Where Each Originates
Xero was founded in 2006 in New Zealand and has established itself as one of the leading accounting tools in the market. It manages to make accounting sleek and enjoyable, offering a user-friendly, simple, and powerful experience. Xero's accounting tools are designed to help their customers succeed in their own businesses.
One of the impressive aspects of Xero is its average subscriber lifetime of 8.9 years, as mentioned in their investor presentation. Xero focuses strongly on cash flow management.
Xero competes strongly with QuickBooks Online by offering a compelling value proposition. Despite having fewer reviews, Xero consistently receives stronger average reviews than QuickBooks Online, as indicated by G2. With its youthful brand image and focus on clean usability, Xero is particularly popular in the SMB world compared to QuickBooks.
QuickBooks Online, the market-leading accounting software from Intuit, offers an "All in One Business Solution". It was first introduced in 2001.
QuickBooks has been in the market longer than Xero and is highly developed. It is widely loved by accountants, especially in the US where QuickBooks Online has dominated the market, holding an estimated 80% market share. Unfortunately, we couldn't find any public information online about the average subscriber lifetime.
QuickBooks Online places a strong emphasis on tax savings and tax calculation, which was enhanced through its acquisition of TurboTax by Intuit. In the Intuit investor presentation, the company puts a strong focus on AI, stating "AI is the fuel for innovation, customer benefit."
What Kinds of Businesses Benefit from Each
QuickBooks Online is rated 4.3 out of 5 on Capterra by 6419 users, while Xero has an average of 4.4 from 2831 users.
Feature comparison of Xero vs. QuickBooks Online
QuickBooks is an ideal choice for small businesses that require a user-friendly and affordable accounting solution. It offers a wide range of features, including invoicing, expense tracking, and financial reporting. With its extensive integrations and vast user community, QuickBooks provides SMBs with a scalable solution to manage their financial operations.
Xero, on the other hand, targets SMBs that prioritize collaboration and real-time financial insights. Its cloud-based platform allows businesses to access their financial data from anywhere, making it suitable for remote teams or businesses with multiple locations. Xero also offers advanced features like inventory management and project tracking, making it a comprehensive ERP solution for growing businesses.
QuickBooks Online is rated 4.3 out of 5 on Capterra by 6419 users, while Xero has an average of 4.4 from 2831 users.
Both QuickBooks and Xero are easy to set up and offer a huge range of banking integrations for many regions.
2. Operational Aspects
Both softwares have very extended reporting features: from standard report like Balance Sheet, Profit and Loss report to more sophisticated reports such as avanced analytics report at Xero: Business Snapshort or Business Cash flow Reports or Business Snapshot at QBO.
Inventory
When it comes to QuickBooks Online (QBO), it also offers inventory management capabilities. This allows businesses to monitor their inventory, sales, and customer information. However, it's important to note that in order to track your inventory in QuickBooks Online Plus and Advanced, you will need to upgrade your subscription.
Integrations
For QuickBooks Online (QBO), while the exact number of integrations was not found in the search, it's known for having a substantial number of integrations as well, covering various business functionalities similar to Xero. Both platforms are renowned for their extensive ecosystem of integrations, making them highly adaptable to diverse business requirements.
Accountants’ Opinion
Accountants' opinions about Xero and QuickBooks Online (QBO) highlight various strengths and limitations of each platform.
QuickBooks Online:
Xero:
Segmentation
Both QBO and Xero serve small to medium-sized businesses across a range of industries. QuickBooks Online has a stronger presence in the US market and is known for its comprehensive feature set, while Xero is recognized for its global reach, user-friendly interface, and strong collaborative tools.
Pricing
The pricing structures of Xero and QuickBooks Online (QBO) differ in a few key aspects:
Tiered Plans: Xero typically offers three main plans - Early, Growing, and Established.
Cost: The cost of Xero plans tends to be lower compared to QBO, with the entry-level plan being more affordable.
Unlimited Users: One of the distinguishing features of Xero’s pricing is that all plans come with unlimited user access, which is particularly beneficial for businesses that need multiple people accessing the accounting software.
Tiered Plans: QBO also offers several tiered options - Simple Start, Essentials, Plus, and Advanced.
Cost: QBO plans are generally more expensive than Xero's. The higher-tier plans, offering more advanced features, come at a higher cost.
User Limitations: Unlike Xero, the number of users allowed in QBO plans is limited and varies depending on the plan chosen.
When to Choose One Versus the Other
However, if you value flexibility, you ran your business globally , you need real-time collaboration, and scalability, Xero may be the better option. Its cloud-based nature allows for seamless integration with other business tools, and its intuitive interface makes financial management a breeze. Many users find Xero more enjoyable to use and love its easy-to-use and sleek interface, they value Xero’s minimalistic design. Accountants praise Xero's automatic bank feeds and usability. When it comes to doing your tax return at the end of the year, they have everything they need to get going. It's also easy for accountants to fix user errors in Xero, and there are built-in proper audit trails and safety checks.