Xero VS QuickBooks Online

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QuickBooks OnlineVSXero
Hardware or Software Requirements
Users and Permissions
Ease of Use
Mobile Apps
Customer Service and Support
Negative Reviews and Complaints
Positive Reviews and Testimonials
?Final Verdict?
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In cloud accounting software, the two biggest names are QuickBooks and Xero. But when you have two very capable software options, both of which offer payroll, invoices, transactions, bank feeds, and more, which do you choose? Well, that’s what we’re here to help with.

Developed in 2004, QuickBooks Online (see our review) beat Xero to the accounting scene by two years. With advanced accounting features, beautiful invoicing, 250+ integrations, and a brand new lending feature, it’s easy to see why the software is so renowned by accountants and bookkeepers.

Xero (see our review) is a robust accounting solution that rivals QuickBooks in terms of capability and popularity. It’s been around since 2006 and offers strong accounting, amazing customer service, access for unlimited users, good invoices, the ability to connect a bank account, and an impressive feature selection.

At Merchant Maverick, our goal is to help you to find the best software for your small business needs. To make your decision easier, we’ve carefully researched and tested both products. We’ll compare QuickBooks Online (QBO) and Xero based on features, pricing, customer experience, reputation, and more, so you don’t have to.

Don’t have time to read the whole post? Or looking for a different accounting option? Check out our top-rated accounting solutions to see our favorite recommendations.

See Our #1 Rated Accounting Software Pick


Winner: Tie

Both Xero and QuickBooks Online offer strong accounting. Each uses double-entry accounting and supports cash-basis and accrual accounting. In addition, each software has strong accounting features including bank reconciliation, fixed asset management, a chart of accounts, and plenty of accounting reports.


Winner: Xero

FeaturesQuickBooks OnlineXero
Expense Tracking
Bank Reconciliation
Chart of Accounts
Fixed Asset Management
Contact Management
Accounts Payable
Time Tracking
Project Management
Tracking Categories
Print Checks
Sales Tax
Tax Support
Importing & Exporting

QuickBooks Online and Xero offer very similar features. In some areas, like invoicing, project management, and lending, QuickBooks Online far exceeds Xero (especially since Xero has no project management or lending). In other places, like contact management, Xero provides the better feature. So how do we decide who is better?

In the end, it all comes down to accessibility. QBO offers many great features — project management, budgeting, inventory management, transactions and the ability to connect a bank account, etc. — but there’s a catch. These features are limited to the more expensive plans. Xero doesn’t limit features by plan, making it a more robust and realistic solution for many users, which is why we gave it the win for this section.


Winner: Tie

QuickBooks Online offers three pricing plans ranging from $15/mo – $50/mo, with payroll costing an additional $36 – $99 per month (plus $2/per employee). Xero offers five scalable pricing plans ranging from $9 – $180 per month, with payroll included. You can pay by credit card for either company.

For small businesses, QuickBooks Online is a much more affordable option. Xero’s smallest plan only gives customers 5 invoices and 20 transactions, which renders this plan useless to many small business owners.

For medium-sized businesses to large businesses, Xero pricing is just better. Xero offers payroll at no additional cost and supports unlimited users for every plan. QuickBooks Online doesn’t even come close in this regard.

In terms of pricing, the real winner will depend entirely on your monthly expenses, and your business size and needs.

Hardware & Software Requirements

Winner: Xero

As cloud-based software, QBO works with nearly any device so long as you have internet access and are using one of the following browsers:

  • Google Chrome
  • Mozilla Firefox
  • Internet Explorer 10+
  • Safari 6.1+

Xero is also cloud-based; it’s compatible with nearly any device with internet access and works with any one of these browsers:

  • Google Chrome
  • Internet Explorer 11
  • Microsoft Edge
  • Mozilla Firefox
  • Safari 8+

Both QuickBooks Online and Xero offer mobile apps for Android and iPhone.

The only reason Xero takes the cake in this category is that you can use Xero with Linux, a capability QuickBooks Online currently doesn’t offer.

Users & Permissions

Winner: Xero

Xero offers unlimited users for all five of its pricing plans. The company also provides some of the strongest user permissions in cloud accounting. QuickBooks Online only supports one, three, or five users depending on your pricing plan (you can add up to twenty-five users total, but the cost adds up fast).

In the end, how can you beat unlimited users?

Ease Of Use

Winner: Tie

QuickBooks Online is the clear winner here. QuickBooks Online offers a well-organized UI. Minus the occasional navigational difficulty, it’s easy to get used to the software and learn how it works.

Xero is only easy to use once you get to know the software. There is a steep learning curve and setup can be quite intensive. Xero does offer plenty of support tools to get over this learning curve, but QuickBooks Online is definitely easier to use.

If you end up choosing Xero, check out our free How To Set Up Your Xero Account guide; it will help you get started and optimize your Xero account.

Mobile Apps

Winner: QuickBooks Online

While there are a few complaints about QuickBooks Online’s mobile apps, most users find the apps incredibly helpful and easy to use. The apps receive 4.6/5 stars on iTunes and 4.3/5 stars on Google Play Store.

One of the biggest complaints about Xero is that their mobile apps are lacking key features and are ridden with bugs and crashes. It’s easy to see the winner in this section.

Customer Service & Support

Winner: Xero

Xero has the best customer service by far. In my experience, Xero representatives are well-informed and quick to respond to customers. The company also offers ample online resources, including a comprehensive help center, an in-software help button, a community forum, and lots of business and accounting guides.

In the past, QuickBooks has had notoriously poor customer service with extremely long wait time and holds. While the company has made significant strides to shorten their wait time and offer a better Help Center, Xero still offers more resources to its customers. On the plus side, QuickBooks Online does provide a contact phone number (Xero does not — a fact quite a few users have complained about), but the phone support is not enough to beat out Xero.

Negative Reviews & Complaints

Winner: QuickBooks Online

This is one category QuickBooks Online should not want to win, and yet here they are. QuickBooks Online has received many user complaints regarding poor customer service, bugs, limited mobile apps, and even unauthorized charges.

Xero, on the other hand, has received very few customer complaints (although, this could be because it has half as many users as QuickBooks Online and hasn’t been around as long). This small business accounting software is well-loved by most of its users and receives higher ratings across popular customer reviews sites.

Positive Reviews & Testimonials

Winner: Xero

While QuickBooks Online gets more positive reviews in terms of numbers, Xero receives a higher percentage of positive to negative reviews, which is why we’ve given it the victory in this section. Xero has earned 4.3/5 stars on GetApp and 4.4/5 stars on G2crowd (on this same site, QuickBooks Online only receives 3.7/5 stars).


Winner: Xero

Xero has over 500 integrations, while QuickBooks Online comes in with 250 integrations. QuickBooks Online used to offer upwards of 400 integrations, but since its drop in offerings, Xero is the clear winner.

But let’s be honest: once a company starts to offer more than a hundred, what more could you ask for? Both of these companies are the top accounting software companies when it comes to integrations, so you can’t go wrong with either choice.


Winner: Xero

Ordinarily, this section results in a tie, but Xero has set itself apart in terms of security.

Both QuickBooks Online and Xero use data encryption, redundancy, and physical security measures at their prospective data centers. However, Xero boasts an unheard-of 99.97% uptime and has one of the strongest security reputations in the cloud accounting world. In addition, QuickBooks Online users have reported downtime and outage issues on several occasions.

To learn more about cloud security read our posts Is My Accounting Safe In The Cloud? and What Is SSL? A First Look At Online Security.

And The Overall Winner Is…

Xero vs. QuickBooks Online

QuickBooks Online put up a very good fight, but in the end, Xero edges out the competition in a few key areas. Xero offers accessible features, better customer service, great invoices, free payroll, and more positive reviews. In this comparison, the people truly have spoken, and Xero is the winner.

This software is ideal for mid- to large-sized businesses, or businesses looking for a scalable software that will grow with their company. (That’s why we’ve named Xero the Best Accounting Software For Larger Businesses.) If you are looking for strong accounting capabilities, Xero won’t let you down. It’s important to note that there is a steep learning curve with this software, so if you’re not up for the challenge, QuickBooks Online might be a better choice.

Although QuickBooks Online didn’t win this mash-up, this software is still a contender for many businesses. This software is particularly ideal for small businesses; in fact, we’ve named it the Best Accounting Software For Small Businesses here at Merchant Maverick. If your company relies on invoices, QuickBooks Online’s invoicing capabilities are far beyond anything Xero can offer.QuickBooks Online also offers the unique lending feature, QuickBooks Capital (see our review) And if you need a project management feature, QBO is also the way to go. Who knows? QuickBooks Online’s new lending feature might be calling to you as well.

Or, you may find that neither company meets your needs entirely. In that case, our comprehensive accounting software reviews can help you make an informed decision during your hunt for the perfect accounting software. If you need extra help deciding, read our Complete Guide To Choose Online Accounting Software.

Check out our full Xero and QuickBooks Online reviews for more information. After doing your research, be sure to take advantage of the free trials and please reach out with any questions you have along the way.

See Our #1 Rated Accounting Software Pick

Chelsea Krause

Chelsea Krause

Head Accounting and Invoicing Writer
Chelsea Krause is a writer who has specialized in accounting for two years. She has a BA in English & Creative Writing from George Fox University and studied at the University of Oxford as well. She has been quoted in Forbes and her work appears in Startup Nation, Small Business Bonfire, and Women on Business.
Chelsea Krause
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Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Rachael Wong

    If I don’t want my cashiers to see my company expenses but want them to create sales receipts for my customers, is that possible with either software? If so, how do i go about it? Thanks!

      Chelsea Krause

      Hi Rachel,

      Thanks for reaching out! Setting this sort of permission is actually available with both programs. For Xero, you’ll go to settings>general settings>users>change permissions and select the “Invoice Only – Sales Only” role. This will allow your users to create sales, invoices, and receipts without seeing expenses. With QuickBooks Online, go to settings as well and under “custom user” you will be able to set the exact permissions you desire.

      I’m not sure what kind of business you are running, but if you want your cashiers to be able to create and print sales receipts on the dot, you will need POS software in addition to Xero or QuickBooks.

      I hope this helps! Please let me know if you have any other questions.

      Best wishes,

      -Chelsea Krause



        Many thanks for a great review but I still need some help. I have a small online retail business using Shopify. I’ve just finished the mammoth task of my quarterly VAT return using Excel spreadsheets and I am desperate for an alternative. My business partner is suggesting QBO but my accountant is saying XERO as his firm promotes this software but he has no experience of online retailing. With PayPal and Stripe taking fees, I cannot rely on the sales from Shopify giving me accurate totals. I have global customers so I need the VAT rates to be calculated automatically. Can you recommend either QBO or XERO for this purpose? I am growing fast so will need to employ fulfilment workers soon too.

          Chelsea Krause

          Hi Hazel,

          Thanks for reaching out! So both Xero and QBO sync directly with Shopify so either would allow you to continue to run your online business using Shopify. Both will also allow you to easily file quarterly VAT returns and add payroll for your future fulfillment workers.

          Generally, I recommend following the opinion of your accountant; however, in reading more about Xero’s VAT support, I found this article where several users had issues with their VAT being calculated correctly. QuickBooks Online, on the other hand, will automatically calculate your VAT rates. So if this important to your business, QuickBooks Online may be the better choice. I recommend bringing this concern about Xero’s VAT to your accountant to learn more and highly suggest signing up for a free trial of QBO before committing to the software.

          I hope this helps! Let me know if you have any further questions.

          Best wishes,

          -Chelsea Krause



            I have been with Xero but am thinking of integrating our payroll and health coverage. We wanted to go with Qsehra and thought Gusto with Xero would do it. However, it seems misleading on Gusto’s website to have a FAQ on Qsehra but when we signed up, they dont actually administer it. Im not sure if Quickbooks does it either. Do you have any suggestions or knowledge of this? Thanks.

              Chelsea Krause

              Hi Phil,

              Thanks for reaching out! I’m definitely not an expert on health care or Qsehra, but it seems like QuickBooks does support Qsehra. Here’s an article with more information. Xero currently doesn’t support Qsehra but may have other integrations besides Gusto that do.

              I hope that helps!

              – Chelsea Krause


                Very well written, Chelsea!
                I’ve been a faithful QB desktop Premiere user. I would consider switching to a solid online platform, but which one?
                I need a great inventory management platform, which has EDI and records lot numbers. We also need to have multiple price levels: dealer -professional -retail – custom: which one is better QBO or Xero?
                And we need multiple ship-to addresses per client: is that possible?

                Looking forward to your recommendation on platforms and apps.

                  Chelsea Krause

                  Hi KV,

                  Thanks for reaching out! Unfortunately, neither QuickBooks Online or Xero has the inventory features or customizability that your company needs. If you really want to switch to an online platform, you may be able to find an inventory integration that works with QBO or Xero. Here are links to QuickBooks Online’s integrations and Xero’s integrations. The other option would be to look at full ERP solutions, although those get really expensive really fast.

                  I know this is probably not the news you were wishing to hear, but I hope it still helps.

                  Best wishes, and let us know if we can help you in any other way!

                  -Chelsea Krause

                    Chelsea Krause

                    Hello again KV,

                    I thought of one more alternative. If you like the features and inventory capabilities of QuickBooks Desktop but still want the mobility of an online software, you could look into QuickBooks Hosting.

                    Best wishes,

                    -Chelsea Krause


                      Hi Jacob, Chelsea is right, you’ll need to look at Inventory add ons for your specific needs. There is definitely a solution out there for you in the Xero/QBO add on marketplace, so I’d hold off going with a full mid-size all-in-one ERP system. Some inventory add ons will do EDI natively, others will only do it via a 3rd party integration app (more cost). Most will do multiple price tiers, but check if you need (and if your new system will handle) such features as customer special pricing, customer discounts, promotional prices, volume based pricing, automatic mark ups etc.

                        Sarah Robarge

                        My husband and I have operated our own private Rolfing practice for many years. In February we began to play around with CBD nutritional supplements for our clients. The local paper did a small article and overnight the demand for our product went off like a rocket ship. We are getting multiple requests from health food stores, healthcare practitioners, pharmacies, and more. As a result we have decided to move our nutritional supplement manufacturing from my kitchen with a handful of private clients to a bigger production facility and begin developing, manufacturing, and wholesaling our products. I am have been my own accountant for many years, but the health care industry and manufacturing industry are two totally different animals. We are looking at manufacturing software like fishbowl, which is compatible with both Quickbooks and Xero. We will in a few days begin to be able to produce roughly 600-1000 finished units per week, but plan to triple our output or more in the next few months. We are brand new at this. Would you recommend a pairing of fishbowl with Quickbooks or Xero? Or would you have other recommendations? Right now there are four of us and I am COO and CFO rolled into one. So only one user is needed. Thank you for your thoughts.

                          Chelsea Krause

                          Hi Sarah,

                          Congratulations on the booming business! I don’t know much about Fishbowl, but am happy to help with the accounting side! Considering how quickly your business is growing and the level of growth you anticipate over the next few months, I would recommend going with Xero. Xero is more scalable and actually has the accounting features and unlimited users to support a growing business. Xero also has better customer support and learning materials. You also could end up spending more than necessary if you went with QuickBooks Online since you’ll have to pay for payroll separately (whereas Xero has built-in payroll support). There is a bit of a learning curve and you may not need the depth Xero offers quite yet, but switching over from QuickBooks Online to Xero down the road once you’ve outgrown QBO could be a hassle.

                          I hope this helps and best of luck in your business!

                          -Chelsea Krause

                            DAVE TEMPLE

                            This is an outstanding review; informative, clear and concise. Thank you. Now, I have basically one question: Our company is only (currently) two people; me & my wife. We only need one company account that ties to our business banking account. However, we need to send invoices to a litany of various clients, but from TWO DIFFERENT PEOPLE with two different emails/phone numbers, as we do different services for different clients. Should be simple; QB does NOT allow this function. Thank you for your help. Great website!

                              Chelsea Krause

                              Hi Dave,

                              I got in contact with Xero’s support team regarding your question. Here is what they said:

                              “In Xero, you’re able to set up multiple invoice branding themes. There are Standard and Custom DOCX options available. Your reader and his wife can each create their own unique branding themes with their individual email addresses and phone number for invoices they send their customers.

                              They can also create their own email templates.

                              Please note that emails sent from Xero organisations are sent from our email message service. Currently it’s not possible to send emails in Xero from a specified email address.

                              If their customer replies using ‘Reply to’ from the email they’ve received, their reply will go to the ‘reply-to’ email address that has been set up in the email settings. Currently, it’s only possible to set up one ‘reply-to’ email address.”

                              I’m sorry that this is not quite the news you were hoping to hear. As far as I know, I am unaware of any accounting software that is capable of two different emails. Maybe a fellow reader has found an adequate solution.

                              Best of luck,

                              -Chelsea Krause


                                Hi, thanks for the review. I’m the coordinator of a small NFP group. We rely mainly on grants for income, with some room hire as well. Currently using a VERY old version of MYOB and am torn between QBO and Xero. We have a total of 3 employees (1.5 FTE). Any advice or things to look out for would be greatly appreciated.

                                  Chelsea Krause

                                  Hi Meredith,

                                  Thanks for reaching out! I cannot confidently recommend one software over the other without knowing more about your business and its needs. However, I’ll try to help as much as I can.

                                  The biggest factors in deciding which software is best are budget and feature set. The main difference between the two programs is that QuickBooks Online offers project management and lending, which Xero doesn’t have. Xero is also better suited for medium to large-sized businesses and offers unlimited employees and built-in payroll (whereas QuickBooks Payroll costs extra and you can only have up to 25 employees). Both offer invoicing, strong accounting, income and expense tracking, contact management, and ample integrations.

                                  Each software also integrates with several nonprofit software add-ons that could help you manage your NFP grants. Check out our 10 Best Nonprofit Accounting Software Apps For 2018 and Best Nonprofit Integrations For QuickBooks Online posts to learn more.

                                  You can also read our Xero review and QuickBooks Online review to learn more about each software. Sign up for a free trial of each and see which you like best before purchasing. If you have any more questions, let me know!

                                  Best wishes,

                                  -Chelsea Krause


                                    I have a small business- sole trader. I do holiday house accommodation, so short stay bookings and have other properties on long terms lease through a real estate. Is there a better program I should use to manage everything. I own (mortgage) all properties so I am trying to figure out a central financial system to process everything to ensure all expenses are covered and to identify profits as well as do bugetting projections and goals.

                                      Chelsea Krause

                                      Hi Alice,

                                      Thanks for reaching out! if you’re looking for an all-in-one property management and accounting solution, I’d take a look at Buildium or Realtyzam. Both allow you to manage your properties and accounting in the same platform. Buildium’s features seem more geared toward your business, while Realtyzam is more suited for real estate agents (though it still may be worth looking at).

                                      Another option is to use property management integrations that connect directly with your accounting software. If you choose Xero, you can integrate directly with Re-Leased, and if you choose QuickBooks Online, you can integrate with Emphasys.

                                      I hope this helps!

                                      -Chelsea Krause

                                        Teresa Bell

                                        We have a property letting business with a number of tenants paying rent. We do not need to provide an invoice only a Rental Statement (Rent Book) from time to time. Obviously we have a number of out goings for Repairs and maintenance and insurance etc. Can you advise if xero or QuickBooks would be the better option. In the past we have used an Exel spreadsheet.

                                          Chelsea Krause

                                          Hi Teresa,

                                          Thanks for reaching out! I’m happy to help.

                                          So neither Xero nor QuickBooks Online support rental statements. However, both allow you to enter and track expenses and income. Both have a customizable chart of accounts, which you can use to categorize your expenses to view your maintenance, insurance, and repair costs.

                                          I cannot recommend a specific software without knowing more about your business. But it sounds like both options could work. Either one is going to be a huge step up from Excel sheets. If you have any further questions, let me know!

                                          Best wishes,

                                          -Chelsea Krause

                                            Steph Burnett

                                            Hi, I’ve been advised by my accountant to use Xero but we’re a financial advisory – most of what we do is paid by companies directly – we don’t invoice as such – they send a statement telling us how much “commission” we’ve earned from them and then send the money to us so we don’t “invoice” in the traditional sense. Having looked around Xero I’m struggling to see how the software fits around our business model – do I need to raise an invoice just to reconcile the commission payments coming into the account? I’ve also been looking at quickbooks as I believe there’s a facility to attach paper receipts/statements to the various transaction lines (so I don’t have to keep a massive file of paper receipts!) but can’t actually find it definitively on either software (only managed to find 1 review for Xero which seemed to say it didn’t have this facility) anyway, any help much appreciated!

                                              Chelsea Krause

                                              Hi Steph,

                                              Thanks for reaching out! In Xero, you shouldn’t have to create an invoice to record your payments and reconcile your account. Instead, you can add your commission payments as income and reconcile that way. Here’s an article from Xero about how to receive money transactions in Xero. Both Xero and QuickBooks Online do more than invoicing. They allow you to track expenses, manage bills, track time, reconcile bank accounts, and run important financial reports. The main difference between the two is that QuickBooks Online offers project management and Xero doesn’t.

                                              In QuickBooks Online, I know that you can attach images and files directly to an invoice, but I don’t think you can do so by line. I would call Intuit to verify.

                                              My advice would be to talk to your accountant about your concerns. See if they have any advice. Maybe they can show you why they believe Xero benefits your business model. It’s especially important to let your accountant know if you’re considering switching software (as not every accountant is familiar with each program).

                                              I hope this helps!

                                              Best wishes,

                                              -Chelsea Krause

                                                Lisa R.

                                                I own/manage a mobilehome park and we have about 200 homesites. I want to move from a paper accounting system to a computerized system. I have been considering Quickbooks Online for Mac (or would consider purchasing a PC for a desktop version) but have seen so many negative reviews, I don’t know what to do. We only have 1 employee – everyone else is considered self-employed – and we have a small number of 1099 contractors.

                                                Any suggestions?
                                                Thank you,

                                                  Chelsea Krause

                                                  Hi Lisa,

                                                  I’m happy to help! QuickBooks Online and Xero could both be good options. Each software allows your to manage locations. Both will handle your one employee and 1099’s for your contractors as well.

                                                  There are a few main difference between each software to consider. Only QuickBooks Online has project management and the software has better invoicing as well. However, if you’re worried about the customer reviews, Xero has far more positive customer reviews than QuickBooks Online and is about as close as you can get to QuickBooks Desktop in terms of features in a cloud-based accounting program. Other perks of Xero is that the software has unlimited users and more scalable pricing that will grow with you as your business does. Xero also includes payroll, which may be more cost effective than paying extra each month for QuickBooks Online’s payroll.

                                                  That being said, it’s important to note that Xero is a bit more difficult to learn and doesn’t have phone support. They do have email support and several online support resources.

                                                  Each option can help you run your business, so it’ll ultimately come down to which features are most important to you, how much you want to pay, and what kind of learning curve you’re comfortable with.

                                                  I hope this helps! If you have any more questions, please let me know!

                                                  Best wishes,
                                                  -Chelsea Krause

                                                    Keegan Hofeld

                                                    My wife and I are buying a coffee house and I have been struggling with the QB or Xero debate I have talked to QB a couple times and honestly found them much more willing to push their product than answering my questions, But i don’t want to make the wrong choice just because their sales team is trying to sell.

                                                    We basically only track income and expenses, we don’t send invoices or anything, our clover system integrates with both, our biggest need is honestly running payroll for up to 10 employees and tracking taxes. And while QB is quoting me almost double what xero is i still want to make sure i make the best choice.

                                                      Chelsea Krause

                                                      Hi Keegan,

                                                      Congrat on the new business endeavor! Both QuickBooks Online and Xero are good choices, so whichever you choose, your business’s accounting will be well taken care of. It seems like you’re leaning toward Xero. Form what you’ve told me of your business and its needs, it sounds like Xero might be a better choice. Xero plans include payroll which will save you a lot of money compared to QuickBooks Online. The only thing QuickBooks Online has that Xero doesn’t is project management and more invoicing automations (which you don’t need).

                                                      Xero doesn’t have phone support, but they do have email support and tons on online resources, and in my experience, I had a much easier time using those resources than QuickBooks Online’s phone support. So, if you’re leaning toward Xero, be assured that you’s not making the wrong decision.

                                                      I hope this helps!

                                                      Best wishes,

                                                      -Chelsea Krause

                                                        Keegan Hofeld

                                                        Thank you so much Chelsea, this article has been a great resource, and your response gives me confidence and that’s a blessing right now for sure.

                                                          Chelsea Krause

                                                          You’re so welcome! I’m happy to help!

                                                          -Chelsea Krause

                                                            Philip Reynolds

                                                            Which software would you recommend purely from it’s ability to issue quotes from any platform, be it desktop, laptop or smart device with ease. Furthermore with the ongoing technological advances of smart devices, changing business practices, being more mobile than fixed, where would you see one running your small Business from, Xero or QBO.

                                                              Chelsea Krause

                                                              Hi Philip,

                                                              Thanks for reaching out! If you’re just looking a QuickBooks Online and Xero, QuickBooks Online has much better invoicing. The templates are much more appealing and there are more invoicing automations like the ability to autoschedule invoices to be sent out at a later time.

                                                              In addition, QuickBooks Online has better mobile apps than Xero and is more mobile apps and is more mobile-friendly. If you’re looking for another option, Zoho Books might be worth considering. It has a similar feature set to QuickBooks Online, good mobile apps, and offers my favorite invoicing of any accounting software I’ve used.

                                                              I hope this information helps! Let me know if you have any other questions.

                                                              Best wishes,

                                                              -Chelsea Krause

                                                                David Temple

                                                                What an exceptional review. Thank you.
                                                                My wife and I have launched a two person company and wonder you thoughts. Our primary interest is in invoicing our services (not products), chronicling our time (hourly), and offering easy FAST invoicing/payment options. Also, easy to learn would be a great help.
                                                                I think I may have already answered my question but would appreciate your input.
                                                                Thank you!
                                                                Dave & Tammy

                                                                  Chelsea Krause

                                                                  Hi Dave and Tammy,

                                                                  Thanks for reaching out! From what I’ve gather of your business, I would recommend QuickBooks Online. QuickBooks Online has much more attractive invoice templates as well as better invoicing features, like the ability to autoshedule invoices. The software also has several payment gateways to choose from so you can accept online payments from your customers. In addition, the software supports time tracking and is easier to learn and set up than Xero.

                                                                  I hope that helps! Let me know if you have any other questions.

                                                                  Best wishes,

                                                                  -Chelsea Krause


                                                                    I work for a small petroleum distributor and our clients are branded gas stations. Since we do not have storage facility or our own transport trucks. We only buy from our contract supplier, hire a carrier to pick up from supplier and deliver to gas stations. So all we do here in the office is invoice customers (ach their accounts) and pay our supplier and carrier. We currently have an enterprise accounting software which is not cloud base. Since all the different tax rates involved, there are different tax rates for local taxes for different client depending on their store location. And then there is also fuel tax which we have to keep good record of the gross and net gallons and where it came from and where it went (current software takes care of that. But it can be done via excel as well as long as we follow the template guide provided by department of revenue). In your opinion, would Xero or aQB be able to handle that? Fuel prices also changes daily so depending on the date of the invoice and which brand/supplier, there’s a diff pricing.

                                                                      Chelsea Krause

                                                                      Hi Loretta,

                                                                      I hope you’re doing well! Both Xero and QuickBooks Online can handle an unlimited number of sales tax rates. QuickBooks Online has slightly better invoicing and more attractive templates, but both would get the job done. In both programs, you can set default fuel prices that can be adjusted when you’re creating invoices.

                                                                      Keeping records of the gross and net gallons and where they came from and went might be a little tricky. I currently don’t know of a way to manage this in either program. If you are willing to use excel to handle this, then it may be worth the switch.

                                                                      I hope this helps. Let me know if you have any other questions!

                                                                      Best wishes,

                                                                      -Chelsea Krause

                                                                        Carolyn Stidston

                                                                        Hi I have 3 nursery schools, I am looking at a package that will do my payroll for 32 staff , allowing me to send info direct to HMRC and then my pension provider Standard Life. The main purpose of me wanting to have soemthing such as Quickbooks is to have all my accounts, payroll , invoicing etc in a cloud based system , making it easier to control and have in one place. My business is slighly less straight forward when it comes to invoicing as I have a variety of rates for children’s sessions depending upon location, receiving the gov grant etc each nursery has basically 3/4 tarrifs to work from when producing invoices….any recommendations is a system that can work with 3 nurseries and different rates??

                                                                          Chelsea Krause

                                                                          Hi Carolyn,

                                                                          Thanks for reaching out! I’m happy to help you choose a good cloud-based option.

                                                                          Based on what you’ve told me about your business, I would recommend using QuickBooks Online as long all 32 of your staff members don’t need user access to QuickBooks Online. QuickBooks Online has beautiful invoicing and lets you invoice services, so you can easily customize and save your rates. It also has location tracking to help you manage your three nursery locations. It is worth noting that payroll is going to be a bit expensive with QBO at $2/per employee per month.
                                                                          If you need a cheaper payroll option, Xero has built-in payroll that comes at no additional cost. Xero also has location tracking and unlimited users; however it only allows you to invoice items not services (you can work around this with a custom invoice template, but it’ll make for a more complicated invoicing process).

                                                                          I hope this helps! Let us know if you have any other questions.

                                                                          Best wishes,

                                                                          -Chelsea Krause

                                                                            Jenny lee

                                                                            Your information is useful for us thanks for sharing…

                                                                              Chelsea Krause

                                                                              Hi Jenny,

                                                                              I’m glad you found the information helpful!

                                                                              Best wishes,
                                                                              -Chelsea Krause


                                                                                Which software would you suggest to owners of a small tour operator business in a developing country working mainly in cash with other small in-country operators/accom or activity providers?

                                                                                  Chelsea Krause

                                                                                  Hi Sally,

                                                                                  Of the two, I’d suggest QuickBooks Online as it is better suited for small businesses. Xero’s complexity and features are probably beyond what your business would need.

                                                                                  If you’d like another option besides QuickBooks Online, Zoho Books might be a good alternative. Zoho Books has almost as many features as QuickBooks Online, but is much more affordable and has better international capabilities. You can read more in our Zoho Books review.

                                                                                  Both QuickBooks Online and Zoho Books are designed specifically for small businesses and offer cash-basis accounting as well as accrual accounting, so you can’t really go wrong with either choice. If you have any further questions, please let me know!

                                                                                  Best wishes,

                                                                                  -Chelsea Krause


                                                                                    Thanks for the post, it is really useful! I have a question regarding recurring transactions. I have been working with QB Online and the only way to create recurring transactions is to manually enter each one of your clients’ credit card info in the system. This is greatly discouraged by credit card companies, as you are creating a credit card list. This has caused problems in the past for our business, so we are thinking about switching to Xero. I know Xero has an integration with Rerun for recurring billing, but do you know what the process of creating recurring transactions looks like with Xero+Rerun? Do you still need to introduce credit card numbers in the system yourself? Or is there a way in which clients can do so? Thanks!!

                                                                                      Chelsea Krause


                                                                                      Thanks for reaching out! I’ve been in touch with both Xero and Rerun. Xero allows you to send recurring invoices, though they do not store any credit card information in the software themselves. With the Rerun integration, users will have the option of saving and entering their own credit card information into Rerun, so you won’t have to do so.

                                                                                      I hope that helps!

                                                                                      Best wishes,

                                                                                      -Chelsea Krause


                                                                                        As of now, am all paper work, Would anyone of these help me with my Auto Repair Shop? Can I store my customer information on what I did to their car? Like what kind car, engine size and what I have done to it. Beside me, I like to have 3 more employees. I don’t want 3 or 4 software just help run my shop.

                                                                                          Chelsea Krause


                                                                                          Thanks for reaching out! Both Xero and QuickBooks online would be able to help you manage your Auto Repair shop. Both programs would allow you to manage expenses, create service-based invoices, record inventory, and manage employees.

                                                                                          There would be a couple of ways you could store your customer information. Both Xero and QuickBooks Online allow you to record customer contact information and customer notes where you could input details like the make and model of the customer’s car, the engine size, etc.

                                                                                          You could also record the work you’ve done for that customer using either Xero or QuickBooks Online’s project management feature. When you go to a contact in Xero or QuickBooks, the programs will show you all of the projects and invoices attached to that customer, so you can see all of the past work you’ve done.

                                                                                          Personally, I prefer Xero over QuickBooks Online because Xero is more developed and has much better customer service. However, the software’s features can definitely be overkill for some small businesses and it has a bit of a learning curve. Xero also only supports payroll is 37 states so you’d want to make sure your state is covered.

                                                                                          If you’re looking for something more manageable and geared toward small businesses, QuickBooks Online may be the way to go, however, the software can still be a bit difficult to navigate at times. It’s worth noting that to use inventory and the projects feature in QuickBooks Online, you’ll need to purchase the $50/mo Plus plan, and payroll is also an additional cost.

                                                                                          I hope this gives you a better idea of how each program could work for your business. Be sure to take advantage of the free 30-day trials that Xero and QuickBooks Online offer and check out our complete Xero and QuickBooks Online reviews for more details. If you have any further questions please feel free to ask!

                                                                                          Best wishes,

                                                                                          -Chelsea Krause

                                                                                            Jack Drazen

                                                                                            Bottomline: It’s not about which cloud accounting software is best, but which one will cause you the least amount of pain.

                                                                                            When I decided I needed some accounting help, I bought QuickBooks Online Plus. Then I hated them with all my guts and switched to Xero. Now I’m disappointed with Xero and will switch back to QuickBooks Online Simple Start. Does that mean I recommend QuickBooks Online? No, it’s like being asked if you want to be kidnapped by someone who hits you (QuickBooks) or someone who will lock you up in a small room (Xero).

                                                                                            If you’ve never used an accounting software and need help in that area, then whichever you choose is going to be better than nothing. Just make sure you remind yourself that those first days, weeks or months of loving the software will turn to disgust and hate. It’ll help you to know that both of them will let you down.

                                                                                            If you’re thinking QuickBooks Online, go with their cheapest option unless you’re 100% positive you need a particular feature. You can upgrade later, but you’re not allowed to downgrade.

                                                                                            If you’re thinking about switching from QuickBooks Online to Xero, make sure you use Xero for at least a couple of hours BEFORE changing. Ask someone who already has Xero, or take it for a spin with their free trial. Why? You don’t know how painful it’ll be when you try to do something you’re used to doing in QuickBooks Online, only to find out is extremely complicated, or it’s something you can’t even do in Xero.
                                                                                            It can be a small annoyance that will build up until you curse them, or it can be a deal-breaker. So be sure you try out your usual workflow in Xero before making the switch.

                                                                                            Both of them are kidnappers that will have you and your data hostage. Both of them will disappoint you. Both of them will make you mad. Although they’ll upset you in different ways.

                                                                                            My best advice is to set your expectations as if you’ll lose an arm, get beat up and have your fingers broken. It’s that mindset that’ll help you out when you’re cursing their software: “Hey, at least I still have all my fingers. It could be worse.”

                                                                                              Chelsea Krause

                                                                                              Hi Jack,

                                                                                              I’m sorry to hear that you had unpleasant experiences with both Xero and QuickBooks Online. While accounting can be frustrating at times, these programs are designed to make life simpler, and I assure you these companies are not keeping your data hostage. If you are still unsatisfied with QuickBooks Online, there are other easy-to-use cloud options out there like Zoho Books and Wave that might be worth looking at.

                                                                                              -Chelsea Krause


                                                                                                Thank you so much for your review! Helpful and detailed. I just wanted to reach out to tell you my partner and I had such a laugh reading it – it was really refreshing to actually read a funny person like you ! Cheers!


                                                                                                  Which software would you suggest to small business owners specializing in e-commerce and have inventory?

                                                                                                    Chelsea Krause

                                                                                                    Hi Anissa,

                                                                                                    Thanks for reaching out! Both Xero and QuickBooks Online offer eCommerce integrations and inventory capabilities.

                                                                                                    Xero offers 7 eCommerce integrations, including Shopify, BigCommerce, eBay, WooCommerce, Magento, OpenCart, and Ecwid. No matter which Xero plan you use, you’ll have access to inventory. Xero records basic inventory information and also shows you your current stock level, average purchase costs, and the number of items committed to quotes. There are no low payment reminders available, but you can add images to your items.

                                                                                                    QuickBooks Online offers 34 eCommerce integrations, including WooCommerce, Shopify, eBay, Magento, and more. QuickBooks Online only offers inventory for their QuickBooks Online Plus plan. QuickBooks Online records basic inventory information and SKU numbers and item images as well. Unlike Xero, QuickBooks Online allows you to set inventory reorder points and create inventory bundles as well.
                                                                                                    Both Xero and QuickBooks also offer a Zapier integration, which connects your software with 40+ eCommerce solutions.

                                                                                                    Ultimately, both are great options and you can’t go wrong with either one. I personally prefer Xero, however, the right choice for your business will ultimately depend on your business’s specific needs and price range. I hope this helps! Let us know if you have any further questions.

                                                                                                    Best wishes,
                                                                                                    Chelsea Krause


                                                                                                      Thank you for your article.
                                                                                                      I wonder is it possible to backup data from both xero and qbo to my own drive as a safety measure?

                                                                                                        Chelsea Krause

                                                                                                        Hi John,

                                                                                                        Thanks for reaching out! You won’t be able to create a full company backup (as you would in QuickBooks Desktop Pro), but you can export individual files and backup your data that way.

                                                                                                        With Xero, you can export your chart of accounts, reports, contacts, invoices, bills, fixed assets, budgets, and your inventory. You can learn more on the Xero community.

                                                                                                        With QuickBooks Online, you can export your sales, expenses, invoices, bills, customers, inventory, and reports. I hope this helps!

                                                                                                        Best wishes,
                                                                                                        -Chelsea Krause

                                                                                                          Al Balzowski

                                                                                                          Thank you very much for your thorough review and comparison.
                                                                                                          We have been using desktop QB for several years, and are now contemplating moving to an online platform (QBO or Xero), especially for the possibility of entering transactions “automatically” via ReceiptBank and HubDoc.
                                                                                                          During these years I’ve accumulated dozens and dozens of “Memorized Transactions” in QB, which greatly help when posting recurring transactions.
                                                                                                          Do you know if any of the two (QBO or Xero) would allow me to upload those QB memorized transactions, so I wouldn’t need to recreate them, which would be a tremendous amount of work?
                                                                                                          Thanks in advance for your kind assistance.

                                                                                                            Chelsea Krause

                                                                                                            Hi Al,

                                                                                                            I’m glad you found the comparison helpful! Unfortunately, neither QuickBooks Online or Xero will allow you to transfer your existing Memorized transactions from QuickBooks desktop into their programs. I did a bit of research to see if anyone has discovered a workaround for this, but my search came up blank. As far as I know, you’ll have to recreate each Memorized Transaction manually.

                                                                                                            Best wishes,
                                                                                                            Chelsea Krause

                                                                                                              Chelsea Krause

                                                                                                              Hi Al,

                                                                                                              I still haven’t found a workaround for having to recreate your memorized transactions when switching over to QuickBooks Online or Xero, but I did find a Memorized Transaction report within QuickBooks Pro that might be helpful. The Memorized Transaction Listing report will show all of the memorized transactions you’ve set, so you can have all of the information in one place when (or if) you recreate them in another software. Hope that helps a little!

                                                                                                              Best wishes,
                                                                                                              Chelsea Krause


                                                                                                                LOL @ your comment about the likelyhood of the Cubs winning the world series


                                                                                                                  it looks like xero is charging $60 per month for 5 employee

                                                                                                                    Amad Ebrahimi

                                                                                                                    Where do you see that? I see $30 here: https://xero-us.sjv.io/c/205352/384921/5453


                                                                                                                      Whilst I find Xero great on the whole, it misses a basic accounting function in not offering the ability to create RCTI’s without a seriously painful and messy workaround. Sadly the support area has refused to take this basic request seriously (people have been asking for this for over FIVE years) and are more focused on trying to make the program look pretty and have ‘wow’ factor. It is missing basic in house features, and is sadly lacking.


                                                                                                                        We sell tea via a WordPress site with Woocommerce as the back end. QBO does not handle our fraction units of inventory at all (1/4,1/2 & 1lb). How well does the inventory piece work with Xero and how tight is the integration with Woocommerce?

                                                                                                                          Chelsea Krause

                                                                                                                          Hi Dave,

                                                                                                                          Thanks for reaching out! Xero does have an integration with Woocommerce, however, Xero doesn’t have the inventory capabilities you need either. The software’s inventory feature is incredibly similar to QuickBooks Online’s and you won’t be able to manage the fraction inventory units.

                                                                                                                          Honestly, I don’t currently know of a software that does support fraction inventory units. You might be able to find an inventory integration through QBO or Xero that solves this. You might possibly be able to make Zoho Books work for your needs (as you can choose your item unit type), but even if you are able to select pounds as your unit type, I’m not whether or not the software will support fraction units. (Zoho Books also has a WooCommerce integration.)

                                                                                                                          Another option is to create separate items for each amount of tea, ex. 1/4 lb black tea – $5, 1 lb black tea – $10, etc.

                                                                                                                          I hope you find the solution you’re looking for. If anyone else has any experience using fraction inventory units with their own small business software, we would love to hear about them.

                                                                                                                          Best wishes,
                                                                                                                          -Chelsea Krause


                                                                                                                            Fishbowl Inventory integrates with both QB and Xero and it handles various units of measure, including fractions.


                                                                                                                              fyi, I just checked the quickbooks website and it looks like the simple start and essentials plans have increased in price.

                                                                                                                                Chloe Bahal


                                                                                                                                Thank you for the heads up, we will look into the pricing and update the review accordingly.

                                                                                                                                  Scott Johnson

                                                                                                                                  I am excited about Xero as recommended by a financial friend. I am about to subscribe to Ricochet POS software. Any experience with integration?

                                                                                                                                    Chloe Bahal

                                                                                                                                    Hi Scott,

                                                                                                                                    Unfortunately I don’t have much information on Ricochet POS so I can’t speak confidently on the integration. If you have further questions please contact us.

                                                                                                                                      Simon Woodhams

                                                                                                                                      re: this review

                                                                                                                                      if this review was updated on the 4 June 2016 – i would like to know what was updated as a lot of the feature information is completely wrong!

                                                                                                                                        Julie Van Blarcom

                                                                                                                                        Reading this on August 30, 2016 –


                                                                                                                                        Thank you for your review of June 4 2016. It was so helpful. Is there an even newer update?

                                                                                                                                        I am going to set up a system for a very small company. User ease is critical for me even though I know some basic accounting ( in the early days of computerized accounting! Lol). I am leaning toward Zero and your review has convinced me to use their product.

                                                                                                                                        Looking forward to more reviews.


                                                                                                                                          Katherine Miller

                                                                                                                                          Hi Julie,

                                                                                                                                          No new updates; we typically update reviews every four to six months. I’m not aware of any major changes in either program which would substantially alter the comparison. Customer service is a bit of an unknown until we re-test it, but that aspect of the comparison is based on years’ worth of experiences, and I doubt it would change substantially overnight. Xero has added a couple of states to its payroll offering, and there have probably some minor improvements to both pieces of software over the past three months–but again, nothing earth-shattering. 🙂

                                                                                                                                          Best of luck as you try out Xero! I’d recommend starting with the free trial to test out the interface and see if the program is a good match for your company’s needs.


                                                                                                                                            Art Rothafel

                                                                                                                                            Great article.

                                                                                                                                            I also would love an update whenever appropriate.

                                                                                                                                            I’ve been using QB standalone for 20 years and am in the process of researching an online solution that supports both my online store (Volusion) with QB online. It’s a HUGE obstacle.

                                                                                                                                            So far, I’ve only found that Xero will integrate through a 3rd party (Vextras) with Volusion.

                                                                                                                                            Not being able to integrate seamlessly Volusion to QB online is a deal breaker for QB online and perhaps a deal maker for Xero.

                                                                                                                                            Am I missing a 3rd party software that integrates Volusion with QB online? I would love to compare.

                                                                                                                                              Katherine Miller

                                                                                                                                              Hi Art,

                                                                                                                                              OneSaas and Unify both offer a Volusion integration for QBO; you can read the details here.

                                                                                                                                              As for an update, it’s in the works. You should be seeing one within the next month or so. 🙂


                                                                                                                                                Faris Shahin

                                                                                                                                                Hello Kathrine

                                                                                                                                                This has definately put me on the right track; i am starting my own bookeeping company and was going to buy Intacct; but i decided to start simple with either Xero or QBO but i still have some questions before i decide and i hope you can help;
                                                                                                                                                – which one allows to have multiple companies under one subscription since i will have many clients and each will have their own company.
                                                                                                                                                – can you explain more what does the payroll function do generally..
                                                                                                                                                – which one is better equipped to handle branches, since some of my clients are restaurants and they do have multiple locations under one company and one bank account.
                                                                                                                                                – which one have dimensions or tags; and how many does each have.
                                                                                                                                                – can those tags be used on all of the TB accounts including the BS and bank..
                                                                                                                                                – can dimensions be preset on the AR and AP subledgers as well..

                                                                                                                                                Hope you can help


                                                                                                                                                  Faris Shahin

                                                                                                                                                  Also another concern i had; does any accouting software has the ability to send automatic notifications to clients once a certain job is completed; for example if i am finished with the AP of company X and i want to let the owner know; is there a functuonaluity other than an email which is directly can be sent from the system to the mobile or email of the client.


                                                                                                                                                    Thanks for the review Katherine! My question relates to project-based accounting and whether either of these options are capable for that setup. I have a consulting/recruitment firm for which I have multiple jobs with each client that I’d like to track revenue and expenses for. Also, we will have multi-state payroll to manage in the next couple months. It sounds like Xero may not be able to fully support that need at this time (depending on which states we’re filing in)?

                                                                                                                                                    I’ve worked with QBO in the past and I’ve never liked it in comparison the QB Pro desktop version. I feel it loses a lot of its functionality and reporting features. Are either or both of these well-suited to handle a job costing system?

                                                                                                                                                    My second question relates to cash flow forecasting. I think QB built in tool is worthless, at least in the desktop version. So I end up creating sales orders for all closed deals that I’ll invoice in the future and run an open sales order report for incoming cash flow projections. Is that something that can be done with either of these two online options.

                                                                                                                                                    I plan to test drive Xero over the weekend to see if it performs how I’d like, but thought you might have some good insights. I’d like to not go online at all, but we have three key people who want access to the data without creating and sending backups all the time. I don’t know another way to go without paying for QB Enterprise w/ their cloud-hosting service. Any suggestions? Maybe have one central computer with a Pro license that we can each VPN to as needed?


                                                                                                                                                      Chris Huebner

                                                                                                                                                      I have the exact same questions at Ian, please advise

                                                                                                                                                        Grace Choong

                                                                                                                                                        Hi Ian

                                                                                                                                                        I do have similar questions to you especially when it comes to multiple projects. Are you able to advise on whether xero could resolve your problems?



                                                                                                                                                          Thank you for your great review. I still have a few questions:

                                                                                                                                                          1) Obviously most of the professional accountants for small businesses know QuickBooks and accepted it as a standard de facto. How easy is to find a professional who agrees to deal with the Xero as a repository and source of accounting data?

                                                                                                                                                          2) If a small business needs to have only software for bookkeeping will it change you recommendations on choosing between only two major players QBO and Xero? Or there is software that does this bookkeeping job better than QBO or Xero?

                                                                                                                                                          3) Is it easy (or possible at all) to switch between QBO and Xero? For example, to work with QBO for a while and then to export all the collected accounting data from QBO and import to Xero? Or from Xero to QBO?

                                                                                                                                                            Katherine Miller

                                                                                                                                                            Hi Ted,

                                                                                                                                                            1) This is pretty easy. You can find a list of Xero-certified accountants here, with an option to search by region.

                                                                                                                                                            2) Depends what you mean by “only software for bookkeeping.” There are a lot of factors that go into the equation, and the best software for any given company will be dependent on those variables. For instance, how many employees does the company have? Does it sell products, services, or both? Does it require job costing? Etc. Any accounting software I’ve rated 3.5 stars or above will likely be the best option for some companies – and none of them will be the best for all companies. While Xero is often my first recommendation, followed by QB Pro and QBO, there are also companies I think will be better served by other software: Zoho Books, Wave, FreeAgent, etc.

                                                                                                                                                            You can find an article on choosing accounting software here which details a step-by-step process for choosing accounting software to match your company’s needs. For any small business owner new to the world of cloud-based accounting, I’d recommend starting there.

                                                                                                                                                            3) Yes, switching between the two is possible. However, it’s far easier to switch from QBO to Xero than the other way round. Xero provides instructions on making the switch here. For QBO, you’ll need to export all your Xero files as csv or xls files. It’s doable, but a bit of a pain.

                                                                                                                                                            As I recall, you commented on the site before; at the time, you were looking at Wave or Xero. Did you end up trying either?



                                                                                                                                                              Hi Katherine,
                                                                                                                                                              thank you very much for the answers.

                                                                                                                                                              Yes, to find Xero-aware companies as you recommended was easy, but there is not a lot of them around Seattle. On the other hand, a lot of work these days is done online, so the distance probably is not a key factor.

                                                                                                                                                              2. My specifics is: single-person start-up (LLC), 6 months now in stealth mode and getting ready to start operation. So currently there are no revenues, just expenses. No expansion and therefore no company payroll is anticipated. This is the reason I just need “simple bookkeeping” for expenses so far. A few months ago I was aiming at Wave (yes, you have great memory!) , primarily because simple bookkeeping in Wave was free. But I was not persistent enough with Wave, and so far I still keep my expense records on a couple of spreadsheets. But pretty soon I’ll simply have to get serious and start using some professional accounting tool and yes, primitive expense tracking should be replaced asap by solid “double-entry” approach. It should be easy to export data in CSV format from Excel and to import it into some accounting software – QB, Xero or Wave. So I am really at decision point now. QB has so awful reputation that it is scary. Reviews on Amazon for the last several years show how enormously people suffer, and not only from the buggy software and poor tech support, but also from extremely greedy behavior of Intuit. Maybe something started to change at Intuit with the appearance of Xero as a real competitor. We will see.
                                                                                                                                                              Seasoned programmers have a rule: “Design for the future, code for the immediate needs”. The same rule that I am trying to apply also to my accounting – to anticipate my future needs, but not to jump immediately for the services that will start charging me for something that I currently do not use.
                                                                                                                                                              And yes, I’ve read the article that you recommended. Very useful.

                                                                                                                                                              Thank you again for your kind response and advises.

                                                                                                                                                                Katherine Miller

                                                                                                                                                                Hi Ted,

                                                                                                                                                                There are also accountants familiar with Xero who are not Xero partners and aren’t listed on Xero’s site. Though of course, it requires a little more legwork to find them.

                                                                                                                                                                Without knowing all the details of your situation, I can’t make a definite recommendation, but from what you’ve said, if you like Xero, I’d suggest starting out with their free trial, followed by the $9 plan, if that will cover you for the time being. Then upgrade to the $30 plan if/when you have enough activity on your account to warrant that. Since all your data will transfer freely between plans, that gives you some “design for the future, code for the immediate needs” flexibility. Or you could always try Wave again; it’s pretty impressive for a free program – but if the problems ever start costing you an hour or more per month, it’s time to think about what your time is worth and whether paying for a program will save you money and hassles in the long run.

                                                                                                                                                                QB Pro is also a good option, though it has a lot steeper learning curve than most cloud-based software. But it’s also more features for less money (the program cost comes to roughly $100/year, spread over 2-3 years).

                                                                                                                                                                Best of luck as you consider your options and make a decision!

                                                                                                                                                                  Joe Faris

                                                                                                                                                                  We are CPAs and work with all cloud-based accounting systems.

                                                                                                                                                                  Several years ago, QBO was an awful product, but the only one available. Then, Xero, Wave and other cloud-based systems were introduced. QBO then picked up their game incredibly. In our rankings, they went from a 3 to an 8.5 on a scale of 10. So, in this regard, Xero was the best thing that happened to QBO users.

                                                                                                                                                                  But, there is no comparison between the two products. QBO has tons more functionality than Xero. The problem is that unless you are a very experienced user (not someone just downloading the trial versions to review the products), it is impossible to adequately evaluate the products.

                                                                                                                                                                  The author does an excellent job scratching the surface with this comparison and it is very valid for a small, stagnant business. For a growing business, though, Xero is a terrible product because these businesses will eventually need the functionality that QBO offers and is not available in Xero. Some of this functionality is the ability to add on the fly, match open invoices to downloaded bank transactions, reclassify transactions in bulk, etc.

                                                                                                                                                                    Katherine Miller

                                                                                                                                                                    Hi Joe,

                                                                                                                                                                    Thanks for your comment, and my apologies for the slow response; I’ve been out of town.

                                                                                                                                                                    I found your examples of feature discrepancies puzzling, as Xero has offered the ability to reclassify transactions in bulk since April 2015 (“Find and Recode”), and it’s been able to match open invoices to downloaded bank transactions since at least October 2013, when I first evaluated it. I wasn’t quite certain what you meant by “add on the fly,” but if you’d like to clarify, I’d be happy to check into that.

                                                                                                                                                                    In checking out your website, I noticed that you only advertise services using QBO – in fact, your Outsourcing package includes the phrase, “We do 100% of the accounting using QuickBooks Online.” Do you currently offer any services using Xero?

                                                                                                                                                                    Regarding our review process, the editions of accounting software we evaluate at Merchant Maverick are the full versions of the software, not separate trial versions. While in the case of cloud-based software we may use free trials rather than an ongoing subscription, the functionality is exactly the same. If it isn’t, we’ll buy the full product to test it thoroughly. Nor do we do a cursory evaluation of the program and then forget it; we routinely re-examine programs to explore added features, changes in customer service quality, new bugs, etc. While the purpose of this comparison article is to give an overview, you’ll find the nitty-gritty details in our individual evaluations of Xero, QBO, and for that matter QB Pro.

                                                                                                                                                                    If you see a significant disparity in features between Xero and QBO, I’d love to hear some specifics. I’m always open to revising my opinion based on new information.



                                                                                                                                                                      A great side by side review, i’d like to note that value for money seems to be on the side of QB in Australia, as our Xero prices are much higher… $50 for Standard vs QB’s $35 for Plus, and Xero fails to tick alot of the boxes due to poor design decisions for inventory management.

                                                                                                                                                                        Katherine Miller

                                                                                                                                                                        Hi Mike,

                                                                                                                                                                        Yes; the review deals with the US versions of both pieces of software, but it’s good for readers from other parts of the world to be aware that both pricing and features vary significantly by region. At a glance, I’d agree with you that the value-for-money is definitely on QB’s side in Australia. If I had to guess, I’d say that Xero and QB are both offering extremely competitive pricing in markets where they’re not as established, and less competitive pricing where they have a well-established customer base.


                                                                                                                                                                          Kevin Mathes

                                                                                                                                                                          Hi Katherine,

                                                                                                                                                                          I really appreciate this side-by-side comparison as I am currently choosing between these two accounting software options. I use NeatDesk to electronically scan and file things like receipts. I know NeatDesk can export to Quickbooks, but do you know if this is an option with Xero? If so what have you heard with regards to ease of compatibility? I want to minimize bugs, glitches, and future headaches.


                                                                                                                                                                            Katherine Miller

                                                                                                                                                                            Hi Grant,

                                                                                                                                                                            You should be able to export from NeatDesk to Xero, no problem. However, the info’s a little iffier as to whether NeatDesk offers a full integration with Xero as it does with QB. According to this blog post, they were working on it back in February, and the integration is listed for both their Windows and Mac versions. However, when you try to click the link to the integration, you get a 404 error. The information I’ve gotten from Neat customer service suggests the integration is not yet available.


                                                                                                                                                                              ElectriTech, Inc.

                                                                                                                                                                              Thanks for the comparison data.
                                                                                                                                                                              I have been a QB desktop user for 12 years.
                                                                                                                                                                              I tried QB On-line and had mixed feelings about it.
                                                                                                                                                                              Some aspects were very user friendly and some were so frustrating I wanted to throw my computer across the room, particularly payroll and check printing/alignment.
                                                                                                                                                                              Due to the current Denver market we are so slammed I don’t have time to deal with software that isn’t user friendly.


                                                                                                                                                                                Will you update this article? It has been almost a year and I am sure many things have change for both companies. For example, Xero now has a chat whereas you write it doesn’..

                                                                                                                                                                                  Katherine Miller

                                                                                                                                                                                  Hi Yana,

                                                                                                                                                                                  The article was updated on 6/13/2015. I’m not sure why that date isn’t showing up, but I will look into it. All information should be accurate as of that date.

                                                                                                                                                                                  As for Xero’s chat function, I am not aware of a Xero support chat feature. (Both Xero and QBO have sales chat features, but those are not used for support.) Can you tell me where you’re seeing this?



                                                                                                                                                                                    Has Xero just put up their price since you published this article last week? The standard plan I can see on their website says it’s $50 per month and the starter is $25 per month, a lot more than the table above. https://www.xero.com/au/pricing/

                                                                                                                                                                                      Katherine Miller

                                                                                                                                                                                      Hi Linda,

                                                                                                                                                                                      The pricing I list (for both Xero and QBO) is for the U.S. version, since most of our readers are from the U.S. The Australia version of Xero is significantly more expensive for the lower 2 plans and less expensive for the highest. Also, plan features may vary slightly depending on your country.



                                                                                                                                                                                        I do not understand how anyone could possibly consider Xero a “clear winner”. I have some clients who use Xero and others who use QBO. Hands down, I would rather work with QBO any day, any time over Xero. Where the author smiles, I find myself gaining frown lines, cursing, and getting ready to throw my monitor across the room…all due to the “ease of use”. I would NEVER suggest Xero to ANYONE.


                                                                                                                                                                                          This is a solid, well written high-level comparison Katherine. Though I’ve only been exploring Zero for a short time, I find your comparison is quite thorough and accurate to my experience as well. A long-time QB desktop user, there have been a few things that have frustrated me with Xero, namely the seeming inability to make certain changes to transactions after the fact – especially in payroll but this could be due to my lack of product knowledge to date. I do think the QBO still offers more comprehensive reporting capabilities and at least for now (and I suspect it will continue), Intuit has been running a sale that (perpetually ends Friday) for 50% off of the QBO product. Users may need to Google it to find it, but I will bet the increased competition will keep prices in line like that for the foreseeable future. Of course, that’s only a guess. Thanks for your excellent work.

                                                                                                                                                                                            Katherine Miller

                                                                                                                                                                                            Hi Eric,

                                                                                                                                                                                            Thanks! You make a good point: it’s always a good idea to shop for sales, because Intuit especially tends to run them. It’s worth noting, however, that such sales only cover a limited number of months–after that, the subscription reverts to full price. The sale Intuit’s running now (at least the last one I saw posted) is 30% off Essentials, 40% off Plus, or 50% off Essentials or Plus with Payroll. Xero also has one running, for that matter: 30% off all products. All of these cover the first 6 months of the subscription.

                                                                                                                                                                                            Also, all potential buyers should be aware that if you buy either software through the sales, you don’t get the free trial period. I generally recommend trying out the software first (using a demo company if you like) before committing to the purchase. (Another thing to consider: getting 1 month free is equal to getting 3 months at 33.33% off. So while the sales can save you a bit, they often aren’t as impressive as they look at first.)


                                                                                                                                                                                              Michael hardy

                                                                                                                                                                                              forgot to ask for follow up email!

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