As a small business owner, keeping track of finances can be challenging. Fortunately, accounting software can help you keep an accurate record of your financial transactions, create and send invoices, and even manage payroll. Xero and QuickBooks Online are two of the most popular accounting software options for small businesses, but which one is better for you? In this post, we'll compare Xero vs QuickBooks Online so you can make an informed decision.
Xero
Xero is a cloud-based accounting software that was founded in 2006 in New Zealand. It has gained a lot of popularity among small business owners due to its user-friendly interface, affordability, and accessibility.
Features
Xero offers a wide range of features that help small business owners manage their finances easily. Some of the most popular features include:
- Bank feeds: automatically import bank transactions so you can reconcile accounts easily
- Invoicing: create and send customized invoices to customers
- Payroll: pay employees and contractors accurately and on time
- Inventory management: manage inventory levels and stock orders easily
- Mobile app: access your account and manage finances while on the go
Pricing
Xero offers three pricing plans: Early, Growing, and Established. The Early plan costs $11 per month and allows you to send 20 invoices and quotes, reconcile 20 bank transactions, and have five bills. The Growing plan costs $32 per month and allows you to send unlimited invoices and quotes, reconcile unlimited bank transactions, and have unlimited bills. The Established plan costs $62 per month and includes all of the Growing features plus multi-currency support and project tracking.
QuickBooks Online
QuickBooks Online is a cloud-based accounting software that was developed by Intuit. It was launched in 2004 and has since become one of the most widely used accounting software options for small businesses.
Features
QuickBooks Online offers a wide range of features that make accounting easy for small businesses. Some of the most popular features include:
- Bank feeds: import your bank transactions and categorize them automatically
- Invoicing: create and send customized invoices to customers
- Payroll: pay employees and contractors accurately and on time
- Inventory management: manage inventory levels and stock orders easily
- Mobile app: access your account and manage finances while on the go
Pricing
QuickBooks Online offers four pricing plans: Simple Start, Essentials, Plus, and Advanced. The Simple Start plan costs $25 per month and allows you to send unlimited invoices and estimates, track sales and expenses, and manage sales tax. The Essentials plan costs $40 per month and includes all Simple Start features plus bill management, time tracking, and 1099 contractor management. The Plus plan costs $70 per month and includes all Essentials features plus inventory tracking and project profitability analysis. Lastly, the Advanced plan costs $150 per month and includes all Plus features plus customized roles and permissions and enhanced custom fields.
Xero vs QuickBooks Online: Which is Better for Small Businesses?
Both Xero and QuickBooks Online offer a range of features that make accounting easy for small businesses. However, there are some differences worth noting.
Pricing
If affordability is a primary concern, Xero may be the better choice, as its early plan is less expensive than QuickBooks Online's Simple Start plan. However, as your business grows and you need access to more features, QuickBooks Online's pricing may become more competitive.
User Interface
Xero is known for its user-friendly interface, which makes it easy for small business owners to navigate the software. However, some users prefer QuickBooks Online's more traditional interface, which they find easier to use.
Accounting Knowledge
While both Xero and QuickBooks Online are easy to use, Xero may be a better choice for users with limited accounting knowledge. Xero offers more tooltips and educational resources to help users navigate the software.
Customer Service
Both Xero and QuickBooks Online offer customer support, but Xero's support is limited to email and chat, while QuickBooks Online offers phone support.
Overall, the choice between Xero and QuickBooks Online depends on your business needs and preferences. If affordability, user interface, or accounting knowledge are primary concerns, Xero may be the better choice. If you need access to more features, such as inventory tracking, or prefer traditional software interfaces, QuickBooks Online may be the better choice.
Conclusion
Choosing the right accounting software for your small business is an important decision. Both Xero and QuickBooks Online offer a range of features that make accounting easy for small businesses, but they differ in their pricing, user interface, accounting knowledge, and customer service. We hope this comparison helps you make an informed decision about which accounting software to use.