QuickBooks Online vs. Xero: Which Is Better for Your Small Business?
When it comes to accounting software, QuickBooks Online and Xero are two of the most popular choices for small businesses. Each has its strengths and weaknesses, but which one stands out as the superior choice? In this post, we’ll compare these two platforms across five critical categories: user interface, speed of transaction entry, account reconciliation, cost, and overall rating. Let’s dive in!
User Interface
QuickBooks Online: 4/5
QuickBooks Online boasts a clean, intuitive user interface that’s easy for both novices and experienced users to navigate. The dashboard provides a comprehensive overview of your financials, including income, expenses, and profit and loss at a glance. The layout is straightforward, and the menus are logically organized, making it simple to find the features you need without getting lost.
Xero: 4/5
Xero also offers a user-friendly interface. While it’s visually appealing and modern, some users may find the navigation less straightforward, particularly when accessing advanced features. However, once you get the hang of it, Xero’s interface is quite functional and efficient.
Speed of Transaction Entry
QuickBooks Online: 4/5
QuickBooks Online excels in transaction entry speed. The platform’s automation features, such as bank feeds and rules for categorizing transactions, significantly reduce the time spent on manual data entry. Recurring transactions can be set up effortlessly, and the system quickly learns your preferences, making the process increasingly faster over time.
Xero: 4/5
Xero is also efficient in transaction entry, with robust bank feeds and automation features. However, some users report that the initial setup of bank feeds and rules can be more cumbersome compared to QuickBooks Online. Once set up, Xero performs well and offers a smooth experience, though it slightly lags behind QuickBooks Online in seamlessness.
Account Reconciliation
QuickBooks Online: 4/5
QuickBooks Online’s account reconciliation process is highly praised for its simplicity and accuracy. The platform automatically matches transactions from your bank feed with those in your records, making reconciliation quick and easy. Any discrepancies are highlighted, and the reconciliation tool is intuitive enough for users to resolve issues without hassle.
Xero: 3/5
Xero’s account reconciliation features are adequate but not as robust as those in QuickBooks Online. While Xero offers automatic transaction matching, the reconciliation process can be less user-friendly and more prone to errors. Users often report difficulties in identifying and resolving discrepancies, which can lead to confusion and mistakes in financial records. This can be particularly challenging for businesses with a high volume of transactions, where accuracy is critical.
Cost
QuickBooks Online: 3/5
QuickBooks Online offers a variety of pricing plans to suit different business needs. The basic plan starts at $25 per month, but the more advanced features come at higher price points, with the Plus plan at $80 per month and Advanced plan at $180 per month. While these prices are competitive for the features offered, they can add up, especially for small businesses needing multiple advanced features.
Xero: 4/5
Xero provides tiered pricing plans that are generally more affordable than QuickBooks Online. The Early plan starts at $13 per month, though it has limitations. The Growing plan is priced at $37 per month, and the Established plan is $70 per month. Xero’s pricing is slightly lower, offering good value for small businesses that do not require the most advanced features immediately. For businesses on a tighter budget, Xero’s more affordable plans can be a significant advantage.
Overall Rating
QuickBooks Online: 4/5
QuickBooks Online is a strong choice overall, with its intuitive user interface, rapid transaction entry, and reliable account reconciliation making it a favorite among small business owners and accountants. While its higher cost can be a drawback, the platform’s comprehensive features and strong support ecosystem make it a solid option for those looking to streamline their financial management.
Xero: 3/5
Xero is a competitive alternative, offering a solid user experience and reliable accounting tools at a slightly lower cost. However, it falls short of QuickBooks Online in terms of ease of use, transaction speed, and account reconciliation, which can lead to more confusion and errors. It remains a viable option for budget-conscious businesses that do not need the most advanced features.
Conclusion
Both QuickBooks Online and Xero are excellent accounting software options, but QuickBooks Online holds a slight edge in key areas that matter most to small businesses. Its superior user interface, faster transaction entry, and seamless account reconciliation make it the go-to choice for those looking to streamline their financial management. However, for businesses that are more budget-conscious and do not need the most advanced features, Xero offers a cost-effective alternative. If you’re in the market for accounting software, carefully consider your business’s specific needs to choose the platform that best fits your requirements.
If you are interested in moving forward with a purchase of Quickbooks Online or Xero we pricing below retail costs. Contact us for more information.