QuickBooks vs. Xero: How the Accounting Software Platforms Stack Up

Introduction

When it comes to accounting and bookkeeping software for small businesses, two platforms stand out as leaders – QuickBooks from Intuit and Xero. Both QuickBooks and Xero provide robust tools to manage tasks like invoicing, expense tracking, reporting, and more.

But how exactly do QuickBooks and Xero compare when it comes to key capabilities, strengths and weaknesses, and value for money? By examining critical factors from ease of use to integrations, payroll features and pricing, we can get a sense of how the two options stack up.

Let’s dive into an in-depth feature-by-feature comparison of QuickBooks versus Xero to understand the distinguishing factors between the top accounting software contenders.

Ease of Use

For time-strapped small business owners, the learning curve of an accounting system matters. Both QuickBooks and Xero aim to provide intuitive interfaces.

QuickBooks offers a simple, template-driven approach to tasks like invoicing and expense reporting. It uses familiar accounting terminology beginners can grasp. Setup wizards guide users. However, the desktop version can require some initial orientation.

Xero prides itself on UX and has worked to simplify navigation and workflows. Its dashboard highlights critical info upfront. Xero claims new users can be up and running in about 20 minutes. Its interface feels intuitive.

For true ease of use, Xero may have a slight edge, especially with its mobile app. But both deliver on simplifying accounting for SMBs.

Features and Functionality

While ease of use is crucial, robust core accounting features are also vital. QuickBooks and Xero have spent years building out capabilities.

QuickBooks offers full-featured accounting, invoicing, inventory and expense management, along with more advanced features like custom reporting and automated workflows. It covers the core accounting basics through sophisticated controls.

Xero also provides complete accounting capabilities from invoicing to reporting, along with unique features like predictive billing using AI. It offers over 700 integrations as well. Xero’s features are rich and advanced.

For pure depth of accounting tools, QuickBooks likely still has an advantage. But Xero offers ample features for most small business needs.

Payroll Offerings

For SMBs with employees, payroll capabilities are essential. QuickBooks and Xero both provide payroll options.

QuickBooks Payroll is a full-service direct deposit payroll solution seamlessly integrated. There’s also QuickBooks Payroll for Accountants tailored to their needs. QuickBooks automates tax filings and payments.

Xero integrates with several major payroll providers like Gusto and Rippling for seamless data transfer. There are add-ons for running payroll directly in Xero as well. But there’s no proprietary payroll solution.

For built-in payroll, QuickBooks has a clear edge. But Xero offers payroll integration choices.

Mobile Apps

Today, accessing accounting tools on mobile is a must. QuickBooks and Xero both offer robust companion apps.

The QuickBooks mobile app allows for invoice creation, expense capture, customer engagement and more on the go. It provides the key accounting capabilities users need remotely.

Xero also offers full mobile access to accounting tools, together with unique features like offline mode when internet goes down. Navigation and visuals streamline the mobile experience.

For mobile accessibility and experience specifically, Xero likely provides greater polish and user-friendliness.

Third-Party Integrations

Support for connecting to other business platforms is key for unified data. QuickBooks and Xero both enable integrations.

QuickBooks Online Advanced allows syncing with hundreds of third-party apps via APIs and its open platform. Connections with POS systems, CRMs, payment processors and more are possible.

Xero provides over 700 pre-built integrations with platforms like HubSpot, Stripe, Gusto and more. Add-ons are available on its app marketplace too.

For sheer volume of seamless third-party integrations, Xero has the upper hand. QuickBooks still enables robust connections.

Reporting and Insights

Advanced reporting and business insights can help SMBs analyze performance. How do the tools compare?

QuickBooks Online Advanced includes custom, intelligent reporting on key metrics. The QuickBooks Cash Flow Planner provides projected insights based on AI and ML. More real-time data visibility is a focus.

Xero automatically provides over 100 common report templates. It also leverages AI to generate predictive business insights, cash flow forecasts, and benchmarking data against wider industry metrics. Insights are robust.

Xero likely outperforms QuickBooks on actionable insights and intelligent financial analysis features at present. But gap is closing.

Pricing and Plans

Pricing always factors into software buying decisions. QuickBooks and Xero offer multiple subscription plans.

QuickBooks Online starts at $25/month for Simple Start. QuickBooks Plus runs $55/month. Advanced is $80/month. QuickBooks Payroll is an extra charge. Tiered pricing provides choice.

Xero’s Starter plan is $27/month. Its Standard plan runs $60/month. Premium costs $100/month. Payroll add-ons are extra as well. Similar tiered approach.

The two are competitively priced at each tier. QuickBooks likely has the edge for startup and entry-level buyers, while Xero provides slightly more value for higher-end subscribers through advanced reporting. But overall pricing is aligned.

Ecosystem of Services

Software ecosystems adding value matter too. What other services are offered?

QuickBooks provides an ecosystem of integrated services like payments, capital, live bookkeeping, time tracking, bill pay, payroll and more surrounding its core software. This expands capabilities.

Xero also offers some access to live advisors and finance partners for lending. But it has fewer proprietary value-added services beyond core accounting currently. It focuses instead on third-party apps.

For broadening its accounting software into an end-to-end financial services platform, QuickBooks has a clear advantage currently based on ecosystem offerings.

Conclusion

QuickBooks and Xero each have distinct strengths. QuickBooks provides great ease of use, deep feature set, integrated payroll, and a wider ecosystem. Xero’s usability, mobile experience, reporting, and third-party integrations are advantages.

Pricing is broadly similar, and both overall provide outstanding accounting software for SMBs. QuickBooks likely better serves users wanting integrated services like payroll or payments. But Xero caters well to those desiring analytics-driven insights and non-proprietary integrations.

Given its comprehensive features and financial services ecosystem, QuickBooks Online likely still has the overall edge for most SMB accounting needs. But Xero offers a compelling lightweight alternative. The choice ultimately depends on each small business’ unique requirements.