Xero and QuickBooks are two of the biggest names in the accounting software space, and they are highly ranked in our roundup of the best accounting software. Both platforms offer tools and guides, and numerous third-party services specialize in migrating data between QuickBooks and Xero. QuickBooks Online (Plus and Advanced plans) has more robust built-in inventory management using the FIFO (First-In, First-Out) method. Xero offers built-in payroll in the UK, Australia, and New Zealand. It focuses on core accounting excellence and encourages users to connect specialized third-party apps for niche needs via its extensive app store. QBO aims to cover almost every accounting need within its own software, scaling from simple sole trader needs (“Simple Start”) up to complex small enterprises (“Advanced”).
Time Tracking
Its international capabilities are limited, and businesses outside the US may encounter hurdles in workflow and compliance. While this works well for small businesses with limited staff, companies anticipating rapid growth or needing multiple accountant or bookkeeper seats may find the cost of scaling a drawback. Its clean dashboard and helpful prompts streamline core tasks like invoicing, bank reconciliation, and expense tracking. Meanwhile, Xero excels in international operations, team collaboration, and businesses prioritizing cost-effective scalability. It’s an essential feature for construction companies, professional services firms, and project-based businesses that need to understand the true cost and profitability of individual engagements. The job costing functionality allows businesses to track profitability at the project or client level, providing detailed insights into which services or products generate the highest margins.
Both Xero and QuickBooks offer strong tools, but each is built for different types of businesses. They built it because many small business owners struggled to handle accounting without the tools that large companies use. Xero is cloud-based accounting software created in New Zealand by Rod Drury and Hamish Edwards. The system also supports time tracking and offers access to bookkeeping services if you need outside support.
The best small business accounting software depends on your unique needs. QuickBooks suits those needing advanced reporting, payroll tools, and a robust app ecosystem, especially in North American countries like Canada and more. It offers basic invoicing, expense tracking, and financial reporting completely free of cost.
The platform provides detailed tax categorization, supports multiple tax jurisdictions, and offers industry-specific tax reporting features. QuickBooks brings more advanced tax reporting tools, such as its connection to TaxCloud, Avalara, TaxCalc, and many more. It works well for subscription businesses and also offers clear reports on recurring income. Learn more about Xero and other accounting software providers to make an informed decision for your business. Ideally, your software should cover the core finance features you use every day – like invoicing, payroll, expenses, and cash flow management.
AI, automation & smart features
QuickBooks supports scaling through detailed features, advanced reporting, and stronger workflows. QuickBooks is stronger for businesses that handle stock, variants or detailed tracking. Whereas, you may go after QuickBooks if you need more advanced tools and expect your business to grow into a more complex operation. It offers deeper features, more customization, and stronger reporting. Additionally, it covers the core tasks most small businesses need, such as invoicing, tracking money in and out, and managing basic records.
Integrations & connected tools
- The user-friendly file management system makes it easier to track documents and images.
- Remember, this rivalry isn’t just about features, it’s about tailored workflows matching your unique business needs.
- QuickBooks is stronger for businesses that handle stock, variants or detailed tracking.
- The platform provides competitive rates, particularly for businesses processing high volumes.
Xero’ connects to over 21,000 financial institutions worldwide, automatically importing transactions and highlighting discrepancies. This reduces manual data entry and improves accuracy over time. what does in transit mean for a package QuickBooks offers more granular control over the chart of accounts setup, with industry-specific templates and complex account structures, especially in QuickBooks Desktop. It comes with basic templates, but users can adjust them to match the needs of their specific industry.
At the time of writing, Xero offers 90% off for the first three months, while QuickBooks provides 50% off for the first three months. I like that Xero offers a centralized file management location, which makes file management much easier. QuickBooks offers more software integrations, and its automation builder is more intuitive. Still, both platforms allow you to reduce manual data entry, create rules to handle recurring charges and auto-calculate taxes. QuickBooks offers over 750 integrations, including platforms such as Dext, BILL, Expensify, Mailchimp and PayPal. No business software is complete without integrations and support for automated workflows, and Xero and QuickBooks offer both.
Get business insights and tips
- QuickBooks is accounting software created by Intuit, a company started in the early 1980s by Scott Cook and Tom Proulx.
- As a senior manager of a D2C company, you can choose Xero if you want simple software that handles day-to-day accounting.
- Choose Xero if you need multi-user access and robust project tracking.
- It provides QuickBooks Online, Desktop, and Enterprise options to meet various business requirements.
- The platform’s tax tracking is easy to use and reliable.
Spend less time chasing payments with professional templates and automated payment reminders and more ways to pay. Choose from over 1000 business apps that seamlessly integrate with Xero, and useful Xero add-ons Tailor Xero to fit your unique business. After using Xero for a period of time, I now prefer it is depreciation a fixed cost or variable cost over QuickBooks”
Generally higher, tiered by features & users. Basic inventory tracking; relies on app integrations for advanced needs. Unlimited users on all plans. Both are powerful, cloud-based platforms designed to help you manage your income, expenses, and overall financial health.
QuickBooks is accounting software created by Intuit, a company started in the early 1980s by Scott Cook and Tom Proulx. Managing ecommerce orders, inventory, payments, refunds, customers, and reconciliations manually can still hold your team back, regardless of your accounting software. It includes inventory tools such as SOS Inventory, payroll options like QuickBooks Payroll and Gusto, and apps for ecommerce accounting like Webgility. These extensions help Xero serve as the financial hub for service-based, retail, and online businesses. Xero comes with an easy-to-use and detailed API, which helps businesses and software creators make their own integrations. This makes Xero a strong choice for businesses that rely heavily on cloud-based tools and want to streamline their tech stack.
In practice, this means you can maintain your current tech stack while adding powerful new accounting capabilities. The platform’s open API approach also encourages developers to create specialized tools that extend its functionality. For international accounting needs, Xero’s approach to multicurrency transactions is more intuitive than QuickBooks’ implementation. The platform automatically handles exchange rate fluctuations and provides clear reporting in your base currency. Project tracking and analytics in higher tiers
You need comprehensive customer support and quick issue resolution
Both platforms also offer multicurrency support and mobile applications to scan receipts and easily track them. Here are the key features of Xero and QuickBooks that I think will have the most impact on how you manage your SMB’s finances. Expert help, invoicing, maximize tax deductions, track mileage Overall, both platforms have many similarities and can help SMBs get their finances in order, but there are also some differences that can’t be glossed over.
Mobile app functionality
QuickBooks generates sharable mileage reports with a breakdown of miles and potential deductions. QuickBooks supports mileage tracking with its mobile app, which enables automatic GPS tracking from mobile phone locations. It also sends notifications, accepts receipt photos, and offers analytics data to monitor employee spending. QuickBooks is not designed for proposal writing, but users can turn estimates into proposals by attaching files or adding messages. Xero has no built-in proposal feature but can integrate with third-party proposal software.
For businesses, financial agility and operational transparency are important when it comes to getting a competitive advantage. A cloud-based accounting tool for freelancers and small businesses. Its integrations and reporting facilitate compliance in dozens of countries, making it the clear choice for businesses with cross-border clients, suppliers, or offices. These make it suitable for retail, manufacturing, or distribution businesses that need detailed inventory control and accurate cost accounting throughout their supply chain operations. QuickBooks is specifically designed for US-based businesses, offering alignment with Generally Accepted Accounting Principles and direct integration with US tax-filing systems.
You want streamlined bank reconciliation and automated bookkeeping
These features appeal to growing businesses that need detailed financial intelligence. It offers advanced workflow automation, detailed custom reporting templates, and the ability to modify transaction categories and classification rules to match business requirements. QuickBooks delivers more sophisticated reporting and customization options compared to Xero, particularly for businesses with what is considered to be a utility bill complex accounting needs.
The user-friendly file management system makes it easier to track documents and images. QuickBooks’ file management is less refined but more than adequate. QuickBooks’ automation builder is intuitive and offers a robust selection of premade templates. Both Xero and QuickBooks make connecting to financial institutions pain-free. QuickBooks can connect to thousands of global financial institutions.
Your business operates internationally or deals with multiple currencies
For businesses needing in-house payroll management, QuickBooks is often the better choice. Xero integrates well with platforms like Peppol and Invoici (especially relevant in Malaysia), while QuickBooks offers built-in tools to manage VAT, GST, and sales tax depending on your country. There’s no one-size-fits-all solution—your best accounting software depends on how your business works. When it comes to managing small business finances, Xero and QuickBooks consistently top the list of the best accounting software solutions.
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