Zoho Books vs Xero: Which Software Is Best in 2023?
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Danielle is a writer for the Finance division of Fit Small Business. She has owned a bookkeeping and payroll service that specializes in small business, for over twenty years.
This article is part of a larger series on Accounting Software.
Zoho Books and Xero are equally popular accounting software, but they have unique features, varied capabilities, and different price points. Ultimately, your budget and business situation will determine which one is right for you. If you’re a solopreneur or a freelancer wanting free invoice tracking, or an established small business needing advanced inventory reporting, go with Zoho Books. If you have a small business with many employees to pay, Xero is the more suitable choice.
Zoho Books vs Xero At-a-Glance Comparison
 |  | |
|---|---|---|
Overall FSB Score | 4.4 out of 5 | 3.95 out of 5 |
Monthly Pricing | Free: $0 Standard: $20 Professional: $50 Premium: $70 Elite: $150 Ultimate: $275 | Early: $13 Growing: $37 Established: $70 |
Number of Users Included | 15 (Ultimate) | Unlimited |
Manage Accounts Payable (A/P) | ✓ | ✓ |
Bank Reconciliation | ✓ | ✓ |
Online Invoicing | ✓ | ✓ |
Project & Expense Tracking | ✓ | ✓ |
Multicurrency Accounting | ✓ | ✓ |
Mobile App | Android and iOS | Android and iOS |
Inventory Management | ✓ | ✓ |
Receipt Capture | ✓ | ✓ |
Fixed Asset Management | N/A | ✓ |
Client Portal | ✓ | N/A |
Automated Workflows | ✓ | N/A |
Assisted Bookkeeping Services | Independent Advisors | |
Customer Support | Email, voice, and chat | Email |
When To Use
Fit Small Business Case Study
Using the case study framework we designed, we examined Zoho Books and Xero in 11 key areas that an accounting software service should possess. The chart below is the side-by-side comparison of Zoho Books and Xero in all 11 key areas.
Zoho Books vs Xero FSB Case Study
Touch the graph above to interact Click on the graphs above to interact
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Zoho books
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Xero
Later in this article, we’ll provide an in-depth comparison of accounts receivable (A/R), inventory, and project accounting. These three areas are where Zoho Books and Xero go head-to-head. For an in-depth article that tackles all key areas of our case study, read our Zoho Books review and Xero review.
Zoho Books vs Xero: Pricing
Zoho Books | Xero | |
|---|---|---|
Monthly Pricing | Free: $0 Standard: $20 Professional: $50 Premium: $70 Elite: $150 Ultimate: $275 | $13 (Early) $37 (Growing) $70 (Established) |
Number of Users | 1 user plus 1 accountant (Free) 3 (Standard) 5 (Professional) 10 (Premium and Elite) 15 (Ultimate) | 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 | ✓ | ✓ |
We find that Xero’s Growing plan at $37 per month is the most affordable plan suitable to most users, especially if you’d like the capacity for unlimited users. However, if you need project accounting, Zoho’s Professional plan at $50 monthly may be your best option.
Zoho Books Pricing
Zoho Books, which offers a free 14-day trial, has six tiers with monthly fees ranging from $0 to $275 per month. The free plan supports a single user and includes basic features, such as bank reconciliation, expense tracking, and recurring invoices. However, it has limits, such as 1,000 invoices per year and $50,000 annual revenue.
Meanwhile, the paid options give you access to advanced features, like sales orders and purchase order (PO) management, time tracking, and budgeting. Additional users can be added to any plan for $3 per user, per month.
Xero Pricing
Xero offers three packages with monthly prices ranging from $13 to $70. The Early plan is limited, allowing you to enter up to five bills and send 20 invoices. If you need to send unlimited invoices and enter unlimited bills, we recommend the Growing and Established plans.
Zoho Books vs Xero: Features
Zoho Books and Xero offer unique features but share a lot of similarities. Our case study found out that there are only a few striking differences between the two programs, yet they offer the features that ideal accounting software should have. Let’s go over the features of Zoho Books and Xero and emphasize certain key features from our case study.
Invoicing (A/R)
Zoho Books | Xero | |
|---|---|---|
Create & Send Invoices | ✓ | ✓ |
Customize Invoices | ✓ | ✓ |
Choose From Invoice Templates | ✓ | ✕ |
Upload Logo | ✓ | ✓ |
Change Invoice Colors | ✓ | ✕ |
Email & Print the Invoice | ✓ | ✓ |
Send Invoices From the Mobile App | ✓ | ✓ |
View Outstanding Invoices | ✓ | ✓ |
Create Recurring Invoices | ✓ | ✓ |
Zoho Books and Xero are even in terms of the functions we want to see in an A/R management system. You can create invoice items, accept short payments, view invoices, view balances per customer, and many more. However, the only feature with a striking difference is invoice creation.
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 edit anything else for the invoice to be aligned with your branding.
Inventory Management
Zoho Books | Xero | |
|---|---|---|
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 Back Into Inventory | ✓ | ✓ |
Inventory Management Availability | ✓ | ✓ |
The inventory management system of Zoho Books and Xero is also commendable in terms of the features we want to see, such as creating inventory items, managing inventory costs, and accounting for the cost of goods sold (COGS). As full-featured accounting software programs, it comes with no surprise that these features are present.
However, the only fine line we can highlight between Zoho Books and Xero is the expandability of inventory features—and here’s where Zoho Books comes at a bit of an advantage. Within the Zoho environment, it offers Zoho Inventory, a dedicated inventory management software that provides more inventory features than those found in Zoho Books. If you want to be detailed in tracking inventory, Zoho Books and Zoho Inventory are great partners within the Zoho suite, making Zoho convenient and easy to use.
For Xero, you can integrate with more than 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.
Project Accounting
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 Zoho Books and Xero are a breeze. They both have the project accounting features we expect to see, such as project creation, assignment of project costs, project estimations, allocation of inventory used, and project reporting. The only feature we noticed that Zoho Books missed 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 feature in the budget-to-actual reports. Meanwhile, Xero has all the features in project accounting, so it garnered a perfect score in our evaluation.
Zoho Books vs Xero: Ease of Use
Zoho Books | Xero | |
|---|---|---|
Accessibility | Cloud | Cloud |
Quick Links & Shortcuts | ✓ | ✓ |
Customizable Dashboard | ✓ | ✓ |
Customer Support | ✓ | Limited |
Overall Ease of Use | Average | Easy |
Zoho Books Ease of Use
Zoho Books is a comprehensive software with a lot of features and functions. That’s why we think that using Zoho Books can be challenging for first-time users or those without a background in using accounting software programs, such as freelancers and self-employed individuals.
At first use, Zoho Books will guide you through setting up, but there are still a lot of things to do post-set-up. You’ll have to go to Settings to input operating balances, rates, and other preferences. Other accounting software programs incorporate these things at the initial setup, so you won’t miss it. But in Zoho Books, you can do these things after setting up the basic information about your account.
Zoho Books Invoice Creation Window
Furthermore, we find that navigating through Zoho Books can be a challenge. However, you can master it through constant use. Expect to have difficulties if it’s your first time using Zoho Books. If you have experience with any other Zoho apps, Zoho Books will share a similar user interface design, so it’ll be easier.
Its layout can be overwhelming as well, just like in the screenshot of the invoice window above. Every now and then, you’ll encounter pop-up windows, which could make things even more overwhelming. Hence, we’ll give Zoho Books a difficulty level of above average.
Xero Ease of Use
Even though Xero houses a lot of features, we’re glad that it’s easy to use. Navigating around the tool is easy and predictable. Users can quickly think about what will appear when they click the menu bars. It also uses fewer pop-up windows than Zoho Books, making it easier to digest everything on the screen.
Xero Invoice Creation Window
For example, in Xero’s invoice creation window, you can find every piece of information in one place—there’s no need to scroll up and down to fill out and check information. Xero’s user experience is a lot better than Zoho Books. The interface design is well-thought-out, and there’s proper utilization of space.
Xero also did a great job in creating “sections” by utilizing box layouts and colored dividers. On Zoho Books, the windows are mostly white and gray, making it hard to distinguish between panes. Xero even uses its branding color to highlight important action buttons like “Send” or “Skip for now.”
Zoho Books vs Xero: Integrations
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 has a more extensive marketplace, integrating with over 700 third-party software. Its many integrations include PayPal, Stripe, HubSpot, Mailchimp, BigCommerce, Shopify, Gusto, WorkflowMax, and simPRO.
Zoho Books vs Xero: Mobile App Functionality
Zoho Books | Xero | |
|---|---|---|
Send Invoices | ✓ | ✓ |
Receive Payments | ✓ | ✕ |
Enter Bills | ✓ | ✓* |
Capture Receipt | ✓ | ✓ |
Assign Expenses to Customers & Projects | ✓ | ✕ |
Enter Bill Payments | ✓ | ✕ |
Categorize Expenses in Bank Feed | ✓ | ✓ |
Record Time Worked | ✓ | ✓ |
Assign Time Worked to Customer & Project | ✓ | ✕ |
View Reports | ✓ | ✕ |
*Recording bills through the Xero mobile app cannot record units for inventory purchases. It’s only suitable for operating expenses.
Zoho Books gets the win here as the 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.
Zoho Books vs Xero: Assisted Bookkeeping
Zoho Books | Xero | |
|---|---|---|
Assisted Bookkeeping Provider | Independent Zoho Books Advisors | Bookkeeper360 |
Monthly Pricing | Contact for quote | Starting at $399 |
Weekly Pricing | Contact for quote | Starting at $549 |
Access to Experts | ✓ | ✓ |
Communication | Varies by provider | Phone, email, or live chat |
Account Reconciliation | ✓ | ✓ |
Bookkeeping Advice | ✓ | ✓ |
Accrual-based Accounting | Varies by provider | ✓ |
Cash Management Insights | ✓ | ✓ |
User-friendly Dashboard | ✕ | ✓ |
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. Suppose you need help to manage your books or your business with Zoho Books. In that case, you can check Zoho Books’ directory for the list of independent accountants, bookkeepers, and financial advisors that have earned the Zoho Books Advisor designation.
Xero certifies accountants and bookkeepers as Xero Advisors. You can find advisors near you by going to the Xero Advisors page. It 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.
Zoho Books vs Xero: Customer Support
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. 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.
Zoho Books offers live telephone and chat support in all paid packages, while the free plan only includes email support. In addition, it also 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.
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.
Zoho Books vs Xero: User Reviews
Zoho Books users appreciate that the platform has several useful features, such as inventory management and project accounting. Reviewers also praised its ability to seamlessly integrate with other Zoho products like Zoho Inventory and Zoho CRM. The tool’s biggest drawback is its limits on the number of users and invoices for each plan.
It earned the following average scores on popular review sites:
- GetApp: 4.4 out of 5 based on about 510 reviews
- G2: 4.5 out of 5 based on around 130 reviews
- TrustRadius: 8.2 out of 10 based on about 120 reviews
Meanwhile, those who left Xero reviews said that the software is easy to set up and use, with a simple and clean user interface along with intuitive features. Users also praised the fixed assets manager and the project accounting capabilities. The software’s biggest drawbacks are its inability to reconcile transactions without bank feeds and its lack of live phone and chat support.
Xero earned the following average scores on popular review sites:
- G2: 4.4 out of 5 based on about 510 reviews
- GetApp: 4.4 out of 5 based on around 2,400 reviews
- TrustRadius: 8.7 out of 10 based on about 575 reviews
Frequently Asked Questions (FAQs)
What are the disadvantages of Zoho Books?
Zoho Books has three main disadvantages: it has 1) restrictions on the number of users for each plan; 2) no payroll services; and 3) limited integration options other than its own suite of products, such as Zoho Inventory.
Does Xero offer phone and live chat support?
No, Xero doesn’t currently offer phone or live chat support.
Is Zoho Books really free?
Zoho Books offers a free plan for businesses with less than $50,000 in annual income, and it also offers paid plans that range in price from $20 to $275 per month, depending on the number of users and required features.
How We Evaluated Accounting Software
We evaluated the small business accounting software based on ease of use, pricing, and how well it performed against the ideal features we’re seeking, including project accounting, inventory management, and mobile accounting. Our evaluation was based on a rubric scoring methodology in six categories, each with a designated appropriate percentage.
Our criteria for choosing the best small business accounting software are as follows:
5%
Pricing
36%
General features
10%
Inventory
10%
Project accounting
34%
Ease of use
5%
Mobile app
5% of Overall Score
We evaluated pricing based on how each plan compares with similar software packages as well as how many users are included in each plan and the extra costs incurred per additional user.
36% of Overall Score
The largest percentage comes from general features because the main reason small businesses need accounting software is to automate business processes like banking, A/P and A/R, sales taxes, and reporting.
10% of Overall Score
Many businesses are involved in the sales of products, so it’s essential that the best accounting software has a dedicated inventory management system.
10% of Overall Score
At the very least, a good accounting system should include features for tracking project-related costs for labor, materials, services, and inventory items.
34% of Overall Score
In addition to user interface (UI) and navigation, we also consider the available customer support options, including live chat and email and phone support. User reviews were also a component of ease of use.
5% of Overall Score
Mobile apps are evaluated based on their ability to perform certain tasks like invoicing, online payment processing, and expense receipt capture.
*Percentages of overall score
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 only need a few people to access your accounting data or you’re already a Zoho user. On the contrary, pick Xero if you have over 10 people in your accounting department or you have many employees to pay.
