Compare Xero Vs. QuickBooks 6 Jun 2024

Xero vs. QuickBooks

The two most often used accounting software programs for small businesses trying to manage their money are Xero and QuickBooks. There are some distinctions between the two, even if they both provide capabilities like integrated payroll, tax management, financial reports, inventory, and file storage. To assist you in selecting the best software for your company, Forbes Advisor evaluated the main features, costs, customer support, and reviews of Xero vs. QuickBooks.

Compare Xero and QuickBooks quickly

QuickBooks is ideal for businesses that use accountants or bookkeepers to handle their bookkeeping and accounting tasks. It can be accessed via a desktop version as well as the internet. This is because QuickBooks’ top-tiered plan can only accommodate up to 40 users—and even then, certain plans require each user to pay for their account. In the meantime, Xero supports an endless number of users. Xero is ideal for businesses that have an in-house team of bookkeepers or accountants.

Except for QuickBooks Desktop, Xero and QuickBooks have comparable prices. There is no desktop version of Xero. QuickBooks’ Desktop plan has an annual starting price of $349.99, increases to $804 for the first year, and then renews at $1,340.

Gather and arrange receipts for both businesses. This is provided by Xero via Hubdoc, allowing you to view your documents online. Both the web and mobile versions of QuickBooks Bookkeeping include receipt and document management.

Xero and QuickBooks both allow you to send invoices, track miles, and see a snapshot of your company’s cash flow. You can send and approve up to 20 invoices with Xero’s most basic subscription, but partner apps that start transactions will automatically add to your allotment. Billing constraints are non-existent for its higher-tier services.

The maximum number of users that each company permits is another significant distinction between them. The number of people who can access data in Xero is unlimited, while QuickBooks’s Enterprise package restricts access to 40. Users must purchase their plan to use its lower-tiered options.

For instance, you can have up to three concurrent users when you purchase the Pro Plus Desktop plan, but each user needs to pay for their account, which costs $349.99 a year. When using the online version, you can have up to 25 users at no extra cost, as long as you have the Advanced plan.

How Products Stack Up

  • Prices for Xero start at $15 per month, with a 60% discount for the first four months during the current campaign.
  • QuickBooks costs $30 per month (50 percent savings for the first three months with the current deal).
  • Payroll Integration: Xero: $40 per month. QuickBooks costs from $45 to $125 per month.

Alternative Options for Accounting Software

If you’re looking to purchase accounting software, the variety of options available to you may be overwhelming. Though extremely well-liked, Xero and QuickBooks aren’t the only choices. Other accounting software options are available that can provide strong functionality and an easy-to-use interface.

One such solution that has grown in popularity recently is FreshBooks. It lets you log time, manage expenses, and create invoices—all tailored especially for small enterprises.

Wave is a free accounting software that also tracks sales tax and offers payroll, double-entry, invoicing, and other features. There is undoubtedly an accounting software application out there that is the ideal fit for your requirements.

Take a look at our ranking of the top accounting programs.

Xero vs. QuickBooks Features


  • Key Feature: Xero has powerful reporting capabilities and report customization possibilities, rudimentary inventory monitoring in all plans, and a good mobile app; the early plan restricts the number of invoices and bills.
  • Ease of use: The software includes features to automate the reconciliation process, as well as a global search capability and a customized dashboard; the interface is straightforward.
  • Scalability: It can accommodate bigger, smaller organizations with dozens of employees; all three tiers allow an unlimited number of users.
  • Easy sharing with accountants: includes audit trails and easy accountant access; although the product is gaining popularity in the U.S., it’s less popular than some competitors like QuickBooks.
  • Integrations: It works with over 1,000 different applications.
  • Customer support: Customers do not receive a phone number, but a professional will call them if required; there is no live chat help.


  • The early plan is $15 per month.
  • The monthly cost of the established plan is $78.
  • The Growing Plan costs $42 each month.

Advanced features: Includes project tracking tools in the most expensive plan; limited transaction tracking tags; lacks industry-specific reports; users with multiple businesses must pay for separate subscriptions.

QuickBooks Online

  • Key Features: It includes sophisticated reporting capabilities and report customization possibilities, billing for an infinite number of clients, inventory monitoring in higher-tier services, and a powerful mobile app.
  • Ease of use: Includes tools to assist in simplifying the reconciliation process, as well as a global search capability and a configurable dashboard; nevertheless, there is a learning curve involved.
  • Scalability: Can accommodate bigger, smaller organizations with dozens of employees; the top-tier subscription covers 25 users.
  • Easy sharing with accountants: Includes audit trails and quick accountant access; with millions of users, your accountant is sure to be familiar with it.
  • Integrations: Integrates with over 750 applications and provides a real, in-house bookkeeping add-on.
  • Customer support: All plans include live chat support 24 hours a day, seven days a week from 5 a.m. to 6 p.m. PST, and 7 a.m. to 4 p.m. PST on weekends.


  • The Simple Start package is $30 per month.
  • The Essentials plan costs $60 per month.
  • The monthly cost of the Plus plan is $90, while the monthly cost of the Advanced plan is $200.

Advanced features: The most costly plan includes project monitoring capabilities; the transaction tracking tags are restricted; there are no industry-specific reports; customers with several enterprises must pay for separate memberships.

Why QuickBooks Online is successful

Improved feature set.

There is no invoicing limit.

All QuickBooks Online plans offer an unlimited number of invoices. The Xero Early plan, which is ideal for self-employed persons or starting enterprises, allows for 20 invoices per year. If you just send out one or two invoices each month, the Early Plan is a reasonable alternative at $15 per month. Otherwise, you will need to upgrade your membership or investigate QuickBooks Online options.

Claiming costs.

QuickBooks Online allows customers to claim expenditures and match them to images of receipts in all plans; however, Xero needs Xero expenditures, which is only available in the top-tier established plan. If taking photographs of receipts to claim costs on the go is a vital mobile function you’d like to have, regardless of plan level, QuickBooks Online might be.

Transaction tracking tags.

Both Xero and QuickBooks Online offer their own versions of transaction tracking tags; however, QuickBooks Online wins this category. Customers can create two active tracking categories in Xero, whereas QuickBooks Online allows for 40 on the Simple Start, Essentials, and editions. QuickBooks Online’s Advanced package supports unlimited tag groups. The more categories you establish, the more reports you can run to have a better understanding of how your organization operates and where there is a possibility for expansion.

Accountant familiarity.

Both accounting software programs allow customers to invite their accountants by email. The complete operation should take no longer than a few minutes. If you live in the United States, your accountant is likely to be more familiar with QuickBooks Online than with Xero bookkeeping. QuickBooks Online is the industry standard, with over 5 million users globally. If you consider QuickBooks Desktop users, the figure jumps to 8 million. With over 3 million users globally, Xero is popular but not as widely used as QuickBooks Online.

Customer Support.

QuickBooks Online is ideal for business owners who prefer to deal with hiccups over the phone. The firm provides phone help Monday through Friday from 5 a.m. to 6 p.m. PT, as well as starting at 7 a.m. on weekends to 4 p.m. PT. Subscribers to the advanced package receive 24-hour customer assistance. Xero does not offer clients phone numbers but will call you if you provide your contact information.

When you might want to use Xero instead

Unlimited users at a minimal cost.

If you need to offer accounting access to more than five people, Xero may be the best alternative for you. QuickBooks Online’s most popular Plus plan is limited to five users; the highest-tier Advanced plan allows for up to 25 users, but it is pricey at $200 a month. In comparison, all Xero subscriptions provide unlimited users, and the highest-tier Established plans are cheaper at $78 per month.

Easy to use.

Xero is noted for its clean, elegant interface, which may make it more appealing to business owners who are new to accounting or lack the underlying knowledge required to fully utilize QuickBooks Online’s features. QuickBooks Online allows you to accomplish a lot, but the number of options might be overwhelming at first.

Basic inventory tracking is included in all plans.

If you can’t afford the $90-per-month QuickBooks Online Plus plan, you won’t be able to use inventory management because lower-tier QuickBooks Online plans do not include it. This might be a significant disadvantage for tiny online retail enterprises, for example, which must maintain track of their items and the resources required to manufacture them. All of Xero’s plans include inventory management, allowing business owners to track what is in stock and which goods are selling.

Just keep in mind that Xero does not let users set up reorder points that alert them when stock runs short, in contrast to the inventory function included in QuickBooks Online’s higher-tier subscriptions.

Alternatives for Xero and QuickBooks Online

Wave Accounting:

The starter plan costs $0.
The Pro plan costs $16 per month.

Wave Accounting is a free accounting solution for small service-based businesses, contractors, freelancers, and consultants. The Wave could be a suitable choice if you can’t afford to pay for Xero or QuickBooks Online, or if they offer too many features that your business doesn’t need. It offers similar invoicing capabilities but no audit trail and no integration with third-party programs.

Zoho Book Pricing:

  • The free plan costs $0 per month.
  • The standard plan is $20 per month.
  • The professional package costs $50 per month.
  • The premium plan costs $70 per month.
  • The Elite package costs $150 per month.
  • The Ultimate Package is $275 per month.

Zoho Books offers a free plan as well as premium subscriptions, beginning at $20 per month, to accommodate most budgets. Higher-tier plans offer unique features such as workflow rules as well as tools for measuring project profitability. All paying users have access to phone and live chat assistance around the clock; however, third-party connections are limited when compared to QuickBooks Online and Xero.

FreshBooks Pricing:

  • The Lite plan costs $19 per month.
  • The Plus plan costs $33 per month.
  • The premium plan is $60 per month.
  • The Select package comes with custom pricing.

FreshBooks may be a fantastic choice for freelancers and contractors searching for economical, straightforward accounting software. All plans include time monitoring, and phone assistance is accessible from 8 a.m. to 7 p.m. ET, Monday through Friday. The first two plan tiers set a restriction on chargeable clients but not invoices.

The bottom line:

For small businesses, Xero and QuickBooks are both excellent choices for accounting software. Both of them provide a large feature set, an intuitive user interface, and affordable prices. Xero, on the other hand, is a better fit for companies that require online accounting software and limitless users, while QuickBooks is best suited for those who need desktop accounting software and contract out their accounting work to a bookkeeper or accountant.




About the Author:

Pramod has over 11 years of experience relating to finance and accounts in diversified industries. He is an expert in resource and process optimisation resulting in greater operational efficiencies. He can be reached at


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