Xero offers unlimited user access across all plans, making it ideal for businesses with large teams or external advisors who need simultaneous access to accounting data. Its user interface is still solid, and it offers several online tutorials, but beginners may encounter complexities with advanced reporting or inventory management. QuickBooks provides more comprehensive inventory tracking capabilities, especially in higher-tier plans, with features that include lot tracking, serial number management, and advanced cost analysis. I’ve found that businesses often underestimate the value of reliable support for accounting tools, until they face critical issues during month-end closing or tax season.
At this point, the choice often comes down to your business model. With Xero, pricing stays more predictable if your team size grows, but you may need extra add-ons for certain features. Xero doesn’t offer its own payroll, so you’ll likely end up paying for Gusto or a similar third-party service. By comparison, Xero’s unlimited user access keeps pricing more stable even as teams expand. That’s where QuickBooks starts forcing upgrades, since every plan has strict user limits. That’s where differences between Xero pricing plans and QuickBooks start to show up.
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Granted, this doesn’t necessarily mean QuickBooks is the most cost-effective option for your business needs. Similarly to QuickBooks, Xero boasts a structured navigation that positions it well for professionals who are already experienced with accounting processes. Therefore, if you only need an accounting platform to handle simple tasks, we’d recommend going with a more beginner-friendly like FreshBooks, instead. Our team did note a steep learning curve, however, particularly when it came to setting up tax and expense processes. However, after trialing out both pieces of software, we preferred QuickBooks, due to its comparatively modern interface, beginner-friendly set-up process, and intuitive layout.
In accounting packages for small businesses, Xero’s unlimited user access across all plans is a huge advantage. Xero offers basic inventory tracking but requires a separate paid add-on (Inventory Plus) for features like reorder points and advanced stock controls. Xero offers basic expense tracking at all plan levels but reserves its full receipt capture and expense management features for higher-tier plans or requires the use of paid add-ons. It started as desktop software and over time became one of the most widely used tools for small business accounting, especially in the US. Xero offers basic inventory management for retail businesses to track what they have in stock, add inventory to quotes and invoices, and report on what product lines are trending. Xero is incredibly user-friendly, simple and powerful, and is designed to help their customers do better in their own businesses via their accounting tools.
- QuickBooks limits users sharply at every tier, forcing some businesses to upgrade sooner than they’d like just to give more people access.
- Xero doesn’t offer its own payroll, so you’ll likely end up paying for Gusto or a similar third-party service.
- QuickBooks allows users to tag things while working to track projects, locations, events, and more.
- These are all features that become essential as businesses scale beyond their domestic markets.
- By comparison, Xero’s unlimited user access keeps pricing more stable even as teams expand.
Feature comparison of Xero vs. QuickBooks Online
If you want simple pricing, unlimited users, and easier day-to-day use, Xero’s better. Both offer the tools you need to run clean financials, track performance, and stay compliant. Retail and ecommerce companies often lean toward QuickBooks for its stronger native inventory management. Both tools cover core accounting needs, but depending on how your team works and what industry you’re in, one may fit a little more naturally than the other. Xero’s advanced inventory needs a paid add-on if you want things like automated stock level alerts.
AI automation: Xero
For small businesses managing simpler processes, we recommend our best-rated accounting software – Zoho Books – instead, due to its intuitive design and smaller price tag. For growing businesses that collaborate on accounting tasks or require strong documentation features, Xero delivers powerful tools at a competitive price. Pricing is one of the most critical factors for small and medium-sized businesses (SMBs) choosing accounting software. Both Xero and QuickBooks are cloud-based accounting software solutions trusted by small and medium-sized businesses (SMBs) globally. Both Xero and QuickBooks offer essential accounting tools like invoicing, reporting, bank reconciliation, and tax management—but differ in UX, automation, and integration depth. Service-based businesses like legal, consulting, or construction may care less about inventory and more about reporting or invoicing; both platforms handle those well.
Xero is the smart choice for businesses that require collaborative accounting tools without breaking the bank. Xero offers more affordable plans with unlimited users, making it ideal for growing teams, while QuickBooks limits users and has higher-tier pricing. does depreciation belong in a cash budget When it comes to managing small business finances, Xero and QuickBooks consistently top the list of the best accounting software solutions. If you need advanced features like payroll and inventory, QuickBooks wins.
Xero vs QuickBooks: Pricing Plans
QBO has the advantage of more time on the market to evolve to their customers’ precise needs and user flows. QuickBooks Online is rated 4.2 out of 5 on Capterra by 3520 users, while Xero has an average of 4.3 from 1880 users. Xero was founded in 2006 in New Zealand and has since consolidated its reputation as one of the top accounting tools on the market. Both platforms offer tools and guides, and numerous third-party services specialize in migrating data between QuickBooks and Xero.
Integrations & connected tools
- All things considered, our research found that Xero’s and QuickBook’s invoicing features are neck-and-neck, and are actually some of the best we’ve researched – alongside those offered by Zoho Books.
- Advanced reporting, job costing, automation in higher plans
- So, which platform is the right fit for your specific business needs and budget in 2025?
- Xero was founded in 2006 in New Zealand and has since consolidated its reputation as one of the top accounting tools on the market.
Its integrations and reporting facilitate compliance in dozens of countries, making it the clear choice for businesses with cross-border clients, suppliers, or offices. QuickBooks is specifically designed for US-based businesses, offering alignment with Generally Accepted Accounting Principles and direct integration with US tax-filing systems. From an analytical perspective, QuickBooks provides deeper insights through its advanced analytics features, which include trend analysis, forecasting tools, and performance benchmarking capabilities. This is very useful for businesses with unique operational models or detailed reporting obligations.
When More People Need Access to the Numbers
So, to guide you through the process, this article offers a granular comparison of their pricing plans, usability, stand-out features, and support options. For businesses needing in-house payroll management, QuickBooks is often the better choice. Xero integrates well with platforms like Peppol and Invoici (especially relevant in Malaysia), while QuickBooks offers built-in tools to manage VAT, GST, and sales tax depending on your country. There’s no one-size-fits-all solution—your best accounting software depends on how your business works. For businesses with fewer users and a preference for an all-in-one platform that works well on the go, QuickBooks provides the edge in convenience and mobile usability. While it comes at a higher cost and user limits per plan, it shines in areas like built-in payroll and advanced mobile tracking.
Will I need to buy extra add-ons?
It is popular among accounting firms and businesses with less than 25 users, requiring advanced invoicing customization and industry-specific features. When we tested out the platform, we found it easier to use than Xero and QuickBooks, and its 24/7 help center rivals QuickBooks, making it a reliable option for businesses using accounting software for the first time. After pitting how to calculate dividend payout the two providers head-to-head, we found that Xero’s collaboration features are stronger, namely because the software supports unlimited users on all pricing plans. Both are widely trusted by small and medium-sized businesses (SMBs) for tasks like tracking income and expenses, managing payroll, filing taxes, generating reports, and overseeing inventory. Choosing the best invoicing and accounting software for small businesses is about what features exist and also about how easy the system is to use day after day.
For international accounting needs, Xero’s approach to multicurrency transactions is more intuitive than QuickBooks’ implementation. The platform automatically handles exchange rate fluctuations and provides clear reporting in your base currency. Unlike QuickBooks, which restricts user numbers based on subscription tiers, Xero allows you to add accountants, bookkeepers, managers, and staff members without additional fees. Project tracking and analytics in higher tiers 24/7 live chat and scheduled phone support This helps support our work, but does not affect what we cover or how, and it does not affect the price you pay.
If you need to track income, expenses, invoices, and time, you’ll likely be paying $35/month for QBO or $60/month for Xero. For companies that need more than the standard Xero and QBO reporting can offer, they can make use of add-ons and integrations with both apps. This can mean some small cost savings and extra simplicity if you cash payment or cash disbursement journal calculation have a small business. With Quickbooks, expenses functionality is built into all plans rather than offered as an add-on (or gated behind higher plans) as with Xero. With either tool you’ll get reliable features for processing invoices and quotes. Looking at customer support, both Xero and QuickBooks Online have room to improve.
It offers basic invoicing, expense tracking, and financial reporting completely free of cost. These make it suitable for retail, manufacturing, or distribution businesses that need detailed inventory control and accurate cost accounting throughout their supply chain operations. These are very valuable for businesses that need to maintain strict compliance with US tax regulations without investing in additional software.
They built it because many small business owners struggled to handle accounting without the tools that large companies use. Xero is cloud-based accounting software created in New Zealand by Rod Drury and Hamish Edwards. QuickBooks is accounting software created by Intuit, a company started in the early 1980s by Scott Cook and Tom Proulx. Robust feature set includes thorough record-keeping, comprehensive reporting, excellent invoicing and inventory management, plus a capable mobile app. Unlimited users in all pricing plans. Yes, there are free accounting software applications available for companies and freelancers.