When choosing a cloud-based accounting software for your business, it can be very easy to go for whatever is on the top of the ‘best of’ list. In this case, Xero and QuickBooks are two of the most comprehensive accounting tools offering essential features needed for a business to run smoothly. How do you choose one, and how do you decide which one is best for you when there are so many features? We’ll start with the basics before we go into some in-depth analysis…
Here’s what we can be sure about for both platforms:
● Custom permissions are available for all users
● They both use data encryption, redundancy, and physical security measures
● They both offer most of the essential accounting features needed for a business
● Both are user-friendly, streamlined, and cloud-based
Now, let’s dive deeper into each one. First under the spotlight: Xero
First launched in New Zealand in 2006, Xero now has 2.7 million subscribers across the UK, Australia and New Zealand. Alongside QuickBooks, when researching for the best cloud-based accounting software, you will be sure to find Xero in the top two.
Pro: Integrations available with 800+ 3rd party apps
Whilst QuickBooks also offers integration options, it’s very hard to compare to Xero’s wide variety. The options available cover various categories and industries, allowing businesses to manage any process imaginable within the accounting software. Xero also has a partnership with Gusto Payroll – a direct and full-service payroll integration. The integration possibilities are truly endless, and Xero clearly takes the leading spot if integrations are important and used within your business.
Pro: Unlimited Users
No matter which plan you choose, Xero will always provide access for an unlimited number of users. With 24/7 online support, it is clear that Xero has the capacity to cater for a large team. With the ability to set custom permissions for each user, as a business owner, you are able to tailor the software to your team’s needs. This differs from QuickBooks, as they only support 25 users on the Advanced Plan – the most expensive tier.
Con: Limited invoice services
This is where it comes to the wire. Though QuickBooks limits the number of users to 25, all plans support an unlimited number of invoices. In Xero’s starter plan which is recommended for self-employed business owners or start-ups, there are only 20 invoices allowed per month. This is obviously a brilliantly affordable option depending on how many invoices you send a month, but if your business mission calls for more than that, you may have to consider using QuickBooks as an alternative.
Next up…QuickBooks:
Launched in 2001, there is no doubt that QuickBooks is a well-known name in the selection of accounting software. Over 4.5 million businesses use the platform for its advanced accounting features – and this just may be where QuickBooks takes the edge over Xero. Both have their strengths and weaknesses, but here’s a closer look into the pros and cons you may find through using QuickBooks…
Pro: Excellent scalability
If you are looking for a software that will grow with you, QuickBooks may be your best choice. With customisable reporting capabilities, business owners are able to run in-depth reports as they learn more about accounting. With QuickBooks’ four plan tiers, there is huge capacity for growth and potential as your business develops.
Pro: Tax tools
Whilst Xero includes sales tax software within all their plans, they do not offer the same level of support as QuickBooks. All four of the QuickBooks plans include the ability to manage sales tax. There are many tools to utilise as a business owner, including tax categories and planning quarterly taxes ahead of time. You can even share and export relevant tax information straight to your accountant.
Con: Limited customer support
For QuickBooks, customer support is only available at the following times –
Monday-Friday (6am-6pm)
Saturday (6am-3pm)
In comparison to Xero’s 24/7 support, QuickBooks seems to lack. If you ever come across an issue with your accounting software (an extremely important facet of business), you can imagine that you would like to receive support as quickly as possible.
How do you decide?
It goes without saying that both software are in the top two spots. Either one will allow you to streamline your accounting processes and they will give you the essential tools you need to do your job efficiently and effectively.
Whether one is better than the other? It completely depends on your business. You budget is extremely important, alongside which features and capabilities are most important to you and your business.
Whilst Xero may be the cheaper option, you may risk losing important features for the price. It completely depends on your priorities. An example would be that, for usability and all-in-one accounting and lending, QuickBooks is the most reliably reviewed. But on the other hand, Xero supports an unlimited number of users with incredible features and integrations, but at the cost of a steep learning curve.
Choosing an accounting software that is the right fit for you is no easy choice, but there’s something out there for everyone. Thankfully, both software offers 30 day free trials and there are a range of reviews available online. Find what works for you and see where it can take you!