Are you looking for innovative cloud-based accounting software for your thriving business? Although it might look as though the options are vast, there are two main front runners for you to focus your attention on. Xero and QuickBooks Online are certainly two of the best providers in the industry for a reason. With their clever functions for invoicing, banking and paying bills there are a handful of differences that set them apart. Check out the following features of both pieces of software and you will soon be able to discover which one is right for your business.
How Xero and QuickBooks Online Deal With Invoicing
As one of the basic, day to day activities for your business, you want invoicing features that are top class. There are a handful of differences which set Xero and QuickBooks apart from each other, but both of them offer attractive features such as, sending recurring invoices, sending late payment reminders, customized invoices and the ability to bill for hours worked.
Invoice Reminders as a Batch or Individually?
At a glance, both pieces of software seem to offer broadly the same thing in terms of invoices, but there are a few noticeable differences that should be mentioned. Although both programs can send automatic payment reminders for invoices, Xero’s reminder settings are applied to all customers. This means every client will be sent a reminder once seven days have passed the due date. However, in QuickBooks Online you are able to select individuals to send the reminder to. You might see one of these as an advantage over the other; either way one of these features will be more advantageous to your business.
Extra Costs for Inventory Features
Both Xero and QuickBooks Online can integrate with your current inventories, however, you will be charged extra for this function with QuickBooks. With Xero cloud accounting inventory tracking is included at every level of subscription so you don’t have to fork out for the added luxury.
Arguably, this is one of the most important aspects of your business. When deciding between QuickBooks Online or Xero, you might find it useful to know that QuickBooks has payment links integrated within the system. This means customers can simply click and enter their card information, however, you will be charged a fee for this. In order to process payments with Xero you will need to sign up with an external provider such as PayPal or Stripe. This gives you more options and saves money on fees, however it makes the payment process for customers slightly more complex.
These varying features might help you to decide which cloud accounting software to choose. In the case of invoicing it is a tie, as both programs offer advantageous features depending on your business set up.
Invoicing Winner? IT’S A TIE
Which is better at handling bills; Quickbooks Online or Xero?
Ideally, businesses would be collecting more money than they pay out, but bills are still an integral part of your day to day duties. Xero definitely shows more promising features in this domain, as the process is much more simple and streamlined.
Process of Paying Bills in Xero and QuickBooks
Paying your bills with Xero couldn’t be easier; all that needs to be done is a couple of clicks under ‘accounting’ and ‘bills’ in the purchasing tab. However, with QuickBooks Online you need to take a few more steps to get to this point.
Setting up Recurring Bills
With Xero there are a number of ways to set up a recurring bill. You just need to select the ‘repeating bill’ button in the accounts tab. This will automatically save the bills you input and you can select how often they recur. On the other hand QuickBooks cloud accounting software has a much lengthier process. This is done via the banking register, where you will need to find and select the last payment you made for to the vendor. Automating monthly payments when you are new to QuickBooks is also tricky, as the first payment needs to have been processed before you have this recurring option.
Keeping on Top of Bills
Staying on track with paying your bills with Xero couldn’t be simpler as the main dashboard has a ‘bills to pay’ section on the right hand side of the screen. QuickBooks has no such option so it isn’t quite as simple to see where you are up to with your bills.
If you are still debating QuickBooks Online or Xero, this might have made the decision for you. Xero is definitely superior when it comes to staying in the loop with your past, present and future bills.
Bills Winner? Xero
Is QuickBooks Online or Xero Better at Reports?
Having easy access to financial reports is essential for every business. Understanding trends in your profit and loss and seeing your cash flow clearly will help you to run a more financially stable business. Both programs allow you to display different time periods side by side and you can also add the necessary columns you need.
Xero gives you the option to view an equity statement, but QuickBooks Online does not. This is an incredibly useful tool if your business has several investors. This statement will show investments and equity draws, as well as profits and losses associated with the business.
Viewing Financial Statements
It has to be said that QuickBooks gives you a much deeper insight into your accounts than Xero does. With QuickBooks Online, you can find reports on profit and loss by customer and you can also compare estimates. This is very useful information for your business to be able to see.
QuickBooks Online only provides reports on total payroll taxes, wages and workers’ compensation, whereas Xero has many more reports with associated HR functions. This information includes the amount of time off, requests and wage details associated with each employee. If you are running a simple and straightforward business, you will certainly find all of the payroll features you need from Xero.
In terms of reports, it is a close race between QuickBooks Online and Xero, however, we believe Xero just takes the title. Ultimately, it depends on the size and makeup of your business, but Xero offers much more simple solutions.
Reports Winner? Xero
Does QuickBooks Online or Xero Offer a Better Pricing Package?
On the surface, both pieces of accounting cloud software offer tier based pricing, which means the lower the price, the fewer the features. However, when you look more closely Xero place a handful of restrictions on the lower level tier. QuickBooks Online, on the other hand, add access to certain software features as your business expands.
Main Pricing Differences – Lower Tier Plan
There is actually a considerable difference between the price points per month. At £5 per month you can access Xero’s starter plan, however, QuickBooks Online will set you back over double this amount at £6 per month for theirs. With Xero your access to the software will be quite limited; you will only be able to send five invoices and carry out twenty bank transactions at this level. With QuickBooks simple Start level you will be able to access invoicing, estimates and basic reports, but only one employee can access the software. Xero offers an unlimited amount of users which is a huge advantage considering how low the price point is.
Main Pricing Differences – Mid Tier Plan
The mid-tier plan for Xero is called ‘standard’ and costs £11 per month. This tier will give remove all of the usage restrictions in the lower tier. QuickBooks mid-tier starts at £9 and they will offer you bill payments, time tracking and allow three users for this increase in price.
Main Pricing Differences – Top Tier Plan
The premium plan by Xero is £13.75 per month, which allows you to add a number of currencies and track expenses. The clearly structured nature of Xero’s plans make them very easy to understand when you are first starting out. QuickBooks highest tier plan come out at £14 per month, even still this only allows five users. Both programs charge more for the payroll processing feature, which businesses can compare and contrast if they need to. Overall, the added extras will probably be the decider for businesses when comparing pricing between Xero or QuickBooks.
This rundown of pricing shows that both QuickBooks and Xero offer competitive tier pricing packages. The features they offer in each tier is quite wide-ranging, but there are advantages to both cloud accounting software in this case.
Here are examples of each oth their price plans;
Pricing Winner? IT’S A TIE
Our final verdict of which is best; Quickbooks Online or Xero?
After comparing both Xero and QuickBooks in detail it is clear that both accounting cloud programs have a lot to offer businesses. In our opinion Xero comes out as the frontrunner for the most part between the two pieces of software. It is a robust accounting solution that shows better capability and popularity than QuickBooks. It has to be said that both accounting programs are renowned by bookkeepers and accountants, so it really depends of what your business is looking for.
If you want further information on the benefits and features of these pieces of software, or you want to convert from QuickBooks to Xero, then get in touch.