Xero vs. QuickBooks Online Bookkeeping Software

Xero and QuickBooks Online offer similar features, but your business situation will determine which bookkeeping software is right for you. In this post we will compare these two platforms.

When to Use QuickBooks Online

If you need to give a lot of users access to your bookkeeping data, choose Xero because it allows unlimited users. However, if you prefer an accounting software most accountants choose to use, choose QuickBooks Online.

Additionally, if you are looking for an accounting software that you can set up on your own, go with QuickBooks Online. QuickBooks has an ecosystem of certified ProAdvisors in North America, which means you won’t have any problems finding a local expert to help you get set up.

In addition, all QuickBooks plans include live telephone and chat support. For a limited time only, receive 50% off QuickBooks Online.

When to Use Xero

If you’re looking for an affordable way to process payroll for less than 10 employees, or you prefer an accounting software that doesn’t charge you to add additional users, choose Xero over QuickBooks Online.

How We Evaluated Xero & QuickBooks

There are some basic features that should be included in any accounting software, such as the ability to create invoices, manage bills, and give other users access to your data. We compared those features, along with cost, ease of use and setup, along with customer support. We used the following criteria to conduct our evaluation of Xero and QuickBooks:

  • Cost – Includes a pricing plan that is affordable for small businesses
  • Ease of setup/use – Setting up the software is easy and the software is intuitive
  • Manage accounts receivable – Invoicing customers and track open balances
  • Manage accounts payable – Keeping track of unpaid bills and track payments made
  • Give other users access – Giving other users (e.g., your bookkeeper) access to data
  • Customer support options – Access to customer support and self-help tools available
  • Payroll processing – Calculating paychecks and making payroll tax payments

After taking both QuickBooks Online and Xero for a test drive and evaluating their ability to meet the above criteria, we would recommend QuickBooks Online over Xero. While Xero did meet all of the criteria listed above, it fell short in one key area: no live customer support available. Live customer support is included with all QuickBooks Online support plans, so they are our top pick.

Pricing & Features

When it comes to pricing and features, you couldn’t find two more similar products than QuickBooks Online and Xero. However as we mentioned above, QuickBooks Online has got Xero beat when it comes to customer service and its large ecosystem, which makes it easy to find a bookkeeper / accountant who is familiar with QuickBooks, such as our team here at Ledgers Online.

Accounts Receivable

Similar to Xero, QuickBooks Online has a robust accounts receivable module that allows you to create custom invoices, email invoices to your customers, and accept online payments. You can also run a detailed accounts receivable aging report to stay on top of unpaid invoices.

Accounts Payable

You can manage your bills in two out of the three QuickBooks Online plans: QuickBooks Online Essentials and QuickBooks Online Plus. However, Xero includes accounts payable features in all three of their plans.

Give Other Users Access

Both QuickBooks Essentials and QuickBooks Plus allow you to give multiple users access to your bookkeeping data. QuickBooks Online Essentials allows you to give up to five users access, and QuickBooks Online Plus allows you to give up to seven users access. However, Xero has got QuickBooks beat in this area because all three of their plans allow you to give unlimited users access to your data.

Bank & Credit Card Integration

Both QuickBooks Online and Xero allow you to connect all of your bank and credit card accounts so that all of your transactions automatically download into the bookkeeping software. Connecting your bank account to QuickBooks Online takes just a few minutes.


Both QuickBooks Online and Xero allow you to keep track of the products that you sell. However, this feature is only available in QuickBooks Online Plus, Xero Growing, and Xero Premium editions. Inventory tracking is not available in the starter plans.


Similar to the inventory tracking feature, multicurrency is only available in QuickBooks Online Plus and Xero Premium 10 plans. This feature allows you to invoice customers and pay suppliers in their native currency, and all of the exchange rate calculations are done for you.

1099 Reporting

You get access to 1099 reporting in the QuickBooks Online Plus, Xero Growing, and Xero Premium plans. This feature allows you to track payments made to contractors so that you can meet 1099 reporting requirements.

Budgeting & Forecasting

Unlike QuickBooks Online, Xero does not include budgeting and forecasting in any of their pricing plans. With QuickBooks Online, this feature is only available in the top tier plan, QuickBooks Online Plus. This feature allows you to create income and expense budgets as well as create budgets for specific jobs or customers.


Both QuickBooks Online and Xero have payroll processing options that integrate smoothly.

Original source:

LedgersOnline provides affordable bookkeeping services for any business anywhere.

Contact us or learn more about our affordable bookkeeping services and see how we can help you with your books regardless of your location with clients across North America.

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