed workers or micro businesses wanting to get started for free
- Retailers who want to manage their inventory effectively
- Businesses already using one of Zoho’s services
Pros
- Extensive data import/export features built in
- Time tracking tools with billable hours conversion for invoicing
- Highly effective transaction documentation
Cons
- No customer support outside business hours (no weekends)
- Limited third party integrations outside of Zoho
- Shorter free trial than most other accounting platforms
- Free: $0/month
- Standard: $15/month
- Professional: $40/month
- Premium: $60/month
- Elite: $120/month
- Ultimate: $240/month
Xero vs Zoho Books: Top Features Comparison
Xero and Zoho Books are both brimming with useful bookkeeping and financial management features. Yet, after putting the providers through their paces in our research and user testing, we found they excel in different areas.
Read on to see how Xero and Zoho Books’ features compare head to head.
Tax management: It’s a tie
Accounting platforms play a vital role in helping businesses stay on top of tax compliance. After pitting Xero’s and Zoho Book’s tax management features against each other, they performed similarly well. Both providers let you calculate taxes and assign taxes to different categories, and offer support for different tax types like VAT, income tax, and CIS.
Xero and Zoho Books both automatically update taxes as regulations change too, helping businesses stay up to date with compliance without having to make manual amendments. Unfortunately, neither platforms provide tools that assist with tax forecasting though, so if you’re in need of this capability we’d recommend opting for Free Agent, instead.
Financial reconciliation: Zoho Books
If you’re serious about avoiding financial discrepancies, as any business owner should be, Zoho Books offers slightly better financial transaction reconciliation features than Xero – but it’s a close call. The reason why Zoho Books took the edge over Xero in this research category, is because the platform lets you scan bills with in-house features, while Xero requires you to outsource the task with a third-party app like Hybdoc and Scan2Invoice.
Truth be said, there isn’t much in it though. Both providers sync with multiple bank accounts, send receipts following transactions, and refund customers, making them both reliable choices for businesses serious about keeping their finances in check.
Invoicing: It’s a tie
Another area where Xero and Zoho Books score neck-and-neck in our research is invoice management. Both providers let you keep on top of payments by setting up recurring invoices, automating invoice and quote sending, and supporting multi-currency invoices.
Users can also view when clients have viewed an invoice, and automatically send them reminders, to ensure they’re never getting short-changed.
When we tried our Xero, we found creating invoices with the platform really straightforward. Source: Tech.co user testing
Both providers let you customize your invoices with your company branding too – from your logo to custom color scheme – helping you to maintain professionalism with clients. Xero even lets you automate invoice processing with AI, eliminating the need for you to tackle piles of admin manually.
Cash flow forecasting: Xero
The ability to make good, informed choices is crucial to the success of any business. Fortunately, both Zoho Books and Xero offer stellar features that help businesses make smarter decisions. Specifically, Xero’s cash flow projection tool provides users with visitation of how cash balances will rise and fall in response to expected transitions.
Zoho Books also offers cash flow forecasts to help users plan for future bumps in the road, but we didn’t find it as intuitive as Xero’s.
Xero’s profit and loss features give you a detailed overview of your business’s financial health. Source: Tech.co user testing
Financial planning: Zoho Books
However, despite Xero’s stand-out cash flow forecasting tool, our research found that Zoho Books is better at helping businesses plan their finances overall. This is because, unlike Xero, Zoho Books alerts users about potential cash shortfalls and surpluses, and is capable of creating ‘what-if’ scenarios to help businesses prepare for future financial outcomes.
For these reasons, we recommend Zoho Books over Xero for businesses intent on growing, as well as those dealing with fluctuating demands.
AI automation: Xero
One area where Xero floors Zoho Books, is AI automation. Not only does the platform offer useful AI-powered insights to help users identify important trends and anomalies in financial data, but the platform also lets users automatically categorize budgets and forecasts, saving workers from having to carry out these tasks manually.
Zoho Books offers a handful of AI-powered features, including proactive error detection, and automated financial reconciliation, but truth be told its capabilities are nowhere as advanced as Xero’s.
Third-party integrations: Xero
If your business has particularly specialized needs, or needs to integrate your accounting platform with niche systems, Xero will be your safest bet.
Xero offers the best App Store out of any other accounting provider we researched, with over 1000 third-party integrations available for businesses to choose from. Xero adds new entries regularly too, and lets users create their own integrations using APIs, making the potential of the system feel limitless, especially compared to platforms without established app stores like Clear Books.
Xero’s app store lets you connect with tons of third-party apps, with options available for every core industry. Source: Tech.co user testing
Zoho Books’ app store isn’t anything to snuff at, either. The accounting platform lets you integrate with over 500 apps, including its own suite integrated suite of apps like Zoho CRM, Zoho Connect, and Zoho Workplace, to name a few.
However, businesses looking to rely heavily on third-party apps are still better off opting for Xero, as there’s more chance they’ll be able to connect with the service they need.
Zoho Books’s app store isn’t as expansive as Xero’s but it still offers a wide range of third-party integrations. Source: Tech.co testing
Help and Support: Xero
A good support option is the backbone of any accounting software system. After putting both providers to the test, our research found that Xero’s support center is head-and-shoulders better than Zoho Books‘, due to its round-the-clock availability.
Xero lets you get in touch with a member of its customer support 24/7, by using the Contact Xero Support button at the bottom of its online articles. The provider also offers a wide range of support articles and an AI-generated search results feature, which helps provide you with relevant information quickly.
Xero offers AI-generated search results to help you locate search articles quickly. Source: Xero
Zoho Books, on the other hand, lets paid users resolve queries by email, phone, and chat — while free users will be restricted to email options only. The clincher is that its live chat and phone channels are only available from 9 am to 6 pm, Monday to Friday, making the platform less useful than Xero for businesses operating outside of traditional business hours like restaurants and hotels.
Check out our guide to the best accounting software for hotels to learn how sector-specific providers when it comes to support, price, and more.
Xero vs Zoho Books: Ease of Use
To put things simply: Zoho Books is much easier to use than Xero. After testing out both systems firsthand, we found Zoho Books’s interface to be much more modern than Xero’s, which was quite dated and clunky in comparison.
Zoho’s well-signposted sidebar helped us locate features quickly, and its dashboard houses all the important insights small businesses need, without overcomplicating it. In comparison, navigating Xero felt like an uphill battle, due to its poorly designed dashboard and lack of visual indicators when we completed tasks.
The home dashboard from Zoho Books provided us with lots of valuable data to keep us informed. Source: Tech.co testing
While carrying out some processes with Xero, like uploading receipt images and creating bills was straightforward, we found simple tasks like importing clients or changing currency to be unnecessarily complicated.
“I didn’t like the dashboard. It was hard to keep track of where everything was. It was quite overwhelming. The headings are generic and this made it difficult to find things.” – A member of Tech.co’s user testing team
Xero’s saving grace was when we did encounter an issue, we were able to resolve it quite quickly through it’s useful help and support resources. Ultimately, we still concluded that Zoho Books’s slicker interface made it much easier to use overall, making the platform better suited to businesses managing simple bookkeeping tasks, and novice accounting software users.
While creating invoices was simple with Xero, we struggled to complete more complex tasks. Source: Tech.co user testing
Xero vs Zoho Books: Pricing Plans
If you’re looking for a budget-friendly or free accounting system, we’d definitely point you in the direction of Zoho Books.
Zoho Books offers a total of five plans: Standard ($15 per month), Professional ($40/user/month), Premium ($60/user/month), Ultimate ($120/user/month), and Elite ($240/user/ month). The provider also lets you get started for completely free with it’s Free plan.
In contrast, Xero only offers three: Early ($20/user/month), Growing ($47/user/month), and Established ($80/user/month). As you can see, Xero’s entry price is slightly higher than Zoho Books. However, the provider is currently running a promotional deal that gives businesses 90% off all it’s pricing plans for the first three months, bringing its entry price down to just $2/user/month.
Read on learn more about how Xero and Zoho Book’s pricing plans compare, and to see their plans side-by-side.
| Price | Users | Bookkeeping Does it include bookkeeping functions? | Import bank statements | Multi-currency transactions | Project accounting Does it offers tools to track different projects? | Financial reporting Does it offer financial reporting tools? | Budget & forecasting Does it offer budgeting and forecasting tools? | ||
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Zoho Books’s entry-level plan is cheaper
Zoho Books’s paid plans start from $15/user/month, which is $5 lower than Xero’s entry price of $20/user/month. While this margin may not seem too big, it will make a difference for small businesses requiring decent accounting features, while wanting to keep overheads as low as possible.
This being said, Xero’s cheapest paid plan, Early, does offer a number of features that Zoho Books Standard lacks, including short-term cash flow forecasts, and unlimited invoicing, making it a better deal for businesses that require these capabilities.
Zoho Books offers a free plan
Unlike Xero, Zoho Books has a completely free plan tailored towards solopreneurs and micro businesses. The Free plan gives you access to a decent raft of bookkeeping features, including invoice creation, automated payment reminders, and receipt tracking, but limits access to one user.
If you want to test out Xero before committing to a subscription, the provider does offer a 30-day free plan, compared to Zoho Books’ which only lasts 14 days.
If you’re able to make do without some basic accounting features with a permanently free version, you can also check out our guide to the best free accounting software.
The average price of Xero’s plans is lower
While Zoho Books offers more affordable options for smaller businesses, the average price of its plans ($79.17/user/month) is actually quite a lot higher than Xero’s ($49/user/month). This is because while Xero’s priciest plan – Established – is capped at $80/user/month), Zoho Books offers two premium plans – Elite and Ultimate – which come in at $120/user/month and $240/user/month, respectively.
This isn’t necessarily a negative though, as for businesses that can afford it, Zoho Books’ priciest tier offers some stand-out features that Xero lacks, like 50+ Pre-built data visualizations, and KPI-tracking.
Xero’s plans have more generous user limits
Unlike Zoho Books, which places stringent user limits on all of its paid plans, none of Xero’s plans caps user numbers. This is pretty unprecedented for accounting software, with most of the other platforms we’ve researched placing some kind of user limits on most of its plans.
Xero’s generous user caps will benefit businesses with large teams the most, as they won’t be required to upgrade to a pricier plan to give lots of users access to the software.
How Did We Compare Xero vs Zoho Books?
At Tech.co, we take our impartial research and analysis seriously, so you can have complete confidence that we're giving you the clearest, most useful recommendations.
After conducting an initial investigation to identify the most relevant, popular, and established accounting tools in the market, we conducted further research, including testing six major accounting software platforms.
Based on years of market and user needs research, we've established an accounting software testing methodology that scores these platforms against six main categories, and 25 subcategories - with a total of 1512 areas of investigation being considered overall.
We also put the platforms through their paces with hands-on testing to gain a deeper grasp of their average user experience. We dedicated 57 hours to carrying out 37 user tests, with a total of 555 tasks being completed in total.
Our main testing categories for accounting software are:
- Core accounting features - We check how adept a platform will be at managing accounting tasks, focusing on key bookkeeping features like invoicing, tax preparation, journal entry, time tracking, financial transactions, and payment support.
- Operational efficiency - We determine how capable a system is at ensuring day-to-day processes run seamlessly, paying close attention to third-party integrations, collaboration tools, AI automation, and customization options.
- Financial planning - We assess how capable a system will be at measuring income, profits, and losses. Specifically, we check for the presence and quality of forecasting and budgeting, inventory management, reporting, and compliance tools.
- Help and support - We asses how useful and reliable a platform's support system is, focusing on support options, whether it's 24/7, knowledge center accuracy, as well as cloud backup, and security safeguards.
- Pricing - We compare the overall cost of each platform, taking factors like monthly costs, set-up fees, hidden fees, and free plans into account. We also measure how strict contracts are, and how much it would cost for a business to terminate them early.
- User experience - An overall judgment of how easily users can interact with the platform. We tested each accounting platform and got our team to report how easy they were to use, how they felt when they were using them, and how likely they were to recommend the platform to another business.
When it comes to calculating a product's final score, not all testing areas are weighted evenly, with factors like ‘core accounting features’ and ‘operational efficiency’ being prioritized for small businesses, while sector-specific features are valued more highly for businesses across different industries.
We understand that accounting software is always evolving. That’s why at Tech.co, we have full-time product researchers to re-run this testing process regularly. It’s the only way to ensure our results remain reflective of the present day.
Learn more about our research.
Xero vs Zoho Books: The Verdict
If you’re a small business looking for a reliable accounting platform, our research found that Zoho Books will be a better choice over Xero. In fact, it’s our top-rated system overall, namely because of its intuitive software which lends itself perfectly to beginners, broad array of useful bookkeeping features, and affordable entry-level plans that won’t break the bank.
Xero will be the top choice for businesses with complex financial operations, however, due to its excellent cash flow management capabilities, and its expansive app store that lets you connect to over 1,000 third-party apps. Xero isn’t the easiest platform to get to grips with, however, so we’d only really recommend it to users willing to dedicate a bit of time adjusting to its steep learning curve.
While Xero and Zoho Books’ are both top accounting platforms, there are tons of other useful options out there. Click on the buttons below to get started with either system or to compare plans from 2025’s top accounting providers.
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