Xero or Quickbooks?

So you’ve made the decision to move from a desktop accounting application to the cloud. The next question is, which vendor will you choose? There are many worthy choices out there that will serve most businesses. However, we’re looking for the most optimized solution and there are certain factors that need to be considered. QuickBooks Online is the most widely used and recognized player in the industry.

Our firm reviewed QuickBooks Online and Xero, another major player in the could accounting space.  After reviewing both QuickBooks Online and Xero, we settled on Xero for these four reasons.

1. Data Connections – Xero has more than 700 connections to other accounting or operational applications. Why is this important? When you talk about customizing your system to meet your needs, you need to use several different apps as one unified system to get the most benefits from your cloud accounting. While QuickBooks has many connections as well, our experience is they seem to prefer you to use their apps. In our opinion, Xero tends to be more open to outside non-Xero apps than QuickBooks does, which allows you the freedom to choose the best apps for your business regardless of who the vendor is.
2. Imports – both applications allow for excel imports of data into their systems. However, Xero gives you more default options than QuickBooks. While both have applications that can connect to further optimize the import function, the more import functions you have without paying for an option, the better off you’ll be.
3. Price – there is a large gap in the pricing of the two systems. Xero is much more cost effective in our view than QuickBooks. Most users can get all they need from the middle tier option called “Growing” for $30 per month, which also includes a great document storage app called Hubdoc at no additional charge. Only 3 features from their entire platform are not included, most of which are not necessary for the typical small business. QuickBooks’s non-promotional pricing is much higher than Xero and you must keep moving up the plan list to get more and more features with Quickbooks.
4. Unlimited Users – Xero has unlimited users and QuickBooks does not. You have to keep moving up the plans to get more users with QuickBooks.

We did receive a recommendation from a fellow colleague that had used both products and highly recommended Xero. This, along with the reasons above, were enough for us to make the move to Xero. After 18+ months of use, we are extremely happy with our decision. As of this writing, we have 18 clients on Xero.

While our preference is to use Xero whenever possible, there are circumstances when choosing Quickbooks Online would make more sense. If you are using an industry specific software that only connects to Quickbooks Online and does not connect to Xero, it would be worth considering Quickbooks Online.

In addition, some industries may require their own specialized software built for their specific needs. We specialize in serving the interior design industry and we prefer to use Studio Designer for all of our design clients. At the end of the day, you want an automated system with applications that sync seamlessly to streamline your accounting processes, but also matches the process flow of your business.