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QuickBooks Online and Xero are among the most popular accounting software choices for small businesses. Learn more about how they compare.
Accounting software helps business owners invoice customers, maintain cash flow, perform essential financial tracking, manage finances and much more. Robust accounting platforms even automate repetitive tasks, helping you save time and money.
QuickBooks Online and Xero are two of the best small business accounting software solutions, offering a wealth of features and functions to help you better manage your small business’s accounting and invoicing. We compared their features and pricing to help you choose the right accounting software for your business.
QuickBooks Online and Xero both help businesses easily send customer invoices, reconcile transactions and handle other accounting-related functions. They have distinct differences, however, that may make one or the other a more suitable option for your organization. Here’s an overview of how they compare.
Criteria | QuickBooks Online | Xero |
|---|---|---|
Starting prices | $20 per month | $20 per month |
Invoicing |
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Customer service |
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Mobile app |
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Third-party integrations | More than 750 | More than 1,000 |
QuickBooks Online is a great choice for small and medium-size businesses that need a reliable, feature-rich accounting solution. With a U.S. market share exceeding 80 percent, QuickBooks has been a proven leader in the space for more than two decades. Its widespread adoption means most accountants and bookkeepers are likely already familiar with its features and functionality. Like many of its competitors, QuickBooks Online offers powerful double-entry accounting and reporting features, along with a robust set of tools designed to help business owners efficiently and seamlessly manage their finances. Our comprehensive QuickBooks Online review delves deeper into what makes the platform a popular choice across industries and sectors.
Choosing between QuickBooks Desktop and QuickBooks Online is no longer much of a decision. Intuit has discontinued most QuickBooks Desktop products, leaving only Desktop Enterprise — starting at $1,922 per year— as the sole option for new U.S. subscribers.
Xero is an excellent option for new and growing businesses because of its straightforward interface and emphasis on simplifying accounting concepts for individuals who may be unfamiliar with financial jargon. Its tiered pricing structure includes a wide range of features at various levels and it doesn’t impose user limits, making it ideally suited to growing businesses that need more functionality as they scale. The affordable, cloud-based platform provides double-entry accounting and comprehensive reporting functionalities. Our detailed review of Xero explains more about its unique features, including time tracking.
Xero’s interface is free of jargon and clutter, making it easy to see and understand your business finances. Source: Xero
Xero is considered a top QuickBooks alternative that may suit the budgets and needs of many small businesses.
Here’s how QuickBooks Online and Xero compare in pricing, support and essential accounting software features, including invoicing, mobile functionality and third-party integrations.
Price is an essential consideration for any organization investing in accounting software.
QuickBooks Online Pricing
QuickBooks Online has five paid plans geared toward solopreneurs and small and midsize businesses.
Plan | Price | Features |
|---|---|---|
Solopreneur | $20 per month |
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Simple Start | $38 per month (one user) | Everything in Solopreneur, plus:
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Essentials | $75 per month (up to three users) | Everything in Simple Start, plus:
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Plus | $115 per month (up to five users) | Everything in Essentials, plus: |
Advanced | $275 per month (up to 25 users) | Everything in Plus, plus:
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Consider the following pricing information when evaluating QuickBooks Online:
Xero Pricing
Xero offers three paid plans based on the typical life cycle of a small business.
Plan | Price | Features |
|---|---|---|
Early | $20 per month |
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Growing | $47 per month | Everything in Early, plus:
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Established | $80 per month | Everything in Growing, plus:
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Additional pricing considerations include the following:
Pricing is never a straightforward comparison, because different accounting software providers emphasize different features. A business’s needs will dictate which platform is the best choice. We’re giving the edge to Xero in the pricing category, however, because of its robust entry-level plan, which provides impressive features for unlimited users. QuickBooks Online’s Solopreneur plan is the same price, but Xero has more features and removes user limitations, making it more scalable.
Many businesses hire an accountant to help maintain their financial health. Luckily, both QuickBooks Online and Xero allow you to invite your accountant to access your books, helping you maximize your accounting software’s potential.
Accounting software must include comprehensive invoicing features to help businesses avoid cash-flow problems.
QuickBooks Online
We were impressed by the invoicing features we evaluated in QuickBooks Online. They rank among the highest of all the accounting platforms we reviewed. Here are a few highlights:
QuickBooks Online allows you to invoice customers for partial payments. Source: Intuit
Xero
We found Xero’s invoicing tools to be highly capable. We particularly liked that the platform provides tools to customize your invoices with branding elements such as logos. Additional noteworthy features include:
Xero’s invoices are saved in the cloud, allowing you to make changes without resending. Source: Xero
Xero and QuickBooks Online include similar invoicing features, but we gave the edge to QuickBooks Online because it offers more invoicing capabilities at a lower price. We were impressed that all QuickBooks Online plans allow you to send unlimited invoices, while Xero’s Early plan limits you to 20 invoices per month. If you want unlimited invoices with Xero, you must upgrade to the $47-per-month Growing plan.
Both QuickBooks Online and Xero allow you to invoice for partial payments — a helpful tool for easing cash-flow management.
Businesses must be able to contact customer support through convenient channels at convenient times.
QuickBooks Online
Xero
QuickBooks Online and Xero offer similar customer-support options. Because of the difference in their Trustpilot scores, however, we awarded this category to Xero. Actual users express high levels of satisfaction with Xero’s customer service, while QuickBooks has garnered poor user feedback. We appreciate that QuickBooks offers direct phone support, but that alone isn’t enough to outweigh the number of customers who complain about long hold times and insufficient technical solutions.
A well-designed mobile app can save business owners time, allowing them to perform accounting tasks on the go.
QuickBooks Online
The QuickBooks Accounting app is rated 4.7 out of 5 on Apple’s App Store and 4.7 out of 5 on the Google Play store. Its features include:
QuickBooks also offers two stand-alone paid add-on apps: QuickBooks Time and QuickBooks Projects. The Time app is available with the Essentials plan and above, while the Projects app is available for Plus users.
QuickBooks Online’s feature-rich mobile app allows you to track your business’s finances from a smartphone. Source: Intuit
Xero
The Xero mobile app is rated 4.6 out of 5 on Apple’s App Store and 4.4 out of 5 on the Google Play store. Its features include the following:
Xero also offers two stand-alone apps — Xero Expenses and Xero Projects — for users on its Established plan. The apps allow you to capture photos for receipts, submit expense reports, track time, and attach billable expenses and time to individual projects.
Xero’s mobile app helps you track cash flow, view sales and profits, manage expenses, and create invoices. Source: Xero
QuickBooks Online and Xero both offer robust mobile apps to help you run your business from a smartphone. The main apps garner similar ratings on the Apple and Google app stores, but there are key differences in their supplemental apps. Xero Expenses and Xero Projects are available only on the $80-per-month Established plan, while QuickBooks Time and QuickBooks Projects can be accessed on the $65-per-month Essentials plan and the $99-per-month Plus plan.
Overall, we give QuickBooks Online the edge because its primary app includes more accounting and invoicing features.
An accounting platform’s available integrations can be a game-changer for a business that must connect its finances to essential business software.
QuickBooks Online
QuickBooks integrates with 800 third-party business applications, including many well-known productivity apps and e-commerce platforms, such as:
Xero
Xero integrates with over 1,000 third-party business applications, including many apps that are popular with small business owners:
QuickBooks Online has over 750 third-party integrations, but Xero’s compatibility with over 1,000 third-party apps makes it the winner in this category. We believe startups and growing businesses will find Xero’s ability to sync with well-known apps particularly useful. Both platforms share some integrations, but each also supports unique apps that may better suit your business needs.
To increase productivity in your organization, list the essential business software that must work with your accounting software and then check for compatibility with Xero and QuickBooks Online.
Xero is a solid choice for startups and newer small businesses seeking a cost-effective accounting solution — especially those with only a few invoices and bills to manage. The Early plan is only $20 per month, and the company often offers special deals that can make it even more affordable. Plus, you’ll get unlimited users and access to hundreds of integrations, no matter which plan you choose.
Since QuickBooks Online offers more features but comes with a higher price tag, it makes the most sense for small businesses that are past the startup stage and focused on growth. With QuickBooks Online, you can expect more customization options and a feature-packed mobile app that allows you to enter bill payments, record transactions and more. You’ll also benefit from multiple customer-support options, which are particularly important if you’re managing many invoices and bills.
Yes. All QuickBooks plans allow you to invite an accountant to review your books, correct errors and collaborate on financial decisions.
Smart Reporting, powered by Fathom, provides tools to analyze your business metrics. The feature is included with the Advanced subscription plan.
The Hubdoc service lets you capture, extract and store data from documents scanned using your smartphone. Hubdoc is included with all Xero plans.
Yes. Both platforms are equipped with a fixed-asset manager that can help you monitor fixed assets and quickly calculate depreciation. You’ll need to upgrade to a higher QuickBooks Online tier to access the feature, while it comes standard with all Xero plans.
Xero is cheaper than QuickBooks. Its base plan starts at $20 per month. The QuickBooks Online Solopreneur plan is also $20, but you’d need to upgrade to the $38-per-month Simple Start plan to access comparable features.
Anna Baluch contributed to this article.
