Xero v Quick Books - Key differences

 

Xero vs QuickBooks: Key Differences & What’s Best in 2022

Both Xero and QuickBooks Online offer comprehensive accounting features that help you manage complex business processes, such as billing (purchases), invoicing (sales), financial reporting, income tax and VAT management.

While Xero and QuickBooks Online both have similar features, they do have significant differences and are built for specific business uses.

Xero allows unlimited users in all its plans while QuickBooks maxes out at five users in its Plus plan, which has a cost most comparable to Xero.

Xero is more suitable for businesses with fixed assets while QuickBooks Online is preferred for those needing easily available support.

When to Use Xero  

Commonly preferred by small businesses that need multiple user access. If you have a team of in-house accountants working on your books or working with a company partner, you can add all of them to Xero.

Very neat and simple user interface that’s attractive to many accounting novices and ideal for growing start-ups, as it scales in terms of depth of functionality.

Xero is better for:

Small businesses that find QuickBooks expensive switch to Xero because it offers many of the advanced features found in QuickBooks Online Plus, but at a lower price.

What makes Xero unique is that it has a fixed asset manager that calculates and tracks depreciation on your machinery and equipment so that you can claim the proper gain or loss when you dispose of the asset.   

Businesses with multiple users: QuickBooks Plus, their most popular plan, only allows five users while Xero supports unlimited users in all its plans.

 When to Use QuickBooks Online

 QuickBooks Online has an impeccable reputation when it comes to small business accounting. In addition to basic accounting features, like invoicing and income and expense tracking, QuickBooks Online also offers mileage tracking, project accounting, inventory management, and income and expense tracking by class or location.

QuickBooks Online is better for:

QuickBooks Online is so widely used among small business owners and accountants that you’ll have no problem finding a local bookkeeper to help you use QuickBooks.

QuickBooks offers live customer service via both telephone and live chat while Xero doesn’t offer any live help. With Xero, you must email customer support or use their online resources to solve the problem yourself.

Xero can be linked to your bank account to import your transaction but requires a bank statement to be checked and to perform a bank reconciliation. Adding transactions manually changes the Bank Balance in Xero

QuickBooks is more robust can import your bank transactions in the same way as Xero but the Bank balance never changes despite what is put in manually or in error.

Both Xero and Quick Books can have ‘blips’ in their bank feed so it’s always worth doing a manual check against bank statements at Year End as your accountant will want to see this.

When To Use an Alternative

Xero and QuickBooks are both powerful tools, but they aren’t completely flawless. Aside from the fact that both are paid programs, there are still a few reasons why you’ll need to look elsewhere.