Xero vs QuickBooks: Which Is Best for Your Business?

QuickBooks is a slightly better accounting software platform than Xero, although both offer advanced tools, making them some of the best accounting software platforms for small businesses.

The main reason QuickBooks beats Xero is that it’s easier to use, while offering similar reporting and financial planning tools. QuickBooks offers slightly better tools for financial forecasting, making it a better option for businesses planning future growth.

That said, Xero offers detailed invoicing and expense management which, paired with its robust inventory management tools, makes it a great choice for established businesses with a steady stream of sales.

Xero vs QuickBooks: At a Glance

Here’s what you need to know about Xero and QuickBooks:

• Accounting features: Xero and QuickBooks both have a solid set of accounting features, with different strengths and weaknesses. QuickBooks has a slight edge when it comes to invoicing and financial planning tools, while Xero is better for expense and inventory management.
• Ease of use: QuickBooks is easier to use than Xero because its platform has a more intuitive layout, while Xero’s menu is very vague.
• Pricing: Both providers have almost identical pricing, but QuickBooks is cheaper overall than Xero because it doesn’t charge additional fees for paying bills and submitting CIS returns.
• Customer support: QuickBooks offers slightly better customer support than Xero because it lets customers speak to an agent via live chat, while Xero only allows customers a request to be contacted.

Xero vs QuickBooks: Accounting Features

Winner: It’s a tie

Xero and QuickBooks have different strengths, but overall offer the same level of advanced accounting tools. We’ll look at their differences in more detail below:

Invoicing and quoting: QuickBooks has a slight edge

Xero and QuickBooks have very similar invoicing and quoting features, including:

• Direct from platform quote and invoice sending and creation
• Automated sending and payment reminders for clients
• Notifications for when clients have viewed invoices
• Multi-currency invoicing
• Integration with banks and payment processors, plus the ability to accept payment via payment links or BACS transfers

What gives QuickBooks an edge over Xero is the price at which specific features are available. For example, Xero limits invoice and quote sending to just 20 per month on its cheapest £16 per month Ignite plan, while QuickBooks offers unlimited invoice and quote sending from its £10 per month Sole Trader plan.

Additionally, multi-currency invoicing is only available with Xero from its £47 per month Comprehensive plan, while QuickBooks offers this from its £33 per month Essentials plan.

From a usability standpoint, we also found creating invoices and quotes easier on QuickBooks compared to Xero. This was mainly due to the clear layout of QuickBooks’ invoices, with key fields neatly aligned.

With Xero, although creating invoices and quotes wasn’t hard, it did require a bit more searching and scrolling, since key fields were quite dispersed.

Expense management: Xero offers more automation

Both Xero and QuickBooks allow expenses to be recorded and categorised via manual entry, receipt data capture, and bank feed. This last method allows for a high degree of automation and accuracy since most banks automatically categorise transactions based on the seller.

What gives Xero a slight edge over QuickBooks is that it can automatically calculate the total cost of petrol based on pence per mile when submitting a mileage expense, something QuickBooks doesn’t do. This level of automation helps reduce human error and is helpful for businesses that drive as part of their business model.

Other than that, expense tools are quite similar. Both platforms also have a large number of pre-existing categories that expenses can be sorted into, allowing for highly detailed records.

When it comes to who can submit expense claims, both QuickBooks and Xero allow employees to self-submit, since both providers allow for multiple users. QuickBooks does allow for more users, since its most expensive plan has a 25-user limit, compared to Xero’s 10, but Xero also lets businesses pay an extra £2.50 per month for additional users, something QuickBooks doesn’t offer.

For more information, read our guide to tracking business expenses.

Tax preparation: It’s a tie

Xero and QuickBooks are more or less tied when it comes to tax preparation features, with both platforms having different weaknesses.

Like most accounting software platforms, both Xero and QuickBooks can calculate and deduct VAT, and are part of the Making Tax Digital (MTD) initiative, meaning businesses can file VAT returns to HMRC via an online portal.

Both platforms also support CIS (Construction Industry Scheme) tax calculations and returns, which is a vital tool for businesses in the construction industry. Xero does charge a £5 per month fee per CIS submission, however, while QuickBooks doesn’t.

That said, working with tax is a little trickier on QuickBooks compared to Xero. During testing, we found that tax rules have to be set up in advance on a separate settings page with QuickBooks, whereas you get access to preset tax calculations with Xero.

Reporting and financial forecasting: QuickBooks offers more forecasting tools

Both Xero and QuickBooks offer advanced reporting and analysis tools, but QuickBooks offers better financial forecasting tools.

When it comes to reporting, both platforms allow businesses to create custom reports from scratch, as well as modify existing reports, allowing them to isolate data metrics. Both providers also offer a wide range of pre-built report templates for key financial statements, such as income statements, cash flow statements, and balance sheets.

We were also particularly impressed by QuickBooks’ data dashboard since we felt it did a great job of summarising key metrics in easy-to-read graphs. Although Xero had a similar dashboard, it wasn’t quite as nice to look at as QuickBooks’.

The two platforms differ the most is when it comes to financial planning tools.

Both Xero and QuickBooks offer a range of advanced tools, including cash flow projection (we found Xero’s feature particularly easy to use), upcoming bills and expenses tracking, and budget setting for projects and departments.

However, on top of this, QuickBooks offers user alerts for potential shortfalls or surpluses, as well as a “what-if” scenario creator to evaluate potential financial outcomes. Xero doesn’t offer these tools.

Inventory management: Xero offers more tools for tracking value

Xero offers more tools for tracking inventory than QuickBooks, which is why we recommend it to businesses with a long-term client list.

While both platforms can track inventory levels in real-time, Xero can also calculate and update asset values, accounting for depreciation or amortisation over time. This comes in handy for businesses dealing with large amounts of stock and looking to plan their finances around it.

Additionally, although both platforms allow for fixed asset tracking, you can only do this on QuickBooks’ most expensive plan, the £115 per month Advanced plan. On Xero, you can do this from the £47 per month Comprehensive plan.

Xero vs QuickBooks: Ease of Use

Winner: QuickBooks

QuickBooks was easier to use overall than Xero, although both platforms have their quirks, so neither excels when it comes to usability.

Part of what made Xero challenging to use was its poorly designed menu since most key tools were hidden in dropdown menu tabs with very vague titles like “Tools”. Design issues carried over to invoice creation.

Even though we appreciated the level of detail we could assign to invoices and expenses, we found the order of data fields was confusing, since extraneous fields like “unique IDs” separated crucial fields detailing cost and addresses, which led to a lot of scrolling.

That said, Xero still impressed us with its expense tool, since it was one of the few platforms that could calculate the cost of petrol based on mileage, and allowed us to link an expense to a specific client. Xero’s reporting tools were also quite easy to use while still offering advanced insights.

QuickBooks’ quotes and invoices had a much better layout than Xero’s and we appreciated being shown previews before sending off an invoice to a client. We also found the overall layout of QuickBooks’ menu to be much clearer than Xero’s, and we liked that we could customise it by adding tabs that linked to the most used tools. Like Xero, QuickBooks also had an excellent data dashboard that summarised key metrics in easy-to-interpret graphs.

That said, using QuickBooks wasn’t always a walk in the park. For example, we found the process of adding tax to a sale very complicated, since there was no obvious way to do this from the invoice we were working on. We had to go into a separate settings page to do this, and the help centre didn’t offer instructions to help us along. We had the same issue when it came to setting up payment reminders for clients.

For easier-to-use alternatives, we recommend you check out our picks for the best basic accounting software systems.

Xero vs QuickBooks: Pricing

Winner: QuickBooks

Xero and QuickBooks are similar in price, but QuickBooks is slightly cheaper overall, since Xero has hidden fees.

Here’s a summary of Xero’s pricing plans:

Here’s a summary of QuickBooks’ pricing plans:

Xero and QuickBooks are on almost even footing when it comes to price, since both providers have three plans at the same price points – £16, £33, and £47 per month.

While QuickBooks has the cheapest starting plan at £10 per month, compared with Xero’s £16 per month, it has the highest overall price with its most expensive plan, which costs £115 per month, compared with Xero’s £59 per month maximum.

That said, Xero charges extra for a few necessary features, bumping up the overall price businesses will pay. All Xero plans come with a set number of bills businesses can pay for free. After that, it charges a fee of £0.20 per bill. On top of this, Xero charges £5 per month for CIS returns.

There’s no extra charge for either of these tools with QuickBooks, making it cost less for businesses to use.

Xero vs QuickBooks: Customer Support

Winner: QuickBooks

QuickBooks offers better customer support than Xero, mainly because it’s easier to receive live support with QuickBooks than it is with Xero.

Xero makes it difficult for customers to get in contact with support agents, since it doesn’t have a dedicated support phone number, email address, or even a live chat line. In order to get support, customers have to submit a support request via the Xero Central portal. This could result in a call or message from a member of the support team, but it won’t be at the customer’s convenience, even if Xero claims its team operates 24/7.

QuickBooks has a similar policy for its phone line – customers have to request a call. However, customers can get live support via a live chat that operates between 8am and 10pm, Monday to Friday, and 8am to 6pm on Saturday and Sunday. Phone agents operate between 8am and 7pm, Monday to Friday. Like Xero, QuickBooks doesn’t offer email support.

Both providers also offer well-stocked knowledge centres and forums which serve as self-help tools. In the case of Xero, these are the main support lines, since live support isn’t readily available. Luckily, Xero’s help centre is comprehensive with clear, up-to-date guides.

Alternatives to Consider

If you think neither Xero nor QuickBooks is right for you, here are some alternatives to consider:

• Zoho Books: If you like QuickBooks and Xero’s powerful reporting tools but want an accounting platform that’s very easy to use, Zoho Books is a great choice, especially for businesses that need strong inventory management.
• Sage: If you want to maintain a strong brand image with highly customised invoices, Sage is a good choice. The software also has the added bonus of integrating with Sage’s payroll and HR ecosystem.
• FreeAgent: If you’re looking for highly affordable accounting software that’s easy to use and still comes with an excellent set of tools, we recommend FreeAgent.
• Clear Books: If you need an accounting tool that can support a wide variety of tax types and offers a lot of guidance come tax time, we recommend Clear Books.

For more comparisons, check out our Xero vs FreshBooks review.