As a small business owner, you have some important decisions to make. One such top priority matter is your small business accounting. If you are here, you are in search of the right accounting software for your small business. Switching to accounting software from primitive manual practices is a smart choice. But you have to be keen and prudent on which software you choose - Xero or QuickBooks. 

Accounting and finances are the centrepieces of any business. In that light, accounting software becomes one of the most significant tools for the day-to-day running of your business. With a well-constructed efficient accounting system like QuickBooks vs Xero, you can sit back and have a clear look through your numbers, have perfectly balanced books, maximize tax write-offs and always stay ahead of the curve. 

There is no one-word answer for which one wins in the Xero vs QuickBooks  comparison battle. QuickBooks and Xero are big shots in the industry. When it comes to the accounting features, both tick most boxes. But they differ in their approaches, each is significant with its respective pros and cons. It might be hard for you to analyze and pick which one works best for you as a beginner. This blog post will juxtapose QuickBooks and Xero, walk you through their pros and cons and help you find your pick. 

Xero and QuickBooks - on neck and neck

As mentioned earlier, both Xero and QuickBooks have consolidated their reputation as the top accounting tools for small businesses. These tools are built exclusively for small to mid-sized businesses, start-ups and freelancers. So, bigger enterprises may not find these fully equipped to solve their accounting chores. Let us see about each tool in detail. 

Xero, with the tagline ‘Beautiful business”, serves its purpose. It gives small businesses the power to make their accounting simple, sleek and hassle-free. Xero is adored for its user-friendly interface with simple, yet powerful, menus that make accounting comprehensive and enjoyable for small businesses. 

Xero was founded 23 years after QuickBooks started its venture into accounting. Despite having a younger brand image, Xero gives a tough fight to QuickBooks as it consistently scores higher numbers in the reviews. The strong value proportion to Xero is the clean usability it provides, making it adorable and popular among the startup community. Still, the eternal battle between xero vs quickbooks vs wave is on in the market. 

Now we talk about QuickBooks, the market-leading accounting tool, developed by Intuit. They run with the tagline “Smarter business tools for the world’s hardest workers” and that is what they do. QuickBooks can keep tabs on all your complex accounting chores right from managing bills and invoices to reconciliations, tracking projects and even automatic mileage tracking using a smartphone. 

QuickBooks admits that 98% of their customers say that their business accounting is made easy with QuickBooks. No wonder QuickBooks has got a solid reliance from the small business crowd. QuickBooks has been in the market for decades and so has a reputation and love from accountants, especially in the United States. With an estimated market share of 80% in the US, QuickBooks stands out as the most popular accounting tool.

Feature Comparison of Xero accounting Vs. QuickBooks

Now we know the highlights and motifs of both the applications, here we delve deeper into the highs and lows of each application for you to better analyze Xero vs QuickBooks online and find which one suits your business best. 

Ease of Use

Both QuickBooks and Xero have intuitive dashboards, clearly giving you an overview of your main business metrics. QuickBooks has a simple and customizable layout with a quick overall run-through of your profit and loss, bank account balances, expenses, invoices and sales. 

Similarly, Xero also has an easy to use dashboard with minimal details, comprising what is commonly required for most small businesses. 

And most importantly, you will have to check if your bank is supported by either of these applications. Make use of the trial period to ensure that you can connect your bank and explore if everything works seamlessly.

Going with the ratings, Xero scores a bit higher than QuickBooks in terms of ease of use, as it has minimalistic menus on the dashboard. About the quality of support, both these applications get almost equal scores.

Invoicing

Both the tools offer robust features for invoice processing and quotes. Creating invoices in Xero is absolutely easy and you can preview the invoices before sending them. But the system is at times glitchy. QuickBooks gives you the ease to update your client details in the invoice directly. You don’t have to go to their contact records to make the update. 

Expense and Bills

You can have mobile apps for either of these applications. With their mobile apps, you can scan receipts on the move and eliminate paper-based records. 

It is easy to categorize cash in and out of your business in the chart of accounts, but it takes some time for you to get a grasp on it as a beginner. You shall consult your accountant for which account to choose for each use case. With Xero expenses, you can submit and reconcile expenses only with an add-on that comes with Xero’s Established plan.

On the other hand, managing expenses and bills are very simple using QuickBooks. You can easily manage, customize and track spend with the chart of accounts in a snap. QuickBooks has in-house expense functionality in all plans. You don’t have to get it as an add-on or purchase higher plans, as in Xero for expenses. 

Reporting

Bringing up reports in QuickBooks is a breeze. You can generate reports based on monthly profit and loss statements, balance sheets and date range. But Xero is a bit clumsy with the reports. QuickBooks has spent decades in the market to figure out user flows and cater to all their customers’ needs. Having that said, Xero needs some time to perfect the reporting to meet QuickBooks standards. However, you can use add-ons for detailed and clear reporting in either of these applications. 

Integrations

Accounting software is one of your core tools. You may need to integrate your accounting software with various other systems for maximum efficiency. So, carefully research the integrations your accounting software can accommodate. 

You should look if your accounting software can integrate with your CRM system, bookkeeping or auto-import tool, reporting tool, e-commerce and other tools for your inventory management and POS.

In that light, both Xero and QuickBooks offer a gamut of authorized applications in their respective App Stores. These integrations can make your work easier, without you having to toggle between different applications. 

We cannot say that QuickBooks and Xero have everything you need for accounting and business management. In case of any gaps or additive features, you can collaborate with add-ons or other applications that you already use with your accounting software. For instance, you have to manually key each transaction into them to get your accounting started. Instead, you can use add-ons like SaasAnt Transactions and PayTraQer to import transaction details into QuickBooks and Xero in a snap and with improved accuracy. 

Pricing

QuickBooks is a bit costlier than Xero, yet it pays well for the features it comes with. Though Xero’s pricing may seem cheaper and tempting, it is restrictive for smaller sides of hustles. Plus, QuickBooks often gives away offers and coupons. If your accounting needs are simpler, involving no complex options, Xero might be your best choice. Or, if you need more detailed reports and advanced options and customizations, QuickBooks is worth paying for. 

Final Verdict

The verdict for Xero vs QuickBooks comparison is in your hands and based on your business needs. If you are in the US and want advanced reporting and customizations at a comparatively lower cost, QuickBooks might suit you well. And you can go with Xero if you are a growing startup, who loves minimalist user experiences and are outside the US. You can try these applications with their free trial for a month and see how well it fits your business accounting. So, research on these further, ask your accountant if you have one, take a test drive and then make the purchase. 

Happy accounting!