Xero Vs Quickbooks Comparison 2021

Accounting software is one of the essential tools needed for a company’s smooth operations in a modern world like ours. When the accounting software is cloud-hosted, giving you access to it anytime and anywhere, even better. QuickBooks and Xero are such accounting software that helps you have a clear insight into your accounts and track your projects, expenses, and time.

With these two powerful tools, you might have a tough time choosing one for your business. This article will help you in knowing which to go for based on your business requirements.

Xero Vs Quickbooks

Both software is similar, but they have different approaches. They are identical in that they are both designed for small to medium-sized businesses and have identical features.

Xero was founded and launched by Xero Limited in 2006, a New Zealand-based public technology company. QuickBooks is owned by Intuit and was first released in 1983, with a stable release in 2019.

For a more concise analysis, this article has been divided into four categories:

  • General overview
  • Features
  • Pricing
  • Reviews

General Overview

Xero

Xero is accounting software for small to medium-sized businesses and allows you access to the significant financial elements needed for a small double-entry business. Business like; sales purchases, billing, expenses, payroll and inventory.

It also lets you manage fixed assets. With Xero, you can also create records for your contacts, employees, clients and suppliers. It is cloud-hosted and is popular with thriving start-ups. Xero is quite affordable, with three plans to choose from based on your business size.

Quickbooks

QuickBooks, in its numerous versions, is designed for small businesses. It is a full-featured financial management and accounting tool for double-entry bookkeeping, inventory, payroll, managing expenses, budgeting and many more. It is web-based, and you can have access to your account from anywhere as long as there is an internet connection. It is quite expensive to subscribe to and has four different plans to select from. The most popular version of QuickBooks is QuickBooks Online.

Features of Xero vs QuickBooks

Features of Xero

Xero is an accounting software that helps small businesses track their finances. Below are some of its features, starting with its functions;

  • It tracks and pays bills on time.
  • It helps you simplify your employees’ expense claims.
  • It allows you to connect to your bank.
  • It helps you categorize bank transactions every day.
  • It helps you track projects, quote, invoice and receive payment for jobs.
  • It gives you access to the financial history you share with a customer or client.
  • It can serve as your online filing system.
  • It helps you manage inventory.
  • It lets you track finances with accurate accounting reports.
  • With Xero, you can capture original documents and key data without manual data entry using Hubdoc.
  • It lets you send invoices as soon as you complete a job.
  • It is cloud-hosted
  • It allows you to accept online invoice payments.
  • You can pay and get paid in more than 160 currencies at up-to-date exchange rates (Premium plan)
  • You can pay your employees and keep records of the payroll with the payroll feature.
  • You can automatically calculate sales tax.
  • You can collaborate with your advisors online in real-time.
  • You can connect to Stripe, GoCardless and other online payment gateways.
  • Customer Support is available 24/7
  • It has a partner program for professional accountants and bookkeepers·
  • Xero has a mobile app that is available on Android and iOS devices.

Features of Quickbooks

QuickBooks is solely for small business accounting, and here are some of its features;

  • It tracks business income and expenses from multiple accounts.
  • It sorts transactions automatically into tax categories.
  • It organizes receipts
  • It tracks mileage automatically.
  • It allows you to capture your receipt.
  • It can send and track invoices and allows you to customize your invoices to suit your brand.
  • Your accountant can access your account.
  • It has integrations with over 600 third-party apps and also has built-in integrations with some Intuit apps.
  • It is cloud-hosted
  • Like Xero, it also has a mobile app available on Android and iOS devices.
  • Customer support is also available via calls and chats.
  • Its most common version, QuickBooks Online, has four different subscription plans.

Pricing of Xero vs QuickBooks

Both Xero and QuickBooks operate on paid subscriptions. They run on monthly subscriptions; with QuickBooks, you can cancel the subscription anytime, and with Xero, you can only withdraw after a month’s notice.

Pricing of Xero

Xero for small businesses has three pricing plans. The first plan is great for freelancers, sole traders and new businesses. The second plan is ideal for thriving small businesses, and the third and most expensive is great for established companies. These plans share the following features in common except for the multi-currency support:

  • Send invoices and quotes.
  • Enter bills
  • Reconcile bank transactions
  • Capture bills and receipts with Hubdoc

Here are the plans and the pricing:

  • Starter: $20
  • Standard: $30
  • Premium: $40

For extra add-ons on any of the plans, you pay $4 per month to claim expenses and $7 to track projects.

Xero is not as expensive as QuickBooks and offers a 30-day free trial that gives you access to all its features, and you can opt-out of it at the end of the trial.

Pricing of Quickbooks

QuickBooks Online has four different pricing plans to select from; the plans differ in additional features but have the following traits in common;

  • Unlimited invoices
  • Unlimited estimates
  • Expense tracking
  • Mileage tracking
  • Reports
  • Integrations with over 600 third-party apps

Here are the plans and their fees;

  • Simple Start: $25 (1 user plus accountant)
  • Essentials: $40 (3 users plus accountant)
  • Plus: $70 (5 users plus accountant)
  • Advanced: $150 (25 users plus accountant)

You can choose to integrate your QuickBooks accounts with other QuickBooks services like QuickBooks Payroll and the likes but at additional costs.

You can access QuickBooks Online with a 30-day free trial. However, it is not recommended you accept it if you decide to subscribe to a plan afterward. One advantage is that you don’t need to input your payment details before accessing it, but once the trial is over and you want to subscribe to a plan, you won’t be able to apply any discounts on subsequent payments.

Reviews Xero vs QuickBooks

The two software serve similar purposes but have different approaches and different pros and cons.

Pros Xero

  • Unlimited users
  • Numerous integrations
  • Fair pricing
  • Easy to use
  • Large feature selection
  • Strong cloud security
  • Cloud-hosted; gives users access to it anytime and anywhere.

Cons of Xero

  • Limited mobile apps
  • Poor customer support (no phone support)
  • Not intuitive
  • Review of Quickbooks

Pros of Quickbooks

  • It is cloud-hosted, which means you will always be on the latest version as updates happen automatically.
  • It makes accounting very easy.
  • Ideal for small business and has features that can support medium-large sized business (Advanced plan)
  • Wide integration capacity

Cons of Quickbooks

  • Slow customer support
  • Very expensive
  • Might have excess features necessary for a business
  • No access to discounts once the 30-day trial has been used.

With the above review, Xero and QuickBooks can easily be distinguished from each other. Below is a table that summarises their similarities and differences;

  Xero QuickBooks
Personal Finance No No
Business Accounting Yes Yes
Create invoice Yes Yes
Track Projects Yes Yes
Fixed asset management Yes No
Manage inventory Yes Yes
Multi-currency support Yes No
Bank Reconciliation Yes No
Accountant/Advisor access Yes Yes
Cloud-hosted No Yes
Integrations Numerous (over 700) Wide (over 600)
Customer Support Yes Yes
Subscription Monthly Monthly
Mobile App Yes Yes

Undoubtedly, Xero and QuickBooks are two formidable competitors, and it definitely can be hard to choose with all of their attractive features. However, from all of the analyses, you can carefully make the right choice for your business based on what it needs.

QuickBooks offers advanced reports, unlike Xero and is more suitable for businesses in the United States. In contrast, Xero offers an unlimited user feature and is best for businesses outside North America. Whatever your choice is, you will be choosing one of the best accounting software there is.

We hope you found this comparison helpful. Read more of our blog posts for great small business insight!