Accounting Software for Small Businesses
Xero vastly outperforms QuickBooks in its fixed asset management tools. 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. Xero also offers stronger tools for tracking project profitability, giving you access to real-time reports. Additionally, Xero is a better choice for international businesses needing multicurrency support. At Fundera, Randa specializes in reviewing small business products, software, and services. Not only do all four of the QuickBooks Online plans include capabilities for managing sales tax, but the classification of investments they each also offer tools to maximize tax deductions as well as manage 1099 payments.
- NerdWallet independently reviews accounting software products before determining our top picks.
- Both of these accounting applications have solid bank feed systems.
- QuickBooks goes beyond accounting with 750+ integrated apps, streamlining everything from payroll to customer relationships.
- With the Xero Expenses feature set, you can track, assign, and manage your business’s expense claims.
- Xero’s Early plan gives you 5 bills and 20 invoices, but it only offers unlimited invoices and bills starting in its second product tier.
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 Online and Xero are well-known cloud-based business accounting software solutions that are a favorite of growing companies due to their affordable pricing and scalability. These systems provide accounting features such as invoicing, accounts payable and receivable, and inventory management to help your business stay organized and profitable.
Popular features
Instead, the Xero vs. QuickBooks Online winner ultimately depends on your business—what features you need, what your budget looks like, and what capabilities are most important to you. In terms of report layouts in Xero, the layout on the monthly reports goes from left to right—most recent month to oldest. When accountants transfer monthly reports into a spreadsheet to analyze and project, they’ll need to reverse the order of the columns—which isn’t an easy task. In order to get a monthly profit and loss statement or balance sheet in QuickBooks Online, you can simply run the report for the date range. Then, in the options section in the top region, you can choose to show the columns by month.
While Xero is easier to set up, QuickBooks has a more intuitive and customizable dashboard and has time-saving features. For instance, QuickBooks Online allows you to add an inventory item from the invoicing screen, something you can’t do with Xero. QuickBooks Online outclasses Xero in cost of sales to revenue ratio this category as it offers more useful features that aid in setting up the software. Xero took a hit for its lack of assisted onboarding support and new company wizard, but it does offer the ability to import beginning balances—a feature that QuickBooks Online lacks. They’ll help you reconcile your bank and credit card statements and prepare monthly reports.
Automated features to save you time
Total cost per year is calculated by adding all the features that require additional fees. Discover seamless app integrations for efficient accounting with Xero’s comprehensive accounting software. Today’s leading accounting platforms offer standard security features like data encryption, secure credential tokenization and more. While human error will always 5 steps for process costing method play some role in security breaches, you can be confident in your accounting platform when it comes to keeping your information safe.
Can you use Xero to track inventory?
This cloud-based solution also supports cash-basis and accrual accounting methods and uses double-entry accounting. It has solid mobile apps, and it has a large number of integrations, although it falls a bit short of Xero. Both offer great accounting features and integrations, but which one is better for small businesses? While it’s not part of our case study, we evaluated Xero vs QuickBooks Online in terms of assisted bookkeeping.
With more than 3 million users worldwide, Xero is popular but not as ubiquitous as QuickBooks Online. Both Xero and QuickBooks Online have their own versions of transaction tracking tags, but QuickBooks Online is the winner in this arena. Xero lets users create two active tracking categories, while QuickBooks Online allows users to create 40 in the Simple Start, Essentials and Plus plans. QuickBooks Online’s Advanced plan allows for unlimited tag groups. The more categories you create, the more reports you can run to get a better idea of how your business functions and where there’s room to grow. All plans include 24/7 live chat support; phone support is available 5 a.m.
