Xero vs. QuickBooks Online: Why Xero is better for small businesses
For years, QuickBooks has been the standard accounting software for small businesses. However, since the advent of the “cloud” a number of new accounting software options are now on the market. QuickBooks does offer a cloud product – known as QuickBooks Online – but it’s no longer the must-have solution like it was during the desktop software era. There are now plenty of other comparable software options.
Of all the choices available, Xero is our favorite online accounting software. Since releasing their U.S. version a few years ago, they’ve quickly become the premier QuickBooks alternative. Below are some of the attributes of Xero that set it apart from QuickBooks Online and make it a great accounting solution for small businesses.
Unlimited Logins
Xero lets its’ customers create all the user accounts they need, regardless of their plan at no additional cost. QuickBooks Online, on the other hand, only allows for one, three or five user logins depending on the selected incremental cost payment plan.
QuickBooks’ cap on logins is an old-fashioned way of thinking. It’s carried over from the desktop generation when additional licenses were required to install software on multiple computers. A major advantage of cloud accounting software like Xero is that business owners and their accountants can work together on a single set of books. QuickBooks is actually hindering this type of collaboration by limiting the number of people who can access the software.
Customer Support
Take a look around the internet and you’ll find plenty of horror stories about QuickBooks support. They’re notorious for long hold times, sidestepping the caller’s issue and pushing customers into upgrades.
Xero provides email support instead of employing a call center. Their support specialists are located across the world in many time zones and offer prompt and helpful responses. The author of a recent Xero vs. QuickBooks article wrote, “Intuit is one of the very few companies where I actually dread having to call customer service. It’s that bad. Xero ranks in the top 10% of customer service experiences I’ve had in any industry.”
Integration Partners / Add-on Software Programs
Both systems connect with other software providers but Xero integrates with far more. They currently have about 350 integration partners while QuickBooks Online has less than one third of this amount. Each software provider Xero connects with is listed in their Add-on Marketplace.
Connecting Xero with the other software your business uses makes life much easier. Instead of manually entering billable hours from your time tracking software, for instance, the data automatically gets imported into your Xero software. The same goes for all the other applications that you integrate with Xero. Minimizing data entry allows Xero users to devote more time and energy to understanding and improving their company’s financial health.
Usability
Overall, things just make more sense in Xero. The dashboard is easy to understand and provides a clear path to navigate to other useful management information. For example, the dashboard presents an overview of the company’s bank account balances, accounts receivable, accounts payable and expense reimbursement claims. The user can then click into any area and view the transactions and details that are affecting each balance.
Tasks such as bank reconciliation, invoicing and paying bills are straightforward with Xero. For example, bank reconciliation traditionally requires the business owner or bookkeeper to enter and match a month’s worth of bank transactions. Using Xero, bank and credit card transactions are automatically imported after each business day using a live feed from each financial institution. This feature allows a Xero Certified CPA to do tax and business consulting on a much more frequent and timely basis when their advice can have the greatest impact on a businesses bottom line.
More and more small businesses are moving from QuickBooks to Xero for a number of different reasons. Xero is already an equivalent accounting product to QuickBooks Online and should only continue to improve. They add new features and integration partnerships frequently (Square and Constant Contact have joined the Xero Add-on Marketplace over the past few months). It will be exciting to see what they come up with next.