Xero VS QuickBooks Online: Comparison

Xero VS QuickBooks At A Glance

Xero is cloud-based accounting software with advanced accounting features, unlimited users, extensive integrations, and feature-rich mobile apps. It supports both cash-basis and accrual accounting, making it a strong choice for growing businesses with more complex accounting needs.

Like Xero, QuickBooks Online supports cash-basis and accrual accounting and offers advanced accounting features, a large integration marketplace, and robust mobile apps. It’s generally easier to learn than Xero, making it a strong option for businesses that want advanced accounting software without a steep learning curve.

Where Xero Wins

Both Xero and QuickBooks Online offer advanced accounting features and extensive integrations, but Xero has a few key advantages. Most notably, it includes unlimited users on every plan at no additional cost — a rare feature among accounting software providers.

Xero also includes features like inventory management and accounts payable across all plans, while QuickBooks Online reserves some advanced features for higher-tier subscriptions. Combined with its strong contact management tools and robust security, Xero delivers excellent value for growing businesses.

Here’s where Xero stands out:

Where Xero Falls Short

Xero’s entry-level plan is affordable, but its invoice and bill limits make it best suited for freelancers and very small businesses. Growing businesses will likely need to upgrade to a higher-tier plan.

Compared to QuickBooks Online, Xero relies on third-party integrations for payroll and payment processing rather than offering these features natively.

Xero also has a steeper learning curve than QuickBooks Online. While its advanced features appeal to experienced users, beginners may need more time to become comfortable with the platform.

Here’s where Xero falls short compared to QuickBooks Online:

Where QuickBooks Online Wins

QuickBooks Online stands out for its ease of use, making it a great choice for businesses that want powerful accounting software without a steep learning curve. While it’s best suited for small and midsize businesses, its higher-tier plans can also support larger organizations.

Compared to Xero, QuickBooks Online offers more invoicing customization, built-in mileage tracking, integrated payroll and payment processing options, and optional Live Bookkeeping services. An additional standout feature is that QuickBooks has recently added a free (but limited) plan — something that Xero doesn’t offer.

QuickBooks also offers additional financial tools, including QuickBooks Capital and QuickBooks Checking, giving businesses access to lending and banking services within the QuickBooks ecosystem.

Here’s where QuickBooks Online stands out:

Where QuickBooks Online Falls Short

QuickBooks Online doesn’t match Xero when it comes to user limits. While Xero includes unlimited users on every plan, QuickBooks Online supports a maximum of 25 users, and only on its highest-tier plan.

QuickBooks Online can also become expensive, especially if you need higher-tier plans or add-on services like payroll.

Here’s where QuickBooks Online falls short:

Xero VS QuickBooks Online: Pricing Comparison

Xero offers three pricing plans that support unlimited users.

Unfortunately, the lowest-priced Xero plan is quite limited, allowing users to enter only five bills and send 20 invoices per month. While this may be suitable for independent contractors or self-employed individuals, most users will need to upgrade to one of the more expensive plans.

Xero doesn’t offer built-in payroll but partners with Gusto. There is no built-in payment processing, although you can choose from several options, including Stripe and GoCardless. Live bookkeeping services are not available.

A 30-day free trial is available to test out the software. Discounts are available for nonprofits and users who own multiple businesses.

QuickBooks Online has five pricing plans. The more expensive QuickBooks plans include additional features and users. The recent addition of a free plan gives QuickBooks a slight edge, although this plan is quite limited and best for microbusinesses and freelancers.

Add-ons include QuickBooks Payroll, QuickBooks Payments to accept ACH, credit card, debit card, and other payments, and live bookkeeping services for additional help with your books.

QBO frequently runs discounts for new users. A 30-day trial is available. However, if you take advantage of this trial, you won’t receive a new user discount.

Xero VS QuickBooks Online: Features Comparison

Xero and QuickBooks Online both boast impressive feature sets. Both have basic accounting features, including invoices, estimates, bank reconciliation, expense tracking, and journal entries. With both programs, advanced features like time tracking and inventory management are available on select plans. Both also have robust reporting capabilities.

Xero has a more impressive contact management feature with smart lists for targeting specific customers. However, QuickBooks Online offers features you won’t find with Xero, such as mileage tracking and built-in lending, and also has stronger invoicing.

Here’s a full breakdown of the main features of Xero and QuickBooks Online.

Which Is Best For My Business: Xero Or QuickBooks Online?

Both QuickBooks Online and Xero are good accounting solutions, but the right software is going to depend on your company’s budget and feature needs.

QuickBooks Online is full-featured accounting software that is easy to use, even if you’re new to accounting. In addition to the standard accounting features you’d expect, QuickBooks Online also has advanced features, exceptional invoicing automation and customizations, and built-in lending. It also has mobile apps that, according to users, outperform other popular accounting software apps.

QuickBooks Online has always been a great option for small businesses. With the addition of the Advanced plan, QBO is a good choice for larger businesses, as well.

On the other hand, Xero may be the better choice for your business. Xero is strong accounting software that has everything you need to track the financials of your business. Some of its features really stand out, such as its customer management system.

However, there is a steep learning curve with this software. If you don’t have the time to devote to learning the software, QuickBooks Online may be the better fit.

Choose Xero If…

Choose QuickBooks Online If…

Make sure to check out our full reviews of Xero and QuickBooks Online for more details and to help you decide.

And if you find that neither company meets your needs, you may be better off with one of our top accounting software picks for small businesses.

Regardless of what route you choose, make sure to do your research and get hands-on with free trials to find the accounting software that’s right for your business.

Chelsea Krause is a writer who specializes in accounting, payroll, and small business loans. She has been helping small business owners manage their finances since 2016. She is a QuickBooks Certified User and former eCommerce store owner. Her accounting expertise has been quoted in Forbes and her work appears in Startup Nation, Small Business Bonfire, and Women on Business. Chelsea graduated summa cum laude with a BA in English & Creative Writing from George Fox University and studied abroad at the University of Oxford as well.

Chelsea KrauseLead Staff Writer

QuickBooks Online has a much more intuitive interface and is easier to learn, but once you get past the learning curve, Xero has more advanced features and unlimited users — not to mention that Xero is much cheaper than QBO.