Xero vs QuickBooks Online: Which Accounting Software is Best for Your Business?

Most small business owners hunting for cloud accounting software will find themselves trying to choose between the two most popular names: Xero and QuickBooks Online. These two giants in the small business accounting software space are equally adored in the business community.

Examining reviews of Xero vs QuickBooks Online can often lead to more confusion. Both are comprehensive tools that tick all the foundational boxes. So how do you know which accounting solution is actually better?

Online Accounting Software Basics

Accounting software is a must for businesses large and small. At its most basic level, these tools help you to track your earnings and expenses so that you can monitor cash flow, make accurate reports, analyze your financial data and optimize your efforts.

All of the accounting tools out there will meet that outline. It’s what they offer beyond that that helps you spot which is better for you.

If you’re a small mom-and-pop shop, your needs are going to differ significantly from a law office. The former will deal with purchase orders and ringing up sales at the register, while the latter will need capabilities related to invoicing and managing client records.

In reality, neither platform is necessarily better than the other. The stand-out platform will reveal itself only when assessed against your business needs. So let’s look at the platforms’ similarities and differences, what business needs they meet, and deduce which solution has the functionality you’ve been looking for.

Xero vs Quickbooks: The Overlaps

Both QuickBooks Online and Xero are cloud accounting platforms. This means that you can access either from anywhere you have internet, including your phone. If you’re in a cab and remember you need to track time, this can be done via an Android or iOS mobile app. Both solutions have this feature.

They also both boast a huge range of integration options via third-party tools, monthly subscription plans, and add-ons for customization to fit a wide range of business needs.

These similarities are what make them both front runners for flexibility and ease of use. Let’s look at their differences.

Xero Features, Pricing, Pros, and Cons

Xero is a business out of New Zealand that established itself in the accounting software space with the goal to make accounting tasks more user-friendly and even enjoyable.

Xero’s user-friendly interface has set the standard in the accounting software sphere. This ease of use makes the learning curve low for customers and adoption of the platform extremely high.


At any level, Xero offers a full range of accounting features, including:

  • Dashboard and reporting
  • Invoicing and quotes
  • Tracking receivables and payables
  • Purchase orders
  • Bank feeds
  • Bank reconciliation
  • Sales tax management
  • Inventory tracking and management
  • Fixed asset management
  • Contacts, smart lists, and file storage
  • Payment processor integration
  • Payroll via Gusto.


Xero can integrate with over 1,000 third-party platforms. There are far too many to mention here, but some of the most beneficial integrations include:

  • CRM systems
  • Time tracking tools
  • Reporting tools
  • Ecommerce platforms
  • Email marketing tools
  • Point-of-sale systems
  • Inventory management
  • Debtor tracking.


Xero offers three pricing plans: Early, Growing, and Established.

Xero Early

With Xero Early, you have access to all of the features above for only $9 per month. However, there are some usage limits:

  • You can only send 20 invoices and quotes
  • You can only enter five bills
  • You can’t reconcile bank transactions

Xero Growing

The Xero Growing plan will set you back $30 per month but gives you access to all the basics, plus unlimited invoices, quotes, bills, and you can reconcile bank transactions.

Xero Established

The Xero Established plan comes in at $60 per month and combines all of the Growing features plus:

  • Multi-currency
  • Project management
  • Expenses.

Xero’s Projects feature gives businesses the ability to track and bill for projects through the platform with features like time tracking, expense capture, and recording deposits against each project so that you can monitor the project’s performance. Billing is done directly from the project to keep project management and finance tightly connected.

Xero Expenses lets users—from mobile or desktop—track, assign, and manage business expenses, including capturing receipts, labeling expenses, and controlling permissions on who can view, submit, and approve them.


Unlimited users – One of the main ways Xero stands out against QuickBooks Online is in offering unlimited users. No matter which pricing plan you have on Xero, you can add an unlimited number of users to the account. That means your bookkeeper, accountant, tax advisor, and staff can all have access at no additional cost.

Integrations – Xero’s integration options are also superior to QuickBooks Online. Both offer a pretty significant number of integration options, but no accounting software comes close to Xero’s 1,000+ integration options.
Payroll – Companies in need of payroll will also find Xero the winner through its partnership with Gusto to give you full-service payroll integrations. The first two months with Gusto are free for Xero customers.

Customer support – Xero’s customer service is first class. Not only does it have an extensive resource portal online where customers can find answers to most questions, but it also offers free online support 24/7, regardless of plan level and timezone. All customer service employees are also Xero employees — no outsourced support.


Limited tax tools – Although Xero offers sales tax software, it doesn’t match QBO with the level of its tax tools. If you need tools to maximize tax deductions, manage 1099 payments, and create tax categories that can be auto-added to expenses, QBO may be a better option.

Limited time tracking – Xero only offers this feature on its highest plan, the Established tier. Comparatively, QBO offers time tracking at every plan level.

Customer ratings and reviews

“Xero is the best!” – 18th August 2021

Xero’s reviews are consistently strong, and it gets high customer ratings, such as:

  • 8.7 for ease of use
  • 8.1 for ease of setup.

Which Businesses Benefit from Xero Accounting Software?

Because of its interface, which is clean and easy to use, Xero has attracted a young market, particularly in the startup world. If you want a solution that has an extremely low learning curve, Xero is a great option.

Xero’s unlimited user offering is also a huge selling point for the platform. This feature makes it a strong solution for large and small businesses alike.

If you’re self-employed and don’t need to send more than 20 invoices a year, $9 per month is a great value. Similarly, if you’re a big business that requires 25 users or more, you’re going to save significantly with Xero.

Quickbooks Online Features, Pricing, Pros, and Cons

QuickBooks Online (QBO) is a platform from Intuit that was designed to help businesses streamline repetitive tasks and processes, particularly when it comes to managing bills, invoices, time, and projects.

In the market for longer than Xero, QBO got picked up by accountants early and has established itself as the platform of choice for the industry. When your accountant is using the tool, it’s extremely convenient to have the same software.


On any of the QBO plans, you can get access to:

  • Basic reporting
  • Income and expense tracking
  • Invoicing and estimates
  • Bank account connection and reconciliation
  • Tax organization tools
  • Accepting payments
  • Receipt capture and organization
  • Integration with QuickBooks apps and third-party platforms
  • Phone-based customer support.


The number of QBO integrations are too many to list here, but they cover the most beneficial, such as:

  • CRM systems
  • Time tracking tools
  • Reporting tools
  • Ecommerce platforms like Shopify
  • Email marketing tools
  • Point-of-sale tools
  • Inventory management
  • Debtor tracking.


QBO offers four different monthly subscription plans: Simple Start, Essentials, Plus, and Advanced.

QBO Simple Start

Simple Start costs $25 per month and covers all of the standard features above, as well as:

  • Importing transactions (from bank accounts, credit cards, PayPal Square, Stripe, and more)
  • Automatically sorts transactions into tax categories
  • Manual organization of income and expenses into tax categories
  • Accepting credit cards and bank transfers from invoices
  • Tracking invoice status
  • Send payment reminders
  • Automatically matching payments to invoices
  • Sales and sales tax tracking automatically on invoices
  • 1099 management and tracking.

QBO Essentials

The Essentials plan will set you back $50 per month and covers all of the above, as well as allowing you to:

  • Up to three users
  • Manage bills, track status, and record payments
  • Create recurring payments
  • Pay multiple vendors and bills simultaneously
  • Create checks from anywhere
  • Track employee time and billable hours
  • Automatically add time to invoices
  • Let employees enter their own time
  • Integrate with TSheets by QuickBooks.

QBO Plus

The Plus plan comes in at $80 per month, offering all the features we’ve discussed so far, plus:

  • Up to five users
  • Advanced reporting
  • Project profitability tracking
  • Purchase order creation
  • Vendor management
  • Job Costing to track labor costs, payroll, and expenses
  • Track inventory, goods costs, and low-stock notifications
  • Import inventory from Excel
  • Sync inventory with e-commerce tools
  • Create custom user permissions and assignments.

QBO Advanced

Finally, the Advanced plan, with a $180 per month price tag, offers all of the previously mentioned features and then some:

  • Up to 25 users
  • Accelerated invoicing
  • Smart reporting via Fathom
  • Enhanced custom fields for reports
  • QuickBooks priority care for premium customer support.


Plan Options – While QBO is more expensive for businesses that don’t need lots of functionality, it actually works out in providing better value for those who do. The QBO plans give businesses more options, and the structure of these plans considers the scale of businesses at each plan level.

Tax Tools – QBO trumps Xero with the power of its tax tools. While Xero has sales tax software, QBO has tools to maximize tax deductions, manage 1099 payments, and create tax categories that can be auto-added to expenses.

Time Tracking – QBO offers time tracking at every plan level, while Xero only offers it for the Established plan, the most costly pricing plan.


Limited Users – Even at the highest plan, QBO limits the number of users to 25. If you need to share access with many staff and outside financial support in bookkeeping and accounting, this is going to be a frustrating limitation.

Limited Customer Support – QBO does have phone support, but the hours are limited, so it’s actually not as flexible as Xero.

Customer Ratings and Reviews

“Solid platform for easy bookkeeping” – 24th August 2021

For the 2,600+ reviews QBO has, its average rating is 4 stars (out of 5) is still pretty good, with these ratings averaging:

  • 8.1 for ease of use
  • 7.9 for ease of setup.

Which Businesses Benefit from QBO Accounting Software?

QBO is really the more robust of the two accounting platforms, but it’s also the most costly. This means that it’s particularly suited to businesses that want to gain deeper insight into the logistics of their business as it grows.

The way the QBO plans scale up reporting capabilities at each level tends to match business needs at each growth stage, making it great for businesses that plan to scale.

QuickBooks vs Xero: Both Solid Solutions When it Comes to Accounting Software

QuickBooks and Xero are both strong contenders in the realm of small business accounting. The right solution depends on your (or your accountant’s) preferences and specific needs.

Regardless of which software you choose, know that Stax can easily connect with both. Our direct integration with QuickBooks enables you to connect your accounting software with Stax’s payments platform. If you’re using Xero, you can connect Stax through Zapier with just a few clicks.

If you need help sorting out your payments and accounting integrations, get in touch with the Stax team and we’ll help you figure out the right setup for your business.

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