Xero Vs QuickBooks Online

Xero and QuickBooks are two of the biggest names when it comes to Cloud Accounting Software. Both are very comprehensive software options, and both offer the main accounting services such as payroll, invoices, transactions and bank feeds. It can difficult to know whether to use Xero or QuickBooks so here are some of the main points to consider when choosing.

QuickBooks Online was founded in 2004 with the aim of creating a simpler, improved accounting software. QuickBooks online has since gone through some significant changes and improvements and has grown to over 2.2 million users. Recent additions to the software include a project management feature and a lending platform called QuickBooks Capital.

Founded in 2006, Xero is a cloud-based accounting software that “connects people with the right numbers anytime, anywhere, on any device”. Through online collaboration, Xero helps to build a trusted relationship between accountants and small business clients. Xero has over 1 million subscribers worldwide and employs a world-class team of more than 2,000 people.

Features:

With regards to the features offered, QuickBooks and Xero are very similar. Both of the cloud accounting software companies offer the main accounting features such as bank reconciliation, chart of accounts, fixed asset management and several accounting reports. Each software uses double-entry accounting and supports cash-basis and accrual accounting.

QuickBooks does however offer a Lending feature and a Project Management feature that Xero doesn’t offer. However, some of the features offered by QuickBooks are only available on the more expensive plans. Whereas on Xero the features offered are not limited by the plan you are on, making these features much more accessible for many users.

Some of the features offered by both QuickBooks Online and Xero include: Invoicing, Estimates, Contact Management, Expense Tracking, Bank Reconciliation, Accounts Payable, Chart of Accounts, Budget, Inventory, Time-Tracking, Payroll, Reports, Tax Forms and Support, Sales Tax, Multi-currency, and Importing/Exporting.

Integrations:

Both QuickBooks Online and Xero are the top accounting software companies in terms of integrations. However, QuickBooks Online offers fewer integrations at just over 200 compared to the 500+ integrations offered by Xero. Both QuickBooks Online and Xero also integrate with Zapier, which connects them to hundreds of additional add-ons. Some of the main integrations provided by both QuickBooks and Xero are PayPal, Stripe, Shopify, Receipt Bank and Vend.

Ease of Use:

In terms of usability, it is easy to get used to the QuickBooks Online software and learn how it works, there is only the occasional navigational difficulty. On the other hand, Xero only becomes easy to use once you get to know the software. The setup can be time consuming and a bit of a learning curve.  However, most of the set-up time is spent on importing contacts, previous bank statements, items etc. and Xero offers plenty of support tools to guide you through the whole process.

Pricing:

To look at pricing, Xero offers three pricing plans, the Starter plan at £10 per month, the Standard plan at £22 per month and the Premium plan at £27.50 per month. All plans include payroll, the cost for which is £5 per month for up to 5 payroll employees plus £1 per month for each additional employee, up to a maximum of 200 employees.

QuickBooks also has three pricing plans, one for self-employed at £6 per month, an Essentials plan at £15 per month and a Plus plan at £25 per month. Payroll is charged at an extra £1 per month per employee.

For small businesses, QuickBooks Online is a more affordable option and Xero’s smallest plan only gives users 5 invoices and 20 bank transactions. For medium-sized to large businesses, Xero’s pricing works out better as Xero offers payroll at no additional cost and allows access for unlimited users on each of the plans as well as extensive user permissions. QuickBooks Online only supports one, three, or five users depending on the pricing plan.

Wondering how to create an invoice in Xero? If so, check out our article “How to create an invoice in Xero”. 

Support and Customer Service:

Xero is known for its excellent customer service which is available 24/7. They operate primarily on email support and have a good reputation when it comes to response times. The Xero representatives are known to be well-informed and very helpful. Xero also offers plenty of online resources, including a help centre, a community forum, a live chat feature, podcasts, accountant messaging, an in-software help button and lots of business and accounting guides. Xero also offer a training program called Xero U which includes online courses and occasional events.

Are you a small business owner? Looking to hire an accountant? If so, check out our article “What to look for in your Small Business Accountant in the UK: Your Guide to Finding the Perfect Match“.

QuickBooks Online has previously been said to have poor customer service with long waiting times and holds but it has since made significant efforts to reduce their waiting times and offer a better Help Centre. They also provide a contact phone number, something Xero does not provide, a community forum, In-Program help button, video tutorials, online classes and the option to pay for a QuickBooks Pro Advisor. However, the resources offered to customers by Xero far out way the phone support provided by QuickBooks Online.

Not sure about how to hire a Xero certified advisor? Click that link to our article to find out more!

Hardware and Software requirements:

As both QuickBooks Online and Xero are cloud-based, they can both work with nearly any device with internet access that is using one of the following browsers:

• Google Chrome
• Internet Explorer
• Mozilla Firefox
• Safari
• Microsoft Edge

Both QuickBooks Online and Xero also offer mobile apps for Android and iPhone. Xero can also be used with Linux, something QuickBooks Online does not currently offer.

Most users of the QuickBooks Online mobile app find it easy to use and very helpful. Despite there being a few complaints, the QuickBooks Online App has received 4+ stars on average on both iTunes and the Google Play Store. The Xero mobile app tends to receive more complaints, the main one being that the app lacks some of the key features users would like it to include and often has bugs and crashes.

Positive Reviews:

Despite the complaints received by QuickBooks, there are many users that are very happy with the software and most of the ratings for QuickBooks Online have increased at a steady rate over the last year. Reviews show that users appreciate the mobility QuickBooks Online gives to users and how easy it is to use. Accountants praise QuickBooks Online about their reports, chart of accounts and bank reconciliation features and many businesses report that QuickBooks Online saves them time and keeps their companies organised.

Xero is often praised for its large selection of features and the extensive user permission settings. Many users say that the large number of integrations offered by Xero make their lives easier and make their businesses run smoother. The mobility that Xero gives business owners as well as the mobile apps are also common points of praise.

Complaints & Negative Reviews:

Xero is said to be well-loved by the majority of its users and the ratings it receives are on average higher than that of QuickBooks Online. Xero has received very few customer complaints, but this could be due to the fact that it hasn’t been around for as long as QuickBooks and has around half the number of users. There are however some recurring complaints that Xero receives, mainly regarding the functionality of the mobile app and its lack of features, the lack of phone support and the slow response to user requests in terms of suggested updates.

On the other hand, QuickBooks Online has received a larger number of complaints, mostly relating to poor customer service, unauthorised charges, bugs, crashes and limited mobile apps.

Security:

Both Xero and QuickBooks Online use data encryption, redundancy and physical security measures at their data centres. QuickBooks Online uses 128-bit SSL encryption and multi-factor authentication. Physical safeguards have been implemented at the Tier 4 data centre, and routine testing ensures security. However, on several occasions, QuickBooks Online users have reported downtime and outage issues. Whereas Xero has a reputation for some of the strongest cloud security out there. Security measures include data encryption, 2-step authentication, and 24/7 monitoring at multiple locations. Data is backed up daily across various servers and regular security audits are performed. Xero also boasts an impressive record of 99.97% uptime.

Which is the better software?

QuickBooks and Xero are both leading software companies in the online accountancy world and both shine in different key areas. However, when considering all the advantages and disadvantages of both Xero and QuickBooks, Xero edges out in front as the better overall software package.

Xero provides more accessible features, free payroll, better customer service, an excellent invoicing feature, and more positive reviews. Xero is ideal for medium to large businesses as well as businesses looking for a scalable software to grow with their company. Once you have passed the learning curve that is the set-up process, Xero can be easy to use and there’s plenty of support material to help you along the way.

QuickBooks may not exceed Xero in many of the above categories, but it is still a serious contender for many businesses. QuickBooks Online is ideal for small businesses, in particular those businesses that rely on invoices as QuickBooks’ invoicing feature is superior to that of Xero. QuickBooks also offers the unique lending platform, QuickBooks Capital as well as a project management feature.

Every business is different and some of the above factors may be more important to some than others. So whether Xero or QuickBooks is best for you entirely depends on what you wish to use the software for and how the different aspects of the software fit with your requirements.

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