Xero vs Quickbooks: what’s the difference?

What is QuickBooks and how does it work?

When comparing Quickbooks and Xero, it's important to understand the differences and similarities between these accounting software packages

QuickBooks from Intuit launched in 1992 and has since undergone numerous updates and improvements.

This versatile accounting software is designed to help businesses manage their finances effortlessly. It features a range of tools for invoicing, expense tracking, payroll, and tax preparation. 

The software integrates with your bank accounts, credit cards, and other financial services, allowing you to import transactions automatically. You can also manually enter data, create customised invoices, and generate financial reports.

While QuickBooks Desktop was accessible offline, the company discontinued all Desktop services for UK customers in 2023.

Now, both QuickBooks and Xero are entirely cloud-based, offering flexibility and convenience, as users can access the systems online from their preferred devices. 

QuickBooks offers various pricing plans designed to suit different business sizes and operating requirements.

The Self-Employed plan starts at £10 a month, Simple Start at £14 per month, Essentials at £28 per month, Plus at £38 per month, and Advanced at £90 per month.

A 30-day free trial is available for those who want to test the software before committing and you can get big discounts on all of the above plans for the first six months, with a monthly fee from £1. 

QuickBooks Online can be accessed by both Windows and Mac users.

What is Xero and how does it work?

Founded in New Zealand in 2006, Xero is another robust accounting software that focuses on providing a user-friendly experience for small to medium-sized businesses

The software connects with your bank accounts to import transactions automatically and supports manual data entry. Xero offers features such as invoicing, expense management, payroll, and comprehensive financial reporting.

Xero's pricing plans include the Starter plan at £15 per month, Standard at £30 per month, Premium at £42 per month, and Ultimate at £55.

Similar to QuickBooks, Xero offers a 30-day free trial to let users explore its features before deciding and offers big discounts for the first six months.

Xero is also suitable for Mac or Windows users.

What are the key differences between QuickBooks and Xero?

In understanding the difference between Xero and QuickBooks, there are several points to consider:

• QuickBooks is known for its straightforward interface, which can be easier for beginners.
• Xero has a more modern and visually appealing design but may require a learning curve.
• Xero is praised for its automation capabilities, especially in terms of bank reconciliation.
• QuickBooks offers automation but tends to require more manual input.
• QuickBooks tends to be more expensive than Xero, especially for higher-tier plans.
• Both offer many third-party integrations, but Xero has a larger selection of apps.

What are the pros and cons of QuickBooks?

QuickBooks has many pros and cons worth considering.

It can be used by Windows and Mac users and is suitable for small to large businesses, but the cost might be high for small enterprises, especially for the higher-tier plans.

Despite this, QuickBooks can be useful for individuals managing personal finances or freelancers due to its easy invoicing and expense tracking features.

The advantages of using QuickBooks

• It offers an intuitive and easy-to-navigate interface.
• You can get daily phone support and 24/7 chat support with all plans.

The disadvantages of using QuickBooks

• It can be more expensive, especially for businesses needing advanced features.
• The software may lack more complex, business-related features.

What are the pros and cons of Xero?

Xero also has its advantages and disadvantages.

Being cloud-based, Xero works equally well on Mac and Windows systems. It is generally more budget-friendly, with competitive pricing plans and features that offer good value for money.

Xero's automation features and scalability make it a strong choice for small to medium-sized businesses, although it can also work well for larger enterprises.

The advantages of using Xero

• The software excels in automating financial processes.
• The simple layout is approachable for business owners new to accounting basics. 

The disadvantages of using Xero

• New users might initially find Xero's interface more complex.
• There is no live chat support. 

Xero vs QuickBooks: which is better?

When choosing between QuickBooks and Xero, the decision depends largely on your specific needs.

QuickBooks might be better suited for those prioritising ease of use and extensive integration options. On the other hand, Xero is ideal for those who value automation and a cost-effective solution. 

Xero vs QuickBooks vs Sage: how does Sage compare?

Sage is another trusted accounting software supplier. Known for its strong financial management tools, Sage is often favoured by larger enterprises or businesses with more complex accounting needs.

Sage's pricing varies significantly based on the required package and features, making it less straightforward than QuickBooks or Xero.

Sage also offers a free trial, allowing potential users to explore its features before purchasing.

When comparing Xero, QuickBooks and Sage, Sage stands out with its robust features tailored for larger enterprises and complex accounting needs.

It can also handle large volumes of data and support multiple users concurrently.

Sage may be the most suitable choice for companies with complex accounting requirements, such as multinational operations or specific regulatory compliance needs. 

Seek expert financial advice

Choosing between QuickBooks and Xero depends on your business's specific requirements. 

QuickBooks excels in user-friendliness and customer support, making it ideal for a wide range of businesses.

Xero stands out with its automation capabilities and simple layout. Ultimately, the decision should be based on your company's size, needs, and the level of financial complexity you need to manage effectively.

Unbiased can match you with a qualified accountant to ensure you receive expert guidance tailored to your business's financial requirements.