QuickBooks vs Xero 2023: Which Software Is Better for You?

This makes the tool as great for payment as for understanding your cash outflows. Plus, you get bill pay tools no matter which package you choose, although you can only pay five bills per month with the Early plan. Xero has a similar pricing structure as QuickBooks Online and offers three products–Early, Growing, and Established–that range from $13 per month to $70 per month. For companies in need of a payroll function for their employees, Xero offers add-on integrations for an additional cost.

  • Smart Reporting, powered by Fathom, provides tools to analyze your business metrics.
  • While it has numerous advantages, there are a few drawbacks to consider before deciding if Xero is the right choice for your business.
  • The platform’s genesis was rooted in a commitment to simplifying financial management for businesses of all sizes.
  • We found all these features to be user-friendly in Xero, and we were happy that they are available to all users.

The decision between industry leaders like Xero and QuickBooks requires a thorough understanding of features, benefits, and potential drawbacks. The solution’s comprehensive and user-friendly invoicing and reporting features impressed us. Along with essential invoicing features, you get access to the vast QuickBooks network — if your clients use QuickBooks, transactions are especially easy. QuickBooks also includes over two dozen prebuilt reports; custom report functionality is available in the highest tier.

Best Accounting Software: The Case for Quickbooks

Those looking for an all-in-one accounting and payroll system may find QuickBooks a suitable choice. However, QuickBooks Payroll’s pricing can be more expensive than Gusto’s (depending on the plan you choose and how many employees you have), and it takes a little more time to set up. Gusto’s basic plan also has more payroll and HR features than QuickBooks’, including health benefits, workers’ compensation administration, commuter benefits and more. Wave Accounting is a free accounting solution for very small service-based businesses, contractors, freelancers and consultants. If you can’t justify paying for QuickBooks Online or Xero or they have too many features your business doesn’t need, Wave might be an ideal alternative.

This makes it a versatile tool for small businesses that need to streamline their operations. Whether Xero or QuickBooks Online is right for you depends on the specific features you need and how much you can afford to pay. Xero is more affordable than QuickBooks Online, allows you to add an unlimited number of users without additional costs, and offers inventory management and fixed asset accounting in all its plans. QuickBooks, on the other hand, has generally more developed features, such as bank reconciliation without bank feeds, makes it easy to find bookkeeping support, and has live customer support. In this Xero accounting software review, we’ll break down the pros and cons to help you figure out whether Xero is the right accounting tool for your needs.

How the Products Stack Up

Xero’s commitment to user-friendliness and extensive accounting and finance management functionality are undeniable. However, some aspects can hamper the software adoption or even make businesses look for an alternative. QuickBooks Online integration capabilities help transform business operations, streamlining processes, enhancing accuracy, and promoting financial management efficiency.

Xero vs. QuickBooks Online

For example, when you purchase the Pro Plus Desktop plan, you can have up to three concurrent users but each of those users must pay for their own account (at $349.99 each per year). Its Online version allows up to 25 users at no additional cost, provided you’re paying for the Advanced plan. For an additional $50, add a Bookkeeping setup with a Live Bookkeeper. It also offers Payroll, but this service is an additional fee starting at $45 to $125 per month. Both QuickBooks and Xero let you set up automated data tracking and report generation, but QuickBooks has more granular options, making it faster to compare reports against historical data.

Xero vs. QuickBooks Online: Which Accounting Solution is Right for Your Business?

The A/P section focuses on vendor management, bill management, bill payments, and other payable-related transactions. A/P features include creating vendors and bills, recording purchase orders and converting them to bills, creating service items, and recording full or partial bill payments. For instance, If you have complex bookkeeping needs and require a QuickBooks-specific virtual bookkeeping service, then choose QuickBooks Live. However, if you want a more scalable solution with the option to hire additional services like payroll and tax filing, then Xero is the more suitable choice.

Do Xero and QuickBooks Online Use AI and ML to Automate and Streamline Workflows?

Let your customers pay as they want to improve the chances of getting paid and reduce the time. Setting up payment services is easy and fast in Xero, so you can start receiving payments online. At the end of the day, the choice of what is the irs form 941 ultimately boils down to specific business needs and preferences. So, you can always check them in action to see whether they fit your bill befor making any commitment. QuickBooks Online goes beyond just showing data but helps businesses make smart decisions.

Unlike Xero and QuickBooks, businesses can get started on Wave for completely free and the software is also available to an unlimited number of users — extending its use even further. However, QuickBooks offers a more seamless experience for two big reasons. First, QuickBooks has phone support while Xero does not, so QuickBooks users can solve their problems that much faster. Second, QuickBooks offers some features that Xero doesn’t have, like document scanning.