Which accounting software is best? Xero vs Quickbooks Online
Accounting is never anyone’s favourite part of running a business. Luckily for business owners, the quality of online tools now available has meant that managing your accounting is far less painful than it used to be.
Accounting is never anyone’s favourite part of running a business.
Luckily for business owners, the quality of online tools now available has meant that managing your accounting is far less painful than it used to be.
When it comes to online accounting software, there are two clear leaders in this domain; Xero and Quickbooks Online.
Whilst both offer similar services, understanding the differences between the two platforms will help you make an informed decision on which is best for your business.
Making the right choice on your accounting software can save immeasurable time and headaches in the long run, so let us take some of the stress away.
What do Xero and Quickbooks Online have in common?
Before we look at what sets them apart, let’s go through the overlaps.
First of all, Xero and Quickbooks Online are both cloud accounting software which means that you can manage your account at anytime and from any device (as long as you have an internet connection).
This web-based form of accounting has made it easier than ever for business owners to collaborate with their accountants because data is updated in real time and can be accessed around the clock.
Both platforms also run on a monthly subscription basis with increasing software capabilities available as the plans get more expensive. This means that you’re able to scale up your accounting power to meet the growing size and needs of your business.
Additionally, Xero and Quickbooks Online both offer a wide range of integrated third-party options that can add to the tools at your disposal.
These tools do require additional fees but can be incredibly useful at filling the specific needs of your business.
And, for those always on the go, both platforms offer free mobile apps that allow you to manage your accounts from wherever you are.
Xero Accounting Software
Xero pricing and plans: ⁃Starter -$27/month ⁃Standard -$54/month ⁃Premium -$70-$163/month (depending on size of payroll)
One of the biggest reasons behind Xero’s popularity is their remarkably easy-to-use interface that simplifies accounting better than any of its competitors.
Xero have focused on creating a sleek and stress-free experience for users by not over-complicating the design or functionality of their platform. This is a huge tick when it comes to efficiency and empowers businesses to stay in control of managing their own accounting.
Xero have done a really good job with the training tools and resources that are available to its users. This, combined with Xero’s minimalist design, means that there is very low learning curve for new users and for the less tech-savvy.
Xero provides you to the option to add unlimited users to any plan which allows your accountant, tax adviser, bookkeeper, yourself and any of your staff to access your account without any additional cost.
Quickbooks Online requires you to upgrade your plan to accommodate the number of users, with a max limit of 25 on their Advanced plan.
Xero has over 1000 integration options available, with its users able to utilise a wide range of third-party tools that bolster the processes you have at your disposal.
Although Quickbooks Online offer their own range of integration options, Xero are the clear market leaders in this space.
Xero’s simple layout speeds up the process for accountants when managing your account, meaning that you are charged less for the time spent on the job.
Alongside the range of resources and learning tools available, Xero offer excellent customer service to their users - regardless of which plan they use.
Xero haven’t outsourced their customer service team meaning free 24/7 support is available from employees who all work within the company.
Number of plans
Compared to Quickbooks Online, Xero are less flexible when it comes to their plan options.
Xero’s Starter plan is extremely limiting with the number of invoices, quotes and bills that a user can utilise, meaning that most growing businesses will need to upgrade to a more expensive plan.
Quickbooks Online offer four plan options that are better suited to scale with a business as it grows in size.
Due to Xero’s focus on simplicity, they do offer slightly less processes when it comes to tax support.
Xero does include sales tax software on all their plans, but for larger businesses seeking a more comprehensive toolset; Quickbooks Online does has more tools available for users on their plans.
There are plenty of integration options on Xero available to bolster tax capabilities, however they may incur additional costs.
Xero only has time tracking available on their premium plan, whilst Quickbooks Online includes time tracking functions at each of their levels.
Quickbooks Online offers plans that are well suited to scale upwards as a business grows in size. Each upgrade in the plan increases the level of functionality on your account, allowing you to expand your capabilities as your demands increase.
Comprehensive tax tools
Quickbooks Online boasts a comprehensive range of tax tools that have all the capabilities that Xero does, plus functions that include the ability to maximise tax reductions and manage 1099 payments.
These tools are especially useful when it comes to creating your own tax categories that can be auto added to your expenses, helping in preparation for tax time.
Quickbooks Online offers time tracking capabilities on each of their plans, where Xero only offers it on their advanced level.
Higher learning curve
Quickbooks Online doesn’t have the same training tools or ease-of-use that Xero offers, meaning that users will need more time to learn and adapt to using the software.
This makes the platform slightly less accessible and means that collaboration between users is less efficient than its competitor.
Quickbooks Online requires you to upgrade your plan in order to accommodate the growing number of users who need access to the account.
The user limit maxes out at 25 people on its most advanced level, whilst Xero offers access to an unlimited number of users for no additional cost on each of its plans.
Customer service Quickbooks Online doesn’t offer around the clock support like its competitor, with its phone centre open from 8:30am - 6:30pm on weekdays.
Which accounting software do we use?
At Elephant Advisory, the software we use and recommend is Xero simply because of how efficient it is to use and how easily it allows us to collaborate with our clients.
It doesn’t take long to get used to Xero’s functionalities and interface which is a big advantage for small businesses who already have enough on their plate.
Xero does a really good job at breaking down all the mumbo jumbo in accounting, as well as providing excellent training tools, resources and support for its users.
Because of Xero’s sheer accessibility, we find advising clients and walking them through their accounts, tax and other needs to be a straightforward process.
If you need further advice, we recommend consulting your accountant on whether Xero or Quickbooks Online is right for you.
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Elephant Advisory is an accounting and mortgage broking firm based in Melbourne, with a successful history of helping our clients achieve their goals. With a little help from us, you'll be prepared to make the right decisions for your business or property journey, avoiding many of the potential mistakes along the way.