Published November 27, 2021 by WC Team

Xero vs QuickBooks Online: How They Compare in 2021

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The Ultimate Guide To Choosing Between Xero vs QuickBooks Online

Looking for the perfect business accounting software for your business can be extremely difficult. The options are endless as each comes with its own unique set of features at various different prices. 

During your searches you've probably stumbled upon the two very popular accounting softwares –Xero and QuickBooks Online. Both of them have several similarities as they are both web-based accounting softwares, known for their range of features, ease of use, and flexibility.

This brings us to the question of which platform is the best for you and your business. First, we'll give you a quick overview of the comparison between the two. Going through the price range, features as well as their strengths and weaknesses.

QuickBooks Online vs Xero: Overview

Xero and QuickBooks Online are the two most popular accounting software options available in the market and they have some similarities. For example, they are web-based platforms. This means that you can access your account as long as you have the internet and they have a mobile app for you to use it on-the-go and many third-party integrations for you to use. They also offer a variety of plans, which you can choose from depending on what features you want and how many users you have. 


If you’re looking for a simple-to-use software but with more multifaceted features then maybe you should try Xero.

Xero’s most notable features are:

QuickBooks Online

Regarded as one of the best accounting software programs available on the market they offer a huge range of features for you to use. They offer 4 plans:

  1. QuickBooks Online Simple Start – the most basic plan starting at $25 per month. And you will get:
    • Transaction imports from your bank and other banking apps and accounts
    • Auto-sorting transactions into tax categories
    • Organize your expenses into tax categories
    • Accepts cards and bank transfers
    • Track Invoices
  2. QuickBooks Online Essentials – This plan includes all the features of Simple Start and the additional features given below. This plan is $50 per month.
    • Up to 3 users
    • Record payments and manage bills and their status
    • Make recurring payments
    • Track billable hours and employee time
    • Pay multiple vendors
    • Integration with TSheets
  3. QuickBooks Online Plus – This will cost you $80 per month and it offers all the features from the previous 2 editions as well as:
    • 5 Users
    • Profitability tracking
    • Job costing, payroll, and labor costs tracking
    • Inventory tracking
    • Sync with eCommerce tools
  4. QuickBooks Online Advanced – The most expensive plan but also the one with the most functions. It will cost $180 per month and in return you will receive the previous features plus:
    • 25 users
    • Smart reporting
    • Custom fields
    • Priority customer support

Check out a more detailed comparison on their website.

Xero vs QuickBooks Online: Deep Dive Feature Comparison

Since we now know what both platforms offer let's look at their capabilities more closely and see how they compare to one another. We will compare Xero and QuickBooks online in terms of 2 significant features including Reporting and Costs. 

QuickBooks Online vs Xero: Reporting

Reporting is considered one of the most crucial accounting software features to help inform you about your business's growth and financial planning. So, when you compare Xero and Quickbooks Online make sure you choose the software that fits all your accounting needs.

Report Customization

QuickBooks online has more to offer in terms of customizing reports as compared to Xero. For example, you can use QuickBooks Online to generate a monthly profit and loss statement. All you have to do is run the report for the date range you want. To do this in Xero you'd have to run the report for the last month and then compare it to the previous months.

So, in terms of report customization QuickBooks takes the win over Xero.

Cash Flow Statements

There are two ways to generate a cash flow statement including the direct and indirect methods. You minus your expenses from your earnings through the direct method. And while using the indirect method you can use your net income in depreciation to estimate your operating cash flow. Xero only uses the direct method whereas QuickBooks online uses both.

AR/AP Reports 

The best choice would be QuickBooks Online For a more detailed report on accounts payable or receivable as it allows you this view while Xero doesn’t.

Report Layout

Xero’s report layout goes from the most recent to the oldest but this is the opposite of what they want for most business accountants. They would have to reverse the order and that is not so easy.

Quickbooks Online vs Xero: Costs

Both platforms are great options for small businesses but there are some differences price-wise. For example, Xero has slightly more affordable prices but lacks many features; while QuickBooks Online has many functionalities but is way more expensive.

Another factor to consider is that Xero offers unlimited users for all its plans while with QuickBooks you are limited depending on which plan you have. This may prove to make a difference if you need a larger number of users for your business.

You can also try applying for a small business loan to purchase an accounting software.

Xero Vs Quickbooks: Which Software Is Right For You?

As we have seen throughout our extensive comparison both softwares have significant capabilities on offer. But we have also seen some notable differences, including the cost, the features, expansion opportunity etc. So ultimately the software which is best for you depends on what you are looking for. If it is tax tools, plan options and time tracking then QuickBooks may be better. And in case you are looking for a large user allowance, customer support and integration options then Xero is the way to go.

The Bottom Line

Whether you choose QuickBooks or Xero, you will be able to manage your accounting processes efficiently. Choosing which is better is difficult because both have their strengths and weaknesses. So, it ultimately depends on what you are looking for in an accounting software and your budget.


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