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Accounting, budgeting, and financial technology for businesses

Xero and QuickBooks Online Compared

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Updated March 15, 2017. This post has been updated with additional information.

QuickBooks is the BAND-AID of accounting software. Massively popular in all its iterations – online and installed – it’s the product people are most likely to turn to based on brand recognition alone. 

However, it’s not the only small business accounting software out there, and Xero is certainly a contender in the cloud accounting space.

xero quickbooks online

The online version of QuickBooks – cleverly named QuickBooks Online – is a great product for a specific customer. The market is expanding, though, and there are alternatives. Recently, antipodean challenger Xero has been making waves in North America.

Xero is now the seventh most popular accounting software overall and the third most popular online-only option, according to Capterra’s Top 20 rankings. If you’re torn between the standby success of QuickBooks Online and the rising star that is Xero, you’re in luck.

We’ll compare the software based on features, the support available, and their pricing systems. By the end of this article, you should know which option works best for you.

QuickBooks Online and Xero versions

Normally, I’d hold off on price comparison until the very end of things. However, QuickBooks Online and Xero both come in a range of flavors, which affect both feature sets and pricing. We’ll do a slightly more detailed price comparison at the end of the article, but let’s set the stage here.

Xero comes in three price tiers, with different features and limits set for each. For this comparison, we’ll look at the “Standard” version of the software, which is the mid-tier option. It offers an unlimited number of invoices, bills, and bank statement. This version comes in at $30 per month.

On the QuickBooks Online side, we’ll use the “Essentials” option. If offers the same limitless invoicing and billing options that Xero features. It is also $30 per month. We’re also going to call this QBO, most of the time, because I like brevity. I also like spelling out my love of brevity in non-brief notes.

Feature set comparison

There’s a lot of overlap in the feature sets of QuickBooks Online and Xero. Backing up data, security measures, importing bank feeds, mobile apps, invoicing, and other basic accounting software features come standard. If your business just needs a fill-in-the-blank accounting package, these will both work equally fine, as far as features go.

xero quickbooks online

The first distinction between them is the number of users that have access to the service. QBO comes with three users, not counting two accountant access points, which can be used in conjunction with your accountant’s version of QuickBooks. Xero offers unlimited users and accountant logins – this is true at every pricing tier.

If you have more than, let’s say, 100 employees, you might need more than three users. That’s not a given, though. Unlimited users can be incredibly useful for businesses that have multiple part-time support staff that need access to accounting software or companies with lots of owners who all want access to the numbers at any time.

Xero also gives you the ability to create purchase orders, which isn’t included in this level of QBO. You’ll also have the ability to generate 1099s and W-2s with Xero. You can also run your own payroll for up to five employees in 29 states with Xero. Finally, Xero comes with some inventory tools built-in, with add-ons available for more technical inventory management.

On the other hand, QBO comes with multicurrency support, while Xero only offers that feature at its highest pricing tier.

Both systems offer plenty of apps and integrations to expand your financial universe. You can manage payroll, inventory, budgeting, reporting, and all the rest. As Xero becomes more popular, there are more and more companies catering to both systems.

Xero and QuickBooks Online support systems

In a rundown from the Accountex Report last year Greg Lam saw support moving in opposite directions. While Xero’s used to be tight and well-ordered, it was starting to get big enough that it was sprawling. On the other hand, QuickBooks’ help, which had been too big to navigate successfully, was getting clearer due to some better search tools and categorization.

With QuickBooks Online, you get free phone support and access to the online support forums. Xero offers support through its forums and through an email ticketing system. Merchant Maverick’s review of the systems aligned with Accountex saying, “Intuit seems to be trying to turn over a new leaf here,” but that “Xero’s 24/7/365 service is also a major advantage.”

In short, it’s a bit of a tossup. If you like voice, QuickBooks is going to make you happier – assuming hold times are killing you. If you need support on Sunday night, Xero might be the way to go.

Pricing for Xero and QuickBooks Online

Both of the versions we’ve been talking about here are the middle options in a three-option set and both come in at $30 per month.

QuickBooks offers a cheaper $15 per month option with Simple Start and a more expensive $40 per month option in Plus. The striped down Simple Start allows just one user, though you still get the two accountant users. You’ll also be losing recurring invoicing, bill payment tools, and some reporting features.

At the $40 level, QBO Plus gives you five users, more reports, purchase orders, light inventory management, 1099s, billable hours tracking, and some budgeting and forecasting tools.

Xero has a $9 per month Starter version and a $70 per month Premium version. The Starter version limits you to five invoices, five bills, and 20 bank transactions per month. You also won’t have the purchase order or payroll check cutting options that come with the Standard plan.

For $70 per month, you get multi-currency support and payroll for ten employees. If employee payroll is driving your purchase, there are also Premium upgrades that give you access to more employee payments – up to 100 employees for $180 per month.

Running a small business on QuickBooks Online or Xero

Individual features may be the key to making a software decision for your small business, but thinking about how everything comes together can be helpful.

If you’re relying on either QuickBooks Online or Xero to run your business, you need to think through the possible scenarios that you could come across. Finding a software with feature X is only meaningful if you have a problem that’s solved by having access to that feature.

If your business needs five people to have access to your accounting software, wants to use receipt capture through a mobile app, and doesn’t own any fixed assets of note, then you find the option that solves those problems. Having multicurrency support doesn’t matter to your business, so you can ignore it.

The key to getting the best accounting software it to understand how the software solves the problems you face.

Final thoughts

I like both of these offerings. I’m on a bit of a Xero kick, right now, having been impressed by the company’s CEO when I saw him speak at Xerocon last August. That said, the number of financial software systems that don’t integrate with QuickBooks is almost countable on one hand, and I really like that flexibility.

A lot of the choice is going to depend on your company’s workflow and the need of your accountant. Both Xero and QuickBooks offer accountant-specific releases, which give accountants specialized tools and client management options.

One of the nice things about the world we live in is that data is getting more transferable. If you try QuickBooks Online or Xero and hate them, you can export your data and import it into the other option without too much hassle.

If you need more than just these two options – and I would recommend you at least check the other players out – swing over to Capterra’s accounting software directory for a full listing.

We’ve also recently launched our accounting software affordability and user friendliness comparisons, which can help you make an informed choice for your budget and needs.

Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.

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About the Author

Andrew Marder

Andrew Marder is a writer for Capterra. His background is in retail management, banking, and financial writing. When he’s not working, Andrew enjoys spending time with his son and playing board games of all stripes.


I run a small bookkeeping business and at the moment most of my clients use Xero which I have found great. I am looking to expand the business and the possibility of using QuickBooks as well. I need to look into using stock inventory and the cost of additional apps that might be needed. I will take a look at the comparisons that you have mentioned.

Looking for a free alternative solution to Xero and Quickbooks? Check-out

@Angela: If you are looking for some combo between accounting, invoicing and inventory I would suggest you to check Pi.TEAM ( . It is extremely simple and intuitive to use, they are new in the segment but I really like the way ledgers are updated and displayed and how invoices are managed. Basically it is quickbooks but much more focus toward invoicing part. You can also connect with different payment gateways to collect payments online.


I’ve switched recently (three months ago) from QuickBooks (desktop) to Xero. While QB payroll functionality was not intuitive, I find Xero’s payroll module the stuff of nightmares. I dread pay runs. From the fact that I need to set up pay items in other modules, to the fact that any changes to an employee’s time sheet is not recalled from pay to pay (and you can;t set it up to do so from what I can work out), to opaque reporting ( I cannot set up a report that tells me at a glance how many hours my employees have worked). It’s truly frustrating. Almost everything else about Xero is great (well, aside from the fact you need to download an invoice every time you want to print it. And that employees and customers are listed by first names, not surnames, and that’s not customisable. And that although employee pay items can be recorded against different divisions, super remains unassigned).

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