QuickBooks continues to be the pioneer in small business accounting for quite some time now. Its flagship cloud-based application – QuickBooks Online is a preferred option for the online stores. However, these days it has a serious business contender in Xero. During the last few years, Xero has managed to present a fantastic alternative with its outlook of ‘Beautiful Accounting’.
Should you be searching for ideal accounting software, you are going to potentially end up at crossroads making a choice on between QuickBooks Online & Xero. We thought to compare Xero and QuickBooks head-to-head and go into detail, contrasting the top-rated key capabilities and preferences required to handle the accounting for your online store.
To make it simpler for you to understand how we compare Xero and QuickBooks, here’s an outline of the topics:
In accounting software, the business overview dashboard exhibits a snapshot of your company’s finances. Usually, your day-to-day overviewing tasks can be achieved simply using this.
QuickBooks Online (QBO) has a nicely designed homepage dashboard. It provides an insight to your earnings, expenditures and Profit-Loss. The dashboard really does a great job in demonstrating the crucial metrics to monitor the progress of your online store. What we really like about the dashboard is the fact that you can hover over items to get more details.
Xero’s dashboard is fairly simple and basic in comparison to that of the QBO. However, it tends to make a great attempt to facilitate ease-of-use to its customers. In addition to the typical balance and profit-loss data, the dashboard provides a single-click controls to gain access to certain crucial accounting attributes such as uploading an invoice or reconciling your bank accounts.
The Xero dashboard comes with a unique function – the ‘Account Watch list’. It enables you to keep close track of the balance of major accounts from your Chart of Accounts.
Who Wins: Despite the fact that both the dashboards are equivalent, Xero takes the lead since it offers faster one-click access to the fundamental accounting features in addition to the business summary.
Managing invoices is important to maintain a record of any late payments, expenditures and extract day to day accounting reports depending on your sales, expenditures and sales taxes.
The choices at the invoice level in QuickBooks Online are barely sufficient to fulfill the everyday requirements of an eCommerce store. Here’s a preview:
Just about all fundamental information such as customer particulars and the due dates can be found, however, there exist certain extra pieces losing out in the invoice details. Should you be providing special discounts on particular products, the invoice in QuickBooks Online is not going to cater to the reductions at the line-item stage. This could certainly result in a miscalculation in income from particular items. Additionally, keep in mind that if necessary, it is not possible to apply unique Tax Rates to distinct Product Categories in QuickBooks.
Xero has an obvious edge in this case. You can apply Special discounts at a line-item level and make use of distinct Tax Rates to particular Product classes.
All this is completed by remaining true to its ‘Beautiful Accounting’ theory. The entire invoice can be keyed in without scrolling an inch of your computer screen and any kind of new information can be entered with a handful of mouse clicks.
Who Wins: Xero rocks this point with its comprehensive invoicing arrangement which accommodates particular eCommerce requirements.
The numbers say out loud at the time when they are a part of critical business reports. Let’s take into consideration how QuickBooks Online & Xero differ in their reporting capabilities:
QuickBooks Online has the greatest collection of off-the-shelf reports amongst the other accounting software. There exist more than 80 reports that can be accessed in just a few mouse clicks and are broken down into categories, such as Business Summary, Sales, Income tax, Products and Stock amongst others.
The reports are a lot better with impressive customizations. For your online shop, you may opt to include memo notes from invoices, include product detail as well as modify columns by customizing any one of the inbuilt reports.
Reporting is not one of the highly-developed functions in Xero at present. The primary reports for your online shop can be found, however, the possibilities to customize them are actually minimal. You have to count on the integrated templates.
But then tell you what, Xero is mindful of this restriction and is putting much effort to improve.
Who Wins: QuickBooks Online is the winner in reporting because of its vast range of integrated reports and the capability to personalize them particular to your requirements.
As soon as you collect payments from your customers, you have to enter it into your accounting software so as to refresh the latest records and execute bank reconciliation. Bank account reconciliation often is time intensive and tiresome in case you receive greater than 10-20 orders on a daily basis. Both QBO & Xero have certain quick integrated capabilities to make bank reconciliation less complicated.
QuickBooks accounting software enables you to set up your banking account to enter transactions into it. From the Banking dash panel, you can categorize deposits or even match them with the balance.
As soon as you verify all the transactions, the amount adjacent to “Difference” must essentially be $0. The problem is any time it doesn’t tally. This technique has carried on for several years, and frankly, it may get fairly annoying at times.
Xero uses a marginally different technique for bank account reconciliation. It is possible to link up your account to retrieve transactions automatically into Xero.
As with QBO, Xero likewise indicates matches between your bank account transactions and payments. The side-by-side technique of Xero’s reconciliation is extremely beneficial.
Who Wins: Xero offers far better account reconciliation services with smart suggestions and the instinctive technique of matching.
Both Xero and QuickBooks provide you with third-party app integrations in order to boost efficiency whenever accounting for your online business.
QuickBooks Online can very well be used seamlessly with the leading eCommerce setups. Thanks to it being the long-held and more proven accounting option, the integrations are developed.
However, QBO is yet working out the proper method to categorize the applications. Although its app store is loaded pretty much, the choices in integrations is underwhelming. Possibly, it might take a leaf away from Xero’s books to put up for the cloud.
Xero offers one of the largest collection of third-party integrations with more than 400 add-ons enlisted. QuickBooks accounting software continues to be growing in this regard and features around 200+ applications in its app store.
Apart from the integrations with eCommerce shops, Xero additionally enables you to decrease manual effort and time in mailing and handling documents with integration with applications such as Constant Contact and Google Docs.
Who Wins: Xero with its ‘cloud-first’ solution outperforms QBO with additions spanning across all accounting necessities.
Although QuickBooks Online and Xero present equivalent features, there still exist certain exclusive offerings in both:
Inventory management in QuickBooks Online
QuickBooks Online offers a completely-developed inventory management program. It enables you to key in the inventory count of all your merchandise in your online shop and allows you to monitor the sales against the number. Likewise, you could key in the ‘Cost Price’ of each that allows for precise reporting of ‘Cost of Products Sold’.
Likewise, Xero has its own inventory management solution that could inform you about your most profitable product line or the one that sells most. It capably tracks stock levels and even their values for each day.
Xero’s exceptional smart phone app
Now is the age of mobility. Xero’s smartphone app for Android and iOS provides you with easy access on the move to actually carry out business tasks seamlessly.
Even though QuickBooks Online offers a smartphone app, it happens to be restricted in features. The app enables you to look at the bank account balances and crucial reports, however, it doesn’t allow you to perform some fundamental tasks, such as banking or adding expenses to invoices.
To consider the facts, there is no competition here. Xero’s customer care is setting up cutting edge benchmarks in the marketplace.
Xero’s technical support is live round the clock and throughout the year. QuickBooks Online offers technical support on Weekdays from 6 am – 6 pm PST and Saturday from 6 am – 3 pm PST. Xero has got a super-fast response time in comparison to QuickBooks Online.
For personal help and professional advice, both of them have their particular groups. The point to make a note of, is the little presence of QBO’s in-house staff in the ‘QuickBooks Online Community’. Specifically for eCommerce companies, the support is not up-to-the mark as quite a lot of responses are either publicized or unsatisfying offered by third party professionals and advisors.
Although we must include a special mention to QuickBooks’s coverage of accredited leading accountants referred to as ProAdvisors that can be reached out for assistance anytime. There are a lot more than 70,000 QuickBooks ProAdvisors – certainly one of the biggest networks of accounting specialists around the globe.
Xero’s in-house staff is fairly active in their Xero group and they respond to questions on a regular basis. For eCommerce queries relating to invoicing, inventory management and sales tax reporting, you can find numerous threads with valuable instructions and assistance.
Who Wins: Xero
Well, it is time to take the tough call now. We have to admit that it’s no surprise that QuickBooks Online & Xero are the experts in their own spot. Surprisingly, at present 90% of QBO’s users are from the US and 95% of Xero’s user base is outside the US (UK, Australia and NZ). Therefore, we are not the only ones evaluating these applications.
We attempted to perform an extensive research between the two software and both of them have their own strong points and scope for development. You ought to go for the software which is best suited for your requirements.
FinancesOnline is available for free for all business professionals interested in an efficient way to find top-notch SaaS solutions. We are able to keep our service free of charge thanks to cooperation with some of the vendors, who are willing to pay us for traffic and sales opportunities provided by our website. Please note, that FinancesOnline lists all vendors, we’re not limited only to the ones that pay us, and all software providers have an equal opportunity to get featured in our rankings and comparisons, win awards, gather user reviews, all in our effort to give you reliable advice that will enable you to make well-informed purchase decisions.