What is the best accounting software?
At Acuity, we get asked that question rather frequently, as many of the entrepreneurs we work with want to know which accounting system they should use. And it comes down to these two players: Xero vs. QuickBooks.
As a proud partner of both platforms, we can confidently say that each one is a reputable, effective accounting tool that can alleviate many pain points on the financial side of your business. But how do you choose?
“Imagine that QuickBooks is vanilla ice cream and Xero is chocolate ice cream,” explained Acuity Co-Founder and CEO Kenji Kuramoto. “Both flavors are good and life’s much better having ice cream than not having ice cream. It’s just up to you which flavor you prefer.”
So, let’s get to it.
Xero vs. Quickbooks: What’s the Difference?
Much like Kenji’s ice cream comparison, having a trusted piece of accounting technology is much better than not having one. And you can rest assured knowing that you can’t go wrong with Xero or QuickBooks. Both of these small business accounting software options are similarly priced and work in similar ways.
As a cloud-based accounting tool, Xero really simplifies bookkeeping for small businesses and larger companies alike. Beyond being a succinctly (and beautifully) designed platform, Xero’s cloud-based services and iOS app make it easy to manage your accounting on the go. It really is one of the best cloud-based accounting services out there with 3.3 million subscribers worldwide.
On the other hand, QuickBooks is generally considered to be the global leader in cloud accounting, with 7+ million subscribers worldwide. It’s designed with small business success in mind, as it automates complex tasks such as bookkeeping and invoicing, and it allows small businesses to customize certain elements to fit their needs.
Here’s a general overview of what you can expect from both platforms:
- Seamless Integration: Xero and QuickBooks both make cloud-based accounting quick and simple. If you’re already using another platform for your business accounting, converting is easy and best of all, fast. You can move your old QBO files directly into Xero in a short amount of time—or vice versa. Enter your banking information is easy, too, delivering the latest updates on your accounts, Paypal, and credit card transactions.
- Complete Visibility: Simply log in to your dashboard and see real-time data about your business finances. On both QuickBooks and Xero dashboards, you can see pertinent information like transactions, invoices, and bills. Members of your team can get instant access, too. Invite your accountant, bookkeeper, or other team members to view your accounts, and they’re in. You have control over who can see what, all while make sure everyone is on the same page.
- Anytime, Anywhere Access: Mobile apps for both QuickBooks and Xero help you manage business finances on the go, perfect for checking in on things in between Skype calls or other meetings. Send and receive invoices, approve employee leave, and view payment history all from your phone or tablet. No more waiting to get to a computer to get caught up on your business; truly work from anywhere, at any time.
- Intuitive Accounting in the Cloud: Xero and QuickBooks both operate in the cloud, so no downloading is required. Not only does that clear up valuable computer memory space, but it also means you receive automatic updates when new features are released. They do the thinking so you don’t have to, and you’re left with the latest versions working to your financial benefit, ultimately saving you time and energy.
Now, let’s break it down further.
Xero vs. QuickBooks: General Philosophy
Xero definitely plays better with others, and QuickBooks wants everything to be contained in their app.
Xero has pledged to continue to be a strong partner of accountants. Xero supports accountants by evangelizing the importance of the client-accountant relationship so their customers can be the best possible accountants to their clients.
Now, juxtapose that with how Intuit rolled out “QuickBooks Live,” which acts as a direct competitor to many of its accountant customers.
In other words, Xero tends to be more philosophically aligned with accountants.
Xero vs. QuickBooks: Pricing
Two other questions we often get are “How much does Xero cost?” and “How much is QuickBooks?” Surprisingly enough, they are pretty comparable in price, although Intuit has been hiking prices more recently.
Xero offers three different pricing plans, starting at $12/ month. The lowest tier is recommended for “sole traders, new businesses, and the self-employed.” The second option is $34/month and aimed for growing small businesses. Finally, the $65/month plan is aimed at larger, established businesses.
QuickBooks Online offers five different pricing plans – $15/month “Self-Employed” option, $30/month “Simple Start” option, $55/month “Essential” option, $85/month “Plus” option, and $200/month “Advanced” option.
Business prices and plans change all the time, so their website will reflect updates before our blog. We linked to both Xero and QBO’s pricing plans above, so check them out for more details. And don’t forget to keep an eye out for bundles and deals!
Xero vs. QuickBooks: For Ecommerce Sellers
Are you an online retailer? If so, you’re probably wondering which accounting software is best for ecommerce companies: Xero or QuickBooks?
Now, there are a few different things you should consider:
Which is the most cost effective for you? Both Xero and QuickBooks offer free trials and various discounts, but look at the price long-term.
Xero offers email and phone support, and we’ve never had any problem getting in touch with them. Plus, we almost never have to contact them for support because Xero for ecommerce just works.
QuickBooks has historically been hard to reach, keeping customers on hold for hours and not solving the problems at hand.
Which features do you care about? For example, if you don’t care about multi-currency, it may be more cost-effective to use Xero.
Which system do you like using better? Only you can answer that, but find the right fit for you.
We’ve found that Xero is more user friendly than QuickBooks for ecommerce sellers (especially for non-accountants).
We’ve heard from several developers who try to integrate with QuickBooks Online, and they’re just pulling their hair out. Xero integration has a tendency to be cleaner.
At the same time, some tools look cleaner and less clunky with QuickBooks integration. It really depends, so be sure to put those free trial periods to use.
Xero vs. QuickBooks: For SaaS & Startups
So, you want to know the best accounting software for SaaS and startups. In this space, Xero and QuickBooks have similar functionalities, too. But let’s break it down further.
Here are a few quick tips for you when deciding between Xero vs. QuickBooks:
You’ll want to go with Xero for startups and SaaS companies if…
- You’re under 40
- You love Slack
- You need unlimited users
- You’d like 24/7 online support
- You love using mobile apps
And you’ll want to go with QuickBooks for startups and SaaS companies if…
- You’re over 40
- You love Teams
- You don’t want to be tied to a contract
- You’d like automatic backups and feature updates
The Bottom Line in the Xero vs. QuickBooks Debate
At the end of the day, neither option is a bad one – both Xero and QuickBooks offer comprehensive features, flexible pricing tiers, a number of integrations for your CRM system, time tracking tools, reporting tools, ecommerce platforms, and more.
As a business owner or founder, deciding between accounting softwares probably will be one of the easier items on your to-do list. Xero and QBO are both solid tools for entrepreneurs and estimates rank them at >90% of the total accounting systems market for small businesses. As long as you’re shifting away from desktop software, spreadsheets, bank statements, and sticky notes, you’re headed in the right direction.
Looking to outsource your accounting? Schedule a call with our team today to get started! We’ll get you set up with QuickBooks or Xero – you choose.