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.
Since Xero and QuickBooks are both high-quality accounting software, we don’t pick an overall favorite. However, our Xero vs QuickBooks comparison reveals that:
- Xero is ideal for companies with more than five users and needing affordable inventory management and fixed asset accounting
- QuickBooks Online is best for businesses seeking comprehensive accounting features, local bookkeeping assistance, and live customer service
We are driven by the Fit Small Business mission to provide you with the best answers to your small business questions—allowing you to choose the right accounting solution for your needs. Our meticulous evaluation process makes us a trustworthy source for accounting software insights. We don’t just scratch the surface; we immerse ourselves in every platform we review by exploring the features down to the finest nuances.
We have an extensive history of reviewing small business accounting software, and we stay up-to-date with the latest features and enhancements. Our first-hand experience, guided by our internal case study, helps us understand how the different products compare with each other and how they work in real-world scenarios.
4.1 ★ | 4.3 ★ | |
Monthly Pricing | $15 to $78 | $30 to $200 |
Number of Users | Unlimited | 1 to 25 |
Free Trial | 30 days | 30 days |
Current Discount | ✕ | 50% off for three months when you sign up right away |
Average Rating on Third-party Sites | ||
Advantages Over the Other |
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Ease of Sharing With External Accountants | Invitation can be easily sent via email | Invitation can be easily sent via email |
Scalability | Can add an unlimited number of users for free | Supports up to 25 users in the highest plan; can’t add extra seats |
Mobile App | iOS and Android | iOS and Android |
Ease of Use | Generally easy to use but may take time to master | Easier to set up and use than Xero |
Use Cases and Pros & Cons
Fit Small Business Case Study
We formulated this detailed QuickBooks Xero comparison using our internal case study. Below are the comparative results.
Xero vs Quickbooks Online FSB Case Study
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Xero From $15 per month; tested at $78 monthly (Established)
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Quickbooks Online Starting at $30 per month; tested at $90 monthly (Plus)
QuickBooks Online came out on top for features, ease of use, customer support but Xero wins in pricing. We’ll explain our Xero vs QuickBooks comparison findings in greater detail in the following sections.
User Reviews: Tie
Xero | QuickBooks Online | |
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Average Rating on Third-party Sites | ||
Users Like |
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Users Dislike |
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We consider this a draw, and the ratings presented above are simply reflections of the average scores of Xero and QuickBooks Online on review sites. We looked into the positive and negative feedback of both software, and we found that both received a fair share of praises and complaints.
A satisfied Xero user shared that the program is the most user-friendly accounting software on the market. Xero can be easy to use after you become familiar with it, but we believe QuickBooks Online is generally more intuitive and easier to set up. Additionally, one reviewer said that they were able to easily set up bank feeds and reconcile bank transactions—and what we like about the reconciliation screen is that it uses a side-by-side layout, making it easy to identify and match corresponding transactions.
Moreover, another likes that Xero has a batch-delete feature, unlike QuickBooks Online. They explained that if you import 500 transactions into QuickBooks incorrectly, you have to delete them all one by one. This is a time-saving feature for businesses that handle a large volume of transactions on a daily basis.
On the flip side, there are some complaints about limited income and expense tracking categories. This is one area where QuickBooks wins over Xero. If your business has varied operations, you might prefer QuickBooks, as it offers more flexibility in tracking financial activities. For instance, you can track income and expenses by classes and locations.
One reviewer mentioned that a critical feature missing in Xero is the inability to export expense receipts and attach them to invoices. This feature is available in QuickBooks Online, and it even allows you to create a digital transaction using the uploaded receipt.
As of this writing, Xero earned the following average scores on popular review sites:
Just like Xero, QuickBooks Online is praised for its ease of use. However, we are more impressed with QuickBooks because its dashboard is more customizable than Xero’s.
One user expressed that they like that QuickBooks has more robust accounting features than most competitors. Some also explained that QuickBooks offers excellent expense-tracking features. We agree with this, and one of the features we like is that QuickBooks remembers the categories of items that have been entered previously. Additionally, you can create explicit rules to help QuickBooks correctly classify transactions automatically.
Unfortunately, many don’t have positive experiences with QuickBooks’ customer support. One complained that they are often transferred to different departments when they contact QuickBooks. We believe the quality of customer service you’ll receive varies a lot based on the agent. Additionally, some users complained that QuickBooks Online is a bit expensive. While it is moderately priced, it can be cost-effective considering the value it can provide to your business.
Here’s how QuickBooks Online is rated on review websites:
Pricing: Xero Wins
Xero | QuickBooks Online | |
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Fit Small Business Score | 3.5 out of 5 | 3 out of 5 |
Monthly Pricing |
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Number of Users | Unlimited in all plans |
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Number of Monthly Bills |
| Unlimited in all plans |
Number of Monthly Invoices |
| Unlimited in all plans |
Free Trial | 30 days | 30 days |
Xero is more affordable and scalable than QuickBooks since all subscriptions have unlimited users. If you have a microbusiness and only need to manage and track a few bills and invoices, then you might do well with Xero’s Early plan. However, if you work with multiple vendors and customers and need more enhanced features, you should consider QuickBooks Online’s Plus tier.
Features: QuickBooks Online Wins
Banking & Cash Management: QuickBooks Online Wins
Xero | QuickBooks Online | |
---|---|---|
Fit Small Business Score | 4.6 out of 5 | 5 out of 5 |
Connect to Bank Account | ✓ | ✓ |
Reconcile Transactions Through Bank Feeds | ✓ | ✓ |
View Outstanding Transactions | ✓ | ✓ |
Generate Reconciliation Reports | ✓ | ✓ |
Reconcile Transactions Without Bank Feeds | ✕ | ✓ |
While both programs include bank reconciliation features, QuickBooks is much more flexible as it allows you to reconcile a bank account by entering the ending bank balance and manually marking transactions that have cleared your bank. Another notable difference is that QuickBooks Online lets you upload your file of transactions, so you aren’t required to connect your bank account. With Xero, you have to connect your account to reconcile your transactions.
A/R: QuickBooks Online Wins
Xero | QuickBooks Online | |
---|---|---|
Fit Small Business Score | 4.8 out of 5 | 5 out of 5 |
Create & Send Invoices | ✓ | ✓ |
Upload Logo | ✓ | ✓ |
Email & Print the Invoice | ✓ | ✓ |
Send Invoices From the Mobile App | ✓ | ✓ |
View Outstanding Invoices | ✓ | ✓ |
Create Recurring Invoices | ✓ | ✓ |
Choose From Invoice Templates | ✕ | ✓ |
Change Invoice Colors | ✕ | ✓ |
Calculates Sales Tax Rate Based on Customer Address | ✕ | ✓ |
You might prefer QuickBooks for invoicing and A/R management. It offers plenty of customization options, which can be a great deal for those wanting to present and maintain a professional brand image. On the other hand, Xero lets you add your company logo and edit fields, but you can’t change the invoice colors.
Another reason QuickBooks Online stands out is its ability to calculate sales tax rates automatically based on the customer address, which is something Xero can’t do. Hence, it’s no surprise that QuickBooks Online is our overall best invoicing accounting software.
A/P Management: QuickBooks Online Wins
Xero | QuickBooks Online | |
---|---|---|
Fit Small Business Score | 4.9 out of 5 | 5 out of 5 |
Manage & Track Unpaid Bills | ✓ | ✓ |
Add & Manage Vendors | ✓ | ✓ |
Capture Expense Receipts | ✓ | ✓ |
Create Recurring Bills | ✓ | ✓ |
Enter Purchase Orders (POs) | ✓ | ✓ |
Enter a Vendor Credit | ✓ | ✓ |
Pay an Independent Contractor | ✓ | ✓ |
Create Recurring Payments | ✕ | ✓ |
Both have great A/P features, but QuickBooks Online is slightly better due to its ability to generate recurring payments. Xero lets you create a recurring bill but not the payment, which means it doesn’t charge your checking account automatically.
Fixed Asset Management: Xero Wins
Note that fixed asset accounting isn’t part of our case study, so there are no scores.
Xero | QuickBooks Online | |
---|---|---|
Record a Fixed Asset Purchase | ✓ | ✓ |
Track Fixed Assets | ✓ | ✓ |
Calculate Depreciation | ✓ | ✓ |
Set Up Separate Depreciation for Taxes | ✓ | ✓ |
Track Depreciation Schedules | ✓ | ✓ |
Record the Sale of a Fixed Asset | ✓ | ✓ |
Availability | All plans | Advanced plan |
QuickBooks Online didn’t used to have fixed asset accounting features, but they’ve been recently added to the highest tier, Advanced. Now, just like Xero, QuickBooks Online, allows you to record a fixed asset purchase, track the asset, and calculate depreciation. However, we want to emphasize that Xero offers fixed asset accounting in all its plans, making it an affordable QuickBooks alternative for fixed asset management.
Inventory Management: Tie
Xero | QuickBooks Online | |
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Fit Small Business Score | 4.9 out of 5 | 4.9 out of 5 |
Set Up an Inventory Item | ✓ | ✓ |
Add an Inventory to an Invoice | ✓ | ✓ |
View Stocks on Hand | ✓ | ✓ |
Track Total Units & Costs | ✓ | ✓ |
Decrease Inventory for Units Returned to Vendor | ✓ | ✓ |
Record Inventory Returned Into Inventory | ✓ | ✓ |
Inventory Management Availability | All plans | Plus and Advanced |
Both Xero and QuickBooks Online do a great job of accounting for inventory and calculating the cost of your inventory sold automatically. However, inventory accounting is included in all Xero plans while it’s only in the Plus and Advanced versions of QuickBooks Online. So, if you want a low-cost inventory management solution, go with Xero.
Project Accounting: Xero Wins
Xero | QuickBooks Online | |
---|---|---|
Fit Small Business Score | 5 out of 5 | 4.3 out of 5 |
Create Estimates | ✓ | ✓ |
Create and Track Projects | ✓ | ✓ |
Add Labor to Estimates | ✓ | ✓ |
Add Inventory to Estimates | ✓ | ✓ |
Add Sales Taxes to Estimates | ✓ | ✓ |
Assign Actual Labor to Project | ✓ | ✓ |
Compare Estimated vs Actual Project Costs | ✓ | ✓ |
You can rely on Xero and QuickBooks Online for project accounting. Both allow you to create estimates and set up and track projects. However, a crucial difference between QuickBooks and Xero is that all of Xero’s plans allow you to compare estimated vs actual project costs while, with QuickBooks Online, you have to subscribe to Advanced to be able to use this feature. That said, if you want a more affordable solution for detailed profitability tracking, Xero is the better choice.
Integrations: Tie
Xero | QuickBooks Online | |
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Fit Small Business Score | 5 out of 5 | 5 out of 5 |
Approximate Number of Integrations Available | 800-plus | 800-plus |
Payroll Integration | ✓ | ✓ |
Time Tracking Integration | ✓ | ✓ |
Electronic Bill Pay Integration | ✓ | ✓ |
QuickBooks Online and Xero both have a large collection of integrated apps, which should be enough to cover your business automation needs.
Xero boasts around 800 integrations, connecting to plenty of major business software applications, such as:
- HubSpot
- Mailchimp
- Google Contacts
- WorkflowMax
- Hubdoc
- Zapier
- Fathom
- Pipedrive
- Constant Contact
- Agile CRM
- Spotlight
- PayPal
QuickBooks Online has more than 800 integrations, including:
- QuickBooks Payroll
- QuickBooks Commerce
- QuickBooks Time
- Insightly CRM
- Gusto
- ADP
- BILL
- ClockShark
- eBillity
Mobile App Functionality: Tie
Xero | QuickBooks Online | |
---|---|---|
Fit Small Business Score | 2.6 out of 5 | 3 out of 5 |
Accessibility | iOS and Android | iOS and Android |
Issue Invoices | ✓ | ✓ |
Capture Expense Receipts | ✓ | ✓ |
Categorize Expenses From Bank Feeds | ✓ | ✓ |
Record Bills | ✓ | ✕ |
Enter Bill Payments | ✓ | ✕ |
Accept Payments | ✕ | ✓ |
View Reports | ✕ | ✓ |
Assign Expenses to Customers or Projects | ✕ | ✓ |
QuickBooks and Xero are tied in this category because each platform offers features that the other one doesn’t. For instance, QuickBooks Online lets you accept payments but can’t record bills while Xero allows you to enter bills but can’t process online payments. If mobile payment is important to you, QuickBooks’ app might be better. If you often need to record bills and bill payments on the go, Xero’s mobile app might be preferable.
Assisted Bookkeeping: Tie
Xero | QuickBooks Online | |
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Assisted Bookkeeping Provider | Bookkeeper360 | QuickBooks Live |
Monthly Pricing | Starts at $399 | $200 to $600 |
Weekly Pricing | Starts at $549 | N/A |
Access to Experts | ✓ | ✓ |
Communication | Phone and email | Phone and one-way video chat |
Account Reconciliation | ✓ | ✓ |
Bookkeeping Advice | ✓ | ✓ |
Accrual-based Accounting | ✓ | ✕ |
Cash Management Insights | ✓ | ✕ |
While it’s not part of our case study, we evaluated Xero vs QuickBooks Online in terms of assisted bookkeeping. We consider this a draw since each program is designed for specific business needs.
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.
Xero partners with Bookkeeper360 to provide assisted bookkeeping services, giving you on-demand access to a team of accounting and tax professionals who can help you manage your bookkeeping duties. Bookkeeper360 offers three virtual bookkeeping packages, depending on how often you need assistance: pay-as-you-go, monthly, or weekly basis. Head out to our Bookkeeper360 review’s pricing section for a detailed rundown of the three bookkeeping packages.
You can get QuickBooks Live bookkeeping, an add-on that can be activated from the left menu bar of your QuickBooks dashboard if you need a QuickBooks-certified bookkeeper to help you complete your bookkeeping tasks. They’ll help you reconcile your bank and credit card statements and prepare monthly reports.
After the initial cleanup, you’ll receive assistance with importing historical data, customized setup of your chart of accounts, live one-on-one video chat support with your bookkeeper, customized reports, and a free audit request of your books at any time.
QuickBooks Live doesn’t offer tax filing or payroll services, unlike Bookkeeper360. Prices for QuickBooks Live Bookkeeping scale with the monthly expenses of your business, which means higher costs for businesses with higher expenses. We break down the prices in our QuickBooks Live Bookkeeping review’s pricing section.
Ease of Use: QuickBooks Online Wins
Xero | QuickBooks Online | |
---|---|---|
Fit Small Business Score | 3.8 out of 5 | 4.2 out of 5 |
Accessibility | Cloud | Cloud |
Quick Links & Shortcuts | ✓ | ✓ |
Customizable Dashboard | ✕ | ✓ |
Overall Ease of Use | Moderate | Easy |
QuickBooks Online takes the lead because it’s generally easier to use than Xero. While Xero is easier to set up, QuickBooks has a more intuitive and customizable dashboard and has time-saving features. For instance, QuickBooks Online allows you to add an inventory item from the invoicing screen, something you can’t do with Xero.
Customer Support: QuickBooks Online Wins
Xero | QuickBooks Online | |
---|---|---|
Fit Small Business Score | 3.5 out of 5 | 3.8 out of 5 |
Chatbot | ✓ | ✓ |
Email Support | ✓ | ✓ |
Self-help Resources | ✓ | ✓ |
Phone Support | ✕ | Callback only |
Live Chat Support | ✕ | ✓ |
Large Network of Independent Bookkeepers | ✕ | ✓ |
QuickBooks Online’s customer support is better than Xero’s since you can interact with an agent through a phone call. You can’t initiate a call, but you can submit a ticket and wait for an agent to call you. You can also talk to a real person through live chat.
How We Evaluated Xero vs QuickBooks Online
We evaluated Xero vs QuickBooks based on ease of use, pricing, and how well each performed against the ideal features we’re seeking—including project accounting, inventory management, and mobile accounting.
5% of Overall Score
In evaluating pricing, we considered the billing cycle (monthly or annual) and number of users.
7% of Overall Score
This section focuses more on first-time setup and software settings. The software must be quick and easy to set up for new users. Even after initial setup, the software must also let users modify information like company name, address, entity type, fiscal year-end, and other company information.
7% of Overall Score
7% of Overall Score
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.
7% of Overall Score
This takes into account customer management, revenue recognition, invoice management, and collections. The software must have A/R features that make it easy for users to collect payments from customers, remind customers of upcoming or overdue invoices, and manage customer obligations through analytic dashboards or reports.
10% of Overall Score
Businesses with inventory items should choose accounting software that can track inventory costs, manage cost of goods sold (COGS), and monitor inventory units.
10% of Overall Score
Service or project-based businesses should choose accounting software that can track project costs, revenues, and profits. The software must have tools to track time, record billable hours or expenses, send invoices for progress billings, or monitor project progress and performance.
4% of Overall Score
In this section, we’re looking at sales tax features. The software must have features that allow users to set sales tax rates, apply them to invoices, and enable users to pay sales tax liability.
4% of Overall Score
Reports are important for managers, owners, and decision-makers. The software must have enough reports that can be generated with a few clicks. Moreover, we’d also like to see customization options to enable users to generate reports based on what they want to see.
30% of Overall Score
Ease of use gets the highest weight in this case study because we want to give more credit to easy accounting software. For this section, we considered customer service, support network, and a subjective expert opinion score. Users must have easy access to customer service channels in case of problems, questions, or assistance.
Support network refers to a community of software users that can extend professional help to businesses. Having an independent software expert perform the bookkeeping is good for overall ease of use. Lastly, our expert opinion score is our subjective rating based on our experience in trying the software.
5% of Overall Score
The software must also have a mobile app to enable users to perform accounting tasks even when away from their laptops or desktops.
4% of Overall Score
We went to user review websites to read first-hand reviews from actual software users. This user review score helps us give more credit to software products that deliver a consistent service to their customers.
Frequently Asked Questions (FAQs)
Yes, you can use Xero to track inventory, and the feature is available in all plans.
Depending on the plan you select, QuickBooks Online’s monthly prices run from $30 for the Simple Start plan to $200 for the Advanced plan.
Yes, both have a fixed asset manager that allows you to track fixed assets and calculate depreciation. Fixed asset accounting is part of all Xero’s plans, while it’s offered only in the most expensive plan of QuickBooks Online—Advanced.
Bottom Line
Xero and QuickBooks Online are robust accounting software programs and, in our case study, both prove why they’re the leading tools in the industry. They may have almost the same features, but each has its own strengths and drawbacks.
If your business needs many users to access your accounting data and requires low-cost inventory and fixed-asset accounting, Xero is the better choice. If you need comprehensive bank reconciliation, class and location tracking, good customer support, and easy access to local bookkeepers, then QuickBooks Online wins.
User review references:
[1]Capterra | Xero
[2]G2.com | Xero
[3]Capterra | QuickBooks Online
[4]G2.com | QuickBooks Online