Zoho Books and Xero are equally popular accounting software. In our Zoho Books vs Xero comparison, Zoho Books wins because of its advanced inventory management features and flexible pricing tiers. We recommend Xero for companies with large accounting teams:
- Zoho Books: Small businesses looking for a full-featured accounting program with the best-in-class mobile app
- Xero: Small businesses looking for an accounting platform with a fixed asset manager and unlimited users for a low price
While both are good accounting solutions, you’ll struggle to find a bookkeeper near you for support. QuickBooks Online has an enormous network of independent ProAdvisors that make it easy to find local help.
- QuickBooks Online: Best for small businesses that want a local bookkeeper to support their DIY accounting
The Fit Small Business editorial policy is driven by the 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.
 |  |  | |
|---|---|---|---|
4.5 ★ | 4.1 ★ | 4.3 ★ | |
Monthly Pricing | $0 to $275 | $20 to $80 | $35 to $235 |
Annual Pricing | $0 to $240 | ✕ | ✕ |
Free Trial | 14 days | 30 days | 30 days |
Number of Users | Unlimited | 1 to 25 | |
Bank Reconciliation | ✓ | ✓ | ✓ |
Invoice Creation | ✓ | ✓ | ✓ |
Expense Tracking | ✓ | ✓ | ✓ |
Fixed Asset Tracking | ✕ | ✓ | ✕ |
Class Tracking | ✓ | ✓ | ✓ |
Multicurrency Accounting | ✓ | ✓ | ✓ |
Basic Inventory Tracking | ✓ | ✓ | ✓ |
Advanced Inventory Tracking | ✓ | ✕ | ✕ |
Sales Tax Accounting | ✓ | ✓ | ✓ |
Assisted Bookkeeping Network | Limited | Limited | Huge |
Mobile App | Android and iOS; send invoices, receive payments, capture receipts, record time worked Account admin may grant full access to accountant | Android and iOS; send invoices, receive payments, capture receipts | Android and iOS; send invoices, receive payments, capture receipts |
Ease of Sharing With External Accountants | Account admin may grant full access to accountant | Account admin may grant full access to accountant | Account admin may grant full access to accountant |
Scalability | Scalable; can add more users for an additional cost | Very scalable; has decent tiers and unlimited seats | Fairly scalable; has good plans but limited seats |
Ease of Use | Moderate for users with accounting software experience | Moderate for users with accounting software experience | Moderate for users with accounting software experience |
Average Rating on Third-party Sites | 4.3 | ||
Use Cases and Pros & Cons
- Businesses with less than $50,000 in revenue: Zoho Books is absolutely free forever for businesses with less than $50,000 in annual revenue. However, the free plan is limited to one user. Xero has no free plan.
- Product-based businesses: In the Elite plan, you can enjoy advanced inventory control features such as serial number tracking, batch tracking, and shipment tracking, which are features absent in Xero’s inventory module. You can also print shipping labels, integrate up to two Shopify stores, and manage up to five warehouses with Zoho Books.
- Mobile app: Zoho Books tops our list of the best free mobile invoicing apps. The app includes basic accounting tasks like sending invoices, assigning expenses, entering bill payments, recording time worked, and even viewing reports. The functionality of Zoho Books’ mobile app is way better than Xero’s.
- Customer service: We like that Zoho Books gives users many ways to contact the provider or be contacted by the provider. Unlike Xero, Zoho Books has a customer service hotline, email, chatbot, and a live chat representative. In case you have problems with your account, it can help you right away.
- Businesses interested in other Zoho Apps: Zoho Books is one of the apps in the Zoho One suite. Zoho One brands itself as a “business operating system,” and a single subscription to Zoho One entitles you to access over 40 enterprise-level applications, including Zoho Books.
Pros
- Has the best-in-class mobile app
- Offers multiple plan tiers for users with different needs
- Has excellent inventory features
- Works well with other Zoho apps
Cons
- Limits the free plan to users with less than $50,000 in annual revenues
- Charges a fee for receipt autoscans
- Has no accounts payable (A/P) features in the Free and Standard plan
- Has a steep learning curve
- Fixed asset management: Of all the cloud-based accounting software we’ve reviewed, Xero is the only software with dedicated fixed asset management features. Its fixed asset manager enables users to keep fixed asset records, calculate depreciation, and compute any gain or loss from disposals.
- Unlimited users: Zoho Books only allows up to 15 users in the highest plan—and you’ll have to pay for additional users. We recommend going for Xero because it has unlimited seats in all plans.
- Integration with third-party apps: Xero has a robust library of third-party apps integrating with the accounting software, making it one of our best ecommerce accounting software. If you’re using apps like HubSpot, Mailchimp, or Shopify, you can connect them easily to Xero through the Xero App Store.
Pros
- Offers unlimited seats in all plans
- Has a dedicated fixed asset manager module
- Integrates with many third-party apps
Cons
- Limits the number of invoices in the lowest plan
- Lacks annual billing options
- Has a weak mobile app
- Assisted bookkeeping option with a United States ProAdvisors: QuickBooks Online has a lot of US-based ProAdvisors who are QuickBooks-certified and can help small businesses handle bookkeeping.
User Reviews: Tie
Zoho Books | Xero | |
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Average Rating on Third-party Sites | ||
Users Like |
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Users Dislike |
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Zoho Books and Xero are part of the top accounting software brands in the market today, so they are both well-reviewed on popular user review websites.
Zoho Books User Reviews
Zoho Books works best if you’re well-integrated in the Zoho ecosystem, especially if you’re using Zoho Mail, which can be used for SSO integration. The free plan is also one of its best features since it suits freelancers who don’t exceed $50,000 in annual revenues but need to track income and expenses.
We agree with users that Zoho Books has a steep learning curve but doesn’t require a lot of time to learn the software. However, we disagree with some reviewers who found Zoho Books’ inventory features limited. In our evaluation, the platform offers advanced features, such as serial number tracking and warehouse management.
Zoho Books earned the following average scores on popular review sites:
- GetApp[1]: 4.4 out of 5 based on about 600 reviews
- G2.com[2]: 4.5 out of 5 based on around 250 reviews
- TrustRadius[3]: 7.9 out of 10 based on about 130 reviews
Xero User Reviews
Xero’s fixed asset manager is its unique advantage over Zoho Books, and we agree with reviewers who find this feature useful. You can also create unlimited custom reports in Xero, unlike in Zoho Books where unlimited custom reports only come with the Elite plan, the second to the highest plan.
We disagree with some users who find Xero’s plans to be expensive. We believe Xero’s pricing is fair because it offers excellent accounting features for unlimited users and is less expensive than similar software, even Zoho Books.
Xero earned the following average scores on popular review sites:
- G2[4]: 4.3 out of 5 based on about 600 reviews
- GetApp[5]: 4.4 out of 5 based on around 2,800 reviews
- TrustRadius[6]: 8.5 out of 10 based on about 700 reviews
Pricing: Xero Wins
Zoho Books | Xero | |
|---|---|---|
Monthly Pricing | Free: $0 Standard: $20 Professional: $50 Premium: $70 Elite: $150 Ultimate: $275 | Early: $20 Growing: $47 Established: $80 |
Number of Users | 1 user plus 1 accountant (Free) 3 (Standard) 5 (Professional) 10 (Premium and Elite) 15 (Ultimate) Additional seats cost $3 each monthly | Unlimited in all plans |
Number of Monthly Bills | Unlimited | 5 (Early) Unlimited (Growing) Unlimited (Established) |
Number of Invoices | 1,000 per year (Free) 5,000 per year (Standard, Professional, Premium, Elite, and Ultimate) | 20 per month (Early) Unlimited (Growing) Unlimited (Established) |
Free Trial | 14 days | 30 days |
Xero wins in our pricing evaluation because of its low monthly pricing plans and unlimited seats for all plans. Its highest plan is only $78 per month whereas Zoho Books’ is at $275 per month, making Xero a more affordable option. Xero also poses no problem in scaling because it has unlimited seats and it can adapt to your growing accounting team.
Features: Zoho Books Wins
Zoho Books | Xero | |
|---|---|---|
Invoicing (A/R): Customize Invoice Design | ✓ | ✓ |
Invoicing (A/R): Choose Invoice Templates | ✓ | ✕ |
Project Accounting: Compare Actual to Estimated Labor & Inventory Costs | ✕ | ✓ |
Inventory Management: Shipment & Batch Tracking | ✓ | ✕ |
Inventory Management: Inventory Valuation Methods | First-in, first-out (FIFO) and last-in, last-out (LIFO) | FIFO Only |
Overall, Zoho Books wins in accounting features. However, we’d like to emphasize that while Zoho Books and Xero offer a few unique features, many of their features are similar. Our case study also found that there are only a few striking differences between the two programs. For instance, Zoho Books can compute FIFO and LIFO inventory costs while Xero only computes using FIFO. US businesses that use LIFO for tax and accounting purposes will benefit more from Zoho Books than Xero.
Another difference would be the comparison of actual to estimated project costs. Xero shows the actual amounts but Zoho Books didn’t show actual amounts in the report. We believe showing actual and estimated costs is important in the evaluation.
Invoicing (A/R): Tie
Zoho Books | Xero | |
|---|---|---|
Create & Send Invoices | ✓ | ✓ |
Customize 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 | ✓ | ✕ |
Zoho Books and Xero are even in terms of the functions we want to see in an A/R management system. Zoho Books offers more invoice customization features than Xero, but the overall invoicing module is the same, which is why we didn’t have enough reason to award Zoho Books the win.
The invoices in Zoho Books are outstanding. It gives users a lot of design options and templates to make unique invoices. We like how Zoho went to the nitty-gritty of invoice creation, such as the font, alignment, orientation, and margins. It feels like you’re making an invoice straight out of word processing software because of the level of control you can exert in the overall look of your invoice.
Xero, meanwhile, falls a bit short in invoice design—you can only edit the invoice line items. But as to the design, color, and font style, it lacks those features. You can create personalized invoices because you can replace the line items, but you can’t edit anything else for the invoice to be aligned with your branding.
Inventory Management: Zoho Books Wins
Zoho Books | Xero | |
|---|---|---|
Set Up an Inventory Item | ✓ | ✓ |
Inventory Costing | FIFO | FIFO and LIFO |
Add an Inventory to an Invoice | ✓ | ✓ |
View Stocks on Hand | ✓ | ✓ |
Track Total Units & Costs | ✓ | ✓ |
Decrease Inventory for Units Returned to Vendor | ✓ | ✓ |
Record Inventory Returned Back Into Inventory | ✓ | ✓ |
Inventory Management Availability | ✓ | ✕ |
Serial Number Tracking | ✓ | ✕ |
Shipment Tracking | ✓ | ✕ |
Batch Tracking | ✓ | ✕ |
Zoho Books wins in our inventory management evaluation because of its advanced serial number tracking, batch tracking, and shipment tracking. If you sell on Shopify, you can integrate up to two stores with Zoho Books for better coordination with inventory sales and stocks. You can also print shipping labels using Zoho Books based on shipping information in the order details.
Meanwhile, with Xero, you can integrate with over 20 inventory management software choices through the Xero App Store. For some, the wider selection of integrations might be preferable to being restricted to only one app, as with Zoho Books. Though we appreciate the integration options, these are additional costs for small businesses, as not all have the budget to add more software.
Project Accounting: Xero Wins
Zoho Books | Xero | |
|---|---|---|
Create an Estimate | ✓ | ✓ |
Add Labor to Estimates | ✓ | ✓ |
Add Inventory to Estimates | ✓ | ✓ |
Add Sales Taxes to Estimates | ✓ | ✓ |
Assign Actual Labor to Project | ✓ | ✓ |
Compare Estimated vs Actual Project Costs | ✕ | ✓ |
Tracking and managing projects on both platforms are a breeze, but Xero wins in project accounting, garnering a perfect score in our evaluation. The only feature we noticed that Zoho Books lacks is the actual-to-budget comparison of inventories used on the project. Although it’s not a major miss for Zoho Books, we believe that it could’ve been better to include this because it helps users assess how they create estimates, such as whether they’re overestimating or underestimating, and how they use resources.
Ease of Use: Zoho Books Wins
Zoho Books and Xero both have steep learning curves and easy-to-understand user interfaces. Users can easily predict where to go or what menu to select when navigating around the software. However, given that both of them have advanced accounting features, it will take ample time for users to master all features and users will familiarize these functions if used frequently.
What places Zoho Books in the lead is its customizable dashboard, assisted onboarding via phone, and a setup checklist that Xero lacks. Its dashboards are more comprehensive and show users the essential bits of information they need to gauge the overall financial performance of the business. Xero also has dashboards but not customizable and as comprehensive as Zoho Books. In Xero, you’ll see only surface information and you might need to generate reports to get more details.
Integrations: Tie
One of the biggest benefits of using Zoho Books is that it seamlessly integrates with other Zoho products, such as Zoho CRM and Zoho Inventory. On top of that, it integrates with payment gateways, such as PayPal, Stripe, and Authorize.Net.
Meanwhile, Xero also has an extensive marketplace, integrating with over 700 third-party software. Its many integrations include PayPal, Stripe, HubSpot, Mailchimp, BigCommerce, Shopify, Gusto, WorkflowMax, and simPRO.
Mobile App: Zoho Books Wins
Zoho Books | Xero | |
|---|---|---|
Send Invoices | ✓ | ✓ |
Enter Bills | ✓ | |
Capture Receipt | ✓ | ✓ |
Categorize Expenses in Bank Feed | ✓ | ✓ |
Record Time Worked | ✓ | ✓ |
View Reports | ✓ | ✕ |
Enter Bill Payments | ✓ | ✕ |
Receive Payments | ✓ | ✕ |
Assign Expenses to Customers & Projects | ✓ | ✕ |
Assign Time Worked to Customer & Project | ✓ | ✕ |
Zoho Books gets the win here as its mobile app allows you to do all basic accounting and documentation work. Meanwhile, Xero’s app covers only a few basic functions. It can’t be used as an alternative way to do accounting work, so you’ll still have to use the web version.
Assisted Bookkeeping: Xero Wins
Zoho Books | Xero | |
|---|---|---|
Assisted Bookkeeping Provider | Independent Zoho Books Advisors | Bookkeeper360 |
Monthly Pricing | Varies by provider | Starts at $399 |
Weekly Pricing | Varies by provider | Starts at $549 |
Access to Experts | ✓ | ✓ |
Communication | Varies by provider | Phone, email, or live chat |
Account Reconciliation | Varies by provider | ✓ |
Bookkeeping Advice | ✓ | ✓ |
Accrual-based Accounting | Varies by provider | ✓ |
Cash Management Insights | ✓ | ✓ |
User-friendly Dashboard | Varies by provider | ✓ |
In terms of convenience in finding a bookkeeper, Xero takes the lead. It certifies accountants and bookkeepers as Xero Advisors, and you can find advisors near you by going to the Xero Advisors page. Xero also uses third-party programs and services to provide assisted bookkeeping to its users. For instance, you can seek on-demand access to a professional bookkeeper through Bookkeeper360, which has transparent fees.
On the other hand, with Zoho Books, you’ll have to contact independent bookkeepers and inquire about their packages. Zoho Books doesn’t have a dedicated in-house team of bookkeepers, but you can seek assisted bookkeeping services in the form of certified, independent Zoho Books Advisors. You can check Zoho Books’ directory for the list of independent accountants, bookkeepers, and financial advisors who have earned the Zoho Books Advisor designation.
Customer Support: Zoho Books Wins
Zoho Books | Xero | |
|---|---|---|
Chatbot | ✓ | ✓ |
Email Support | ✓ | ✓ |
Self-help Resources | ✓ | ✓ |
Phone Support | ✓ | ✕ |
Live Chat Support | ✓ | ✕ |
When it comes to customer service, Zoho Books beats Xero, hands down. Unlike Xero, Zoho Books offers live customer support via telephone or chat in all of its paid packages; the free plan only includes email support. In addition, Zoho Books has the following resources:
- Zoho Help Database: A comprehensive help guide that includes basic navigation instructions, keyboard shortcuts, and step-by-step instructions in banking, contacts, invoices, client portal, expenses, and items.
- Zoho Video Tutorials/Webinar: In the help database, you’ll also find video tutorials and a webinar on using Zoho Books.
Meanwhile, if you need to contact the Xero support team, you’ll have to send an email and wait for a response. The good news is that they work 24/7, so the response will probably be less than 24 hours. Xero doesn’t have the option to speak to a live person as you can with Zoho Books. However, it has Xero Business Help Center and Xero University:
- Xero Help Center: A robust help center with video tutorials and step-by-step how-to articles on both basic and advanced Xero topics.
- Xero U (University): Xero University includes video tutorial courses that you can take to learn how to use Xero. The topics are broken down into three user types: accountants, bookkeepers, and small business owners.
How We Evaluated Zoho Books vs Xero
We evaluated Zoho Books and Xero based on ease of use, pricing, and how well each one performed against the ideal features we’re seeking, including invoicing, inventory management, and project accounting. Our evaluation used our internal case study, which evaluates accounting software across 13 areas, as follows:
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
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.
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)
Zoho Books has three main disadvantages: 1) restrictions on the number of users for each plan; 2) no payroll services—although it does integrate with Gusto; and 3) limited integration options other than its own suite of products, such as Zoho Inventory.
No, Xero doesn’t currently offer phone or live chat support.
Zoho Books offers a free plan for businesses with less than $50,000 in annual income, and a subscription allows you to manage up to 1,000 invoices per year and gain access to the customer portal and bank reconciliation features. Zoho Books also offers paid plans that range in price from $20 to $275 per month, depending on the number of users and required features.
Bottom Line
Zoho Books and Xero have their strengths and weaknesses, and the decision comes down to understanding your exact business needs. Choose Zoho Books if you want the best-in-class mobile app and advanced inventory features. On the contrary, pick Xero if you want unlimited users and to manage fixed assets through its fixed asset manager.
[1] GetApp | Zoho Books
[2] G2.com | Zoho Books
[3] TrustRadius | Zoho Books
[4] G2.com | Xero
[5] GetApp | Xero
[6] TrustRadius |Xero
