The main differences between Xero vs QuickBooks lie in features and pricing. Xero is more affordable than QuickBooks Online, always includes unlimited users, 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, integrated electronic bill payments, easy-to-find bookkeeping support, and live customer support.
Since both are high-quality accounting software, we don’t pick an overall favorite. However, our evaluation reveals that:
- Xero: Best for companies with over five users and needing affordable inventory management and fixed asset accounting
- QuickBooks Online: Best for businesses seeking comprehensive accounting features, local bookkeeping assistance, and live customer service
I compared the QuickBooks Online plans by looking at the features that most often affect small business accounting decisions: monthly pricing, number of users, core bookkeeping tools, invoicing, bill management, time tracking, inventory, project profitability, reporting, automation, and scalability.
I also considered which businesses each plan fits best. For example, I looked at whether a plan is better suited for a solo contractor, a small service business, a product-based business, a project-based company, or a more established business with multiple users and more complex workflows.
Finally, I reviewed plan limitations and upgrade triggers, such as when a business needs inventory tracking, more users, class and location tracking, batch workflows, advanced reporting, or stronger access controls. My recommendations are based on practical fit rather than a formal scoring rubric.
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|---|---|---|
| Fit Small Business rating | 4.3 ★ | 4.6 ★ |
| Monthly pricing | $20 to $80 | $38 to $275 |
| Number of users | Unlimited | 1 to 25 |
| Free trial | 30 days | 30 days |
| Current discount | Get 90% off for six months when you sign up for Xero by March 31 | 50% off for three months when you sign up right away |
| Average rating on third-party sites | 4.4★ | 4.3★ |
| 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 |
| Visit Xero | Visit QuickBooks Online |
Use cases and pros & cons
Overall Score: 4.3 / 5
| RATING CRITERIA | Value | 4.1 out of 5 | |
|---|---|---|---|
| General | 5 out of 5 | ||
| Banking | 4.4 out of 5 | ||
| Accounts Receivable | 4.4 out of 5 | ||
| Accounts Payable | 4.6 out of 5 | ||
| Inventory | 4.3 out of 5 | ||
| Reporting | 4.8 out of 5 | ||
| Project Accounting | 5 out of 5 | ||
| Sales Tax | 5 out of 5 | ||
| Mobile App | 3.7 out of 5 | ||
| Integrations | 5 out of 5 | ||
| Usability | 1.9 out of 5 | ||
| User Reviews | 4.4 out of 5 |
Pros
- Has robust integration options through the Xero App Store
- Offers enhanced project accounting and fixed asset management tools
- Allows for unlimited users
- Lets you track inventory in all its plans
Cons
- Allows each subscription to be used only for a single set of books
- Has an entry-level plan that supports only five bills and 20 invoices
- Lacks a discounted annual billing option
- Has a small network of Xero-certified bookkeepers compared to QuickBooks Online
- Businesses needing an alternative to QuickBooks: Small businesses that find QuickBooks expensive switch to Xero because it offers many of the advanced features found in QuickBooks Online Plus, such as inventory management and fixed asset accounting, at a lower price. In fact, Xero is one of our best QuickBooks alternatives.
- Companies seeking affordable fixed asset management: All Xero plans let you track fixed assets, while QuickBooks requires its most expensive plan for the same feature. I like this for businesses with a lot of fixed assets to track.
- Businesses with more than five users: QuickBooks Online Plus caps you at five, which can be limiting as your business grows. Xero, on the other hand, offers unlimited users on all plans, so you never have to worry about outgrowing your software. I prefer Xero for users who anticipate having a large team in the future.
Overall Score: 4.6 / 5
| RATING CRITERIA | Value | 3.8 out of 5 | |
|---|---|---|---|
| General | 5 out of 5 | ||
| Banking | 5 out of 5 | ||
| Accounts Receivable | 4.9 out of 5 | ||
| Accounts Payable | 4.9 out of 5 | ||
| Inventory | 3.9 out of 5 | ||
| Reporting | 5 out of 5 | ||
| Project Accounting | 4.6 out of 5 | ||
| Sales Tax | 4.8 out of 5 | ||
| Mobile App | 3.9 out of 5 | ||
| Integrations | 5 out of 5 | ||
| Usability | 4.5 out of 5 | ||
| User Reviews | 4.3 out of 5 |
Pros
- Is our overall best small business accounting software
- Has a huge network of QuickBooks Online ProAdvisors
- Scalable plans priced by number of features included
- Provides a wide selection of customizable accounting reports
Cons
- Won’t let you enter bills and track time worked using the mobile app
- Offers fixed asset accounting only in the most expensive plan
- Lacks industry-specific features
- Doesn’t let you call phone support directly unless you upgrade to Advanced
Read our QuickBooks Online review
- Businesses looking for a local bookkeeper: QuickBooks Online is so widely used among small business owners and accountants that you’ll have no problem finding a local bookkeeper to help you use QuickBooks. You can find a QuickBooks ProAdvisor by location and learn more about their services. This huge support network is one reason we awarded QuickBooks Online our best small business accounting software. In comparison, Bookkeeper360 provides online bookkeeping services to both Xero and QuickBooks Online users, but there are many more that work with QuickBooks Online. Xero also has a support network of Xero Advisors, but it is much smaller.
- Businesses wanting live customer service: QuickBooks offers live customer service via telephone and live chat. Xero doesn’t offer any live help, and you must email customer support or use its online resources to solve the problem yourself.
- Businesses seeking integrated bill payment options: QuickBooks Online users have access to QuickBooks Bill Pay, which is free for up to five ACH payments per month. For more than that, users will pay anywhere from $15 to $90 per month. QuickBooks Bill Pay offers many useful features, including approval workflows and automatic invoice capture. For more information on the solution, read our QuickBooks Bill Pay review.
- Businesses requiring offline access to their files: If internet connectivity is a problem in your area, a more feasible solution is desktop-based software, like AccountEdge for very small companies and QuickBooks Enterprise for larger companies. Both are locally installed software that can run without an internet connection. Learn more in our review of AccountEdge and QuickBooks Enterprise review.
- Small businesses looking for free accounting software: While QuickBooks Online and Xero are arguably two of the most powerful accounting applications, they’re also among the most expensive. If you can’t afford premium tools, you should check out Wave, our overall best free accounting software. You can check if it fits the bill through our review of Wave.
- Businesses needing a fully functional mobile app: Xero’s app doesn’t let you view reports and accept payments, while QuickBooks’s app can’t record bills and bill payments. We recommend Zoho Books’ unbeatable app, which contains almost all the features of the desktop interface, such as the ability to send invoices, accept payments, and enter bills. Our Zoho Books review provides more details about the app.
If you need additional recommendations, check out our guide to the best small business accounting software.
User reviews: Tie
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|---|---|---|
| Average rating on third-party sites | 4.4★ | 4.3★ |
| Users like |
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| Users dislike |
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Despite a marginal 0.1-point gap in the scores, I still see Xero and QuickBooks as a tie. The difference is too small to sway my decision, and users haven’t pointed out any major factors that would make me declare an overall winner. Both have their strengths and trade-offs, so the best choice really comes down to individual business needs.
Xero users appreciate its affordability, batch deletion, and easy bank reconciliation, though QuickBooks Online is generally more intuitive. Some find Xero limiting in income and expense tracking and the ability to export receipts, areas where QuickBooks offers more flexibility. While Xero has strong features, I agree that QuickBooks Online provides a smoother experience, especially with bank reconciliation.d
QuickBooks Online is praised for its ease of use, customizable dashboard, and robust accounting features, including strong expense tracking and automated transaction categorization. However, I find its customer support not always accessible, and the higher price with limited user counts can be a drawback. Still, its advanced features and flexibility make it a worthwhile investment for many businesses.
Pricing: Xero wins
| Xero | QuickBooks Online | |
|---|---|---|
| Fit Small Business score | 4.1 out of 5 | 3.5 out of 5 |
| Monthly Pricing |
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| Number of Monthly Bills | Limited to five bills for the Early plan but unlimited bills for Growing and Established plan. | Unlimited in all plans |
| Number of Monthly Invoices | Limited to 20 invoices for the Early plan but unlimited invoices for the Growing and Established plan. | Unlimited in all plans |
| Free Trial | 30 days | 30 days |
Xero is more affordable and scalable than QuickBooks since all subscriptions include unlimited users. If you run a microbusiness and only need to track a few bills and invoices, Xero’s Early plan might be enough. However, if you work with multiple vendors and customers and need more advanced features, QuickBooks Online’s Plus tier is worth considering. That said, I find Xero Established to be an already affordable option, especially considering it’s the highest-tier plan.
Features: QuickBooks Online wins
| Xero | QuickBooks Online | |
|---|---|---|
| Banking | 4.4★ | 5.0★ |
| A/R management | 4.4★ | 4.9★ |
| A/P management | 4.6★ | 4.9★ |
| Inventory management | 4.3★ | 3.9★ |
| Project accounting | 5.0★ | 4.8★ |
| Tax | 5.0★ | 5.0★ |
| Rating explanation: 5★: Excellent; 4★: Very good; 3★: Good; 2★: Fair; 1★: Poor | ||
QuickBooks Online leads in many categories, but Xero has some slight advantages in terms of fixed asset management, project accounting, and taxes. We tackle these differences between Xero and QuickBooks in detail in the following sections.
Banking: QuickBooks Online wins
| Xero | QuickBooks Online | |
|---|---|---|
| Fit Small Business score | ✓ | ✓ |
| Connect to bank account | ✓ | ✓ |
| Reconcile transactions through bank feeds | ✓ | ✓ |
| View outstanding transactions | ✓ | ✓ |
| Generate reconciliation reports | ✓ | ✓ |
| Reconcile transactions without bank feeds | ✕ | ✓ |
While both programs offer bank reconciliation, QuickBooks is more flexible. It allows you to enter the ending bank balance and manually mark cleared transactions, something Xero doesn’t support in the same way. However, Xero does let you trigger reconciliation by uploading a bank statement, making it possible to reconcile without a bank feed. QuickBooks, on the other hand, offers more flexibility by allowing both manual transaction entry and reconciliation without requiring a bank connection.
A/R management: QuickBooks Online wins
| Xero | QuickBooks Online | |
|---|---|---|
| Fit Small Business score | 4.4 out of 5 | 4.5 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 | ✕ | ✓ |
| Customer portal | ✕ | ✕ |
QuickBooks scored higher than Xero, but it didn’t get a perfect mark because it lacks a customer portal. I didn’t place a large weight on this feature, but it’s still a nice-to-have. It offers plenty of customization options, which is a big plus for businesses that want to maintain a polished, professional brand image.
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.
Xero, on the other hand, lets you add a company logo and edit fields, but it falls short by not allowing color customization, which is necessary for personalizing invoices. Because of this limitation, I had to dock a few points from Xero.
A/P management: QuickBooks Online wins
| Xero | QuickBooks Online | |
|---|---|---|
| Fit Small Business score | 4.7 out of 5 | 4.9 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 | ✕ | ✓ |
| Vendor portal | ✕ | ✕ |
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.
In addition, QuickBooks Online users have access to QuickBooks Bill Pay, which has many useful features — including automatic bill capture, payment via ACH or check, approval workflows, batch bill processing, 1099 filing, and the ability to send user roles and permissions. Read our QuickBooks Bill Pay review for more details on the solution.
Inventory management: Tie
| Xero | QuickBooks Online | |
|---|---|---|
| Fit Small Business score | 4.3 out of 5 | 3.9 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 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 | 4.6 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 | ✓ | Advanced plan only |
You can rely on Xero and QuickBooks Online for project accounting, as both let you create estimates and track projects. With QuickBooks Online, you can track expenses by project in the Plus plan, but comparing them to estimated costs is only possible in the Advanced tier. Since this is the highest and most expensive plan, it makes the feature far less accessible.
Xero, on the other hand, includes project accounting in the Established plan, which is more affordable and also lets you generate reports comparing actual to estimated labor and inventory. QuickBooks Online does not offer this reporting capability.
Tax: Xero wins
| Xero | QuickBooks Online | |
|---|---|---|
| Fit Small Business score | 5 out of 5 | 4.8 out of 5 |
| View sales tax liability detail | ✓ | ✓ |
| Pay sales tax liability with a check | ✓ | ✓ |
| Pay sales tax liability electronically | ✓ | ✕ |
| Create a sales tax return | ✓ | ✕ |
I give Xero a slight edge in this category because it lets you create a sales tax return and pay sales tax liability by check or electronically. However, the ability to create a tax return is only available in Xero Practice Manager, which not all users may have access to. While neither Xero nor QuickBooks lets you file a sales tax return, Xero’s features make sales tax management more accessible.
Usability: QuickBooks Online wins
In evaluating usability for my Xero vs QuickBooks comparison, I evaluated it in four subcriteria: bookkeeping support, customer service, ease of use, and ease of setup.
Overall, I gave QuickBooks Online the win in this category because it is a more user-friendly option due to its better customer service, stronger bookkeeping support, and smoother setup process. Xero still has valuable features, especially for businesses that prefer email-based support and independent bookkeeping advisors, but it falls short in accessibility and flexibility.
Bookkeeping assistance
QuickBooks stood out in my scoring for bookkeeping assistance because it provides in-house bookkeeping services and has a well-established advisor network available in all 50 states. Xero does have an independent advisor network, but it lacks direct bookkeeping support, making it less hands-on for businesses that need professional assistance.
Customer service
I rated QuickBooks Online higher in customer service because it offers multiple support channels, including live chat, chatbot assistance, and callback phone support. While neither platform provides 24/7 live assistance, QuickBooks gives users more direct ways to resolve issues. Xero, on the other hand, only offers email support, which can slow down response times and make troubleshooting frustrating.
Ease of use
In terms of ease of use, I rated QuickBooks higher because its customizable dashboard allows users to tailor their workspace for better efficiency. It also makes starting a new transaction more convenient with one-click access. Xero’s dashboard is slightly more readable, but it lacks customization options, which limits flexibility for users who prefer a more personalized interface.
Ease of setup
I found QuickBooks to be much easier to set up because it offers assisted onboarding, a guided company setup wizard, and direct input for beginning balances via journal entries. Xero allows users to import beginning balances, but without a setup wizard or formal onboarding support, the transition can be more challenging, especially for first-time users.
Mobile app functionality: QuickBooks Online wins
| Xero | QuickBooks Online | |
|---|---|---|
| Fit Small Business score | 3.7 out of 5 | 4 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 Online is the winner in this category because of its many features that Xero lacks. This includes the ability to accept payments, view reports, and assign expenses to customers or projects. However, both mobile apps let you send invoices, capture receipts, enter bill payments, and categorize expenses in the bank feed.
How I evaluated Xero vs QuickBooks Online
I 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. #pricing-chart-2237965 .fit-rubric-pie { background: conic-gradient( #000000 0deg,#000000 18deg,#dfdfdf 18deg,#dfdfdf 360deg ); } #general-features-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 18deg,#5bb3ed 18deg,#5bb3ed 43.2deg,#dfdfdf 43.2deg,#dfdfdf 360deg ); } #banking-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 43.2deg,#005389 43.2deg,#005389 68.4deg,#dfdfdf 68.4deg,#dfdfdf 360deg ); } #a-p-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 68.4deg,#3c94ce 68.4deg,#3c94ce 93.6deg,#dfdfdf 93.6deg,#dfdfdf 360deg ); } #a-r-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 93.6deg,#c3e7ff 93.6deg,#c3e7ff 118.8deg,#dfdfdf 118.8deg,#dfdfdf 360deg ); } #inventory-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 118.8deg,#7cb1d4 118.8deg,#7cb1d4 154.8deg,#dfdfdf 154.8deg,#dfdfdf 360deg ); } #project-accounting-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 154.8deg,#164c70 154.8deg,#164c70 190.8deg,#dfdfdf 190.8deg,#dfdfdf 360deg ); } #tax-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 190.8deg,#5990b5 190.8deg,#5990b5 205.2deg,#dfdfdf 205.2deg,#dfdfdf 360deg ); } #reporting-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 205.2deg,#82bee6 205.2deg,#82bee6 219.6deg,#dfdfdf 219.6deg,#dfdfdf 360deg ); } #ease-of-use-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 219.6deg,#263c48 219.6deg,#263c48 327.6deg,#dfdfdf 327.6deg,#dfdfdf 360deg ); } #mobile-app-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 327.6deg,#3d4f74 327.6deg,#3d4f74 345.6deg,#dfdfdf 345.6deg,#dfdfdf 360deg ); } #user-reviews-chart-2237965 .fit-rubric-pie { background: conic-gradient( #dfdfdf 0deg,#dfdfdf 345.6deg,#608abc 345.6deg,#608abc 360deg ); }
In evaluating pricing, we considered the billing cycle (monthly or annual) and number of users.
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.
The banking section of this case study focuses on cash management, bank reconciliation, and bank feed connections. The software must have bank integrations to automatically feed bank or card transactions. The bank reconciliation module must also let users reconcile accounts with or without bank feeds for optimal ease of use. Lastly, the software must generate useful reports related to cash.
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.
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.
Businesses with inventory items should choose accounting software that can track inventory costs, manage cost of goods sold (COGS), and monitor inventory units.
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.
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.
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.
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.
The software must also have a mobile app to enable users to perform accounting tasks even when away from their laptops or desktops.
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. Beginning August 1, 2024, prices will run from $35 to $235 per month.
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, whereas it’s offered only in the most expensive plan of QuickBooks Online, Advanced.
QuickBooks is generally praised for having a more intuitive user interface, especially for users without an accounting background. Xero, on the other hand, might be slightly more suited to accountants and bookkeepers due to its design.
Xero stands out with unlimited users on all plans, which can be a big advantage for larger teams or businesses that require collaboration with accountants.
Bottom line
Xero and QuickBooks Online are both powerful accounting software, and my evaluation confirms why they’re among the top choices in the industry. While they offer similar features, each has its own strengths and trade-offs.
Xero is the better option if you need unlimited users and affordable inventory and fixed-asset accounting. However, if comprehensive bank reconciliation, class and location tracking, reliable customer support, and easy access to local bookkeepers are priorities, QuickBooks Online comes out on top.
