QuickBooks vs Xero 2024: Which Software Is Better for You?

Core offers the basics, while Premium adds same-day direct deposit, role-based access, and auto time tracking. Elite also adds tax penalty protection, and a dedicated pro to help set up and troubleshoot. This requires the software to allow users the strategic audit committee transitioning from other bookkeeping software to import their chart of accounts (COA), vendors, customers, service items, and inventory items. Ideally, there will be a wizard to walk the user through the import process. 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. Both do a great job of accounting for inventory and calculating the cost of your inventory sold automatically.

1. If you need comprehensive bank reconciliation, class and location tracking, good customer support, and easy access to local bookkeepers, then QuickBooks Online wins.
2. With QuickBooks, you can record the purchase of a fixed asset, but with Xero, you can track fixed assets, calculate and track their depreciation, and much more.
3. Xero has a more impressive contact management feature with smart lists for targeting specific customers.
4. This doesn’t mean QuickBooks Online is the right choice for all businesses, though.
5. Live bookkeeping services for additional help with your books start at $50/month.
6. Desktop Pro Plus and Desktop Premiere Plus go for $549 and $799 per year, respectively.

Best Small Business Accounting Software

Xero is ideal for businesses that keep a team of bookkeepers or accountants in-house. QuickBooks Online offers integration with hundreds of apps, making it great for small business owners. These integrations including PayPal, TSheets, Bill Pay for QuickBooks Online, and Stripe, with apps available for inventory, payroll, CRM, and time tracking. The Accounting category in Xero is where you’ll handle all of your banking transactions, as well as manage your chart of accounts and financial statements.

The Established plan also supports a multi-currency function, which converts 160 different foreign currencies into your business’s local currency. Yes, you can use Xero to track inventory, and the feature is available in all plans. Ease of use includes the layout of the dashboard and whether new transactions can be initiated from the dashboard rather than having to navigate to a particular module. Other factors considered are user reviews specific to ease of use and a subjective evaluation by our experts of both the UI and general ease of use. In evaluating pricing, we considered the billing cycle (monthly or annual) and the number of users.

FreshBooks is one such option that has gained popularity in recent years. It’s designed specifically for small businesses and offers invoicing, time tracking and expense management. QuickBooks Online also gives you the option to have customer payments applied automatically once they’re deposited, or leave that option to the user. If you can’t justify the $99-per-month QuickBooks Online Plus plan, you won’t get inventory management, because QuickBooks Online’s lower-tier plans don’t come with it. This could be a real shortcoming for small online retail businesses, for instance, that need to keep track of their products and the materials used to make them. All of Xero’s plans come with inventory management so business owners can track what’s in stock and which products are selling.

Can support larger small businesses with dozens of employees; all three plans include an unlimited number of users. Both accounting softwares are easy to navigate, allowing you to find your required feature from a main dashboard with a sidebar. QuickBooks’ sidebar is vertical and on the left, while Xero’s is horizontal across the top, both deliver about the same user experience, and user satisfaction is high for both. 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. Businesses with inventory items should choose accounting software that can track inventory costs, manage COGS, and monitor inventory units.

Banking: QuickBooks Online Wins

This is because QuickBooks offers an add-on specifically for time tracking, starting at $20 per month (plus $8 per user), while Xero bundles time tracking with its main service. 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.

Wave Accounting

Customer service is evaluated based on the number of communication channels available, such as phone, live chat, and email. Software providers also receive points based on other resources available, such as self-help articles and user communities. Finally, they are awarded points based on the ease with which users will find assistance from independent bookkeepers with expertise in the platform. However, we want to emphasize that Xero offers fixed asset accounting in all its plans, making it an how to calculate federal tax deductions from payroll affordable QuickBooks alternative for fixed asset management. Explore cloud and desktop-based accounting software with subscription and perpetual licensing options like AccountingSuite, Xero, TallyPrime, and Striven.

Customer support

You can skillwise review enter as much or as little information as you need, and simply add the rest when it’s necessary. An important though often overlooked component of any software product is how easy it is to use. You may never need to call support, but it’s nice to know it’s an option. User preference can play a role in which style you prefer, but generally, the more self-explanatory a central navigation screen is, the easier it is for new users to find their way around. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. Plus, Xero staffers can call people back to discuss their cases over the phone, giving you that phone support you need, albeit in a roundabout way.