Xero vs QuickBooks

Written by: Annie Zygmunt

- Xero vs QuickBooks Comparison
Introduction:

As an accounting company, we use softwares that help us deal with our clients’ needs. The two softwares that we use are called Xero and QuickBooks. However, the latter is the one used most by our accountants.

The software that we use depends on what the client picks. Typically, the client would describe how their business works, what sort of income/expenses they have, what their accounting needs are, etc.
The accountant collaborating with them would then advise them on the best accounting software for their business needs.
If the client is already using one of those, they can choose to continue with the same software or switch to the other one.

Below are some of the pros and cons of both softwares, introducing you to some of the positives and negatives of each.

QuickBooks
Pros:
  1. Automated Payroll. Taxes are calculated automatically, while checks are deposited directly. It may seem more expensive to have automated payroll to begin with. However the cost of manual payroll may be deemed more expensive in the long run. This also includes automated reminders.
  2. Time saving remote access gives users the ability to access their accounts from wherever they are, proving to be convenient.
  3. Users can be confident in the secured online system that allows them to manage multiple companies, with the ability to switch between one another.
  4. The option to create rules makes it easier to track expenses. These can be grouped into one distinct expense, or broken down to smaller, more specific expenses.
  5. Users can add suppliers and customers, as well as assign relevant invoices to both to make it more organised.
  6. QB makes it easy for users to integrate their banks, credit card companies, and other management softwares – all of which can be done online.
  7. The online service has a free-form invoice feature.
  8. Due to a new update, users can now submit VAT returns sing Making Tax Digital (MTD) which is more efficient.
  9. Cheap prices (slightly cheaper than Xero) varying with each plan. Business plans vary at £12, £22, and £32 a month, while Sole Trader plans vary at £8 and £12.
Cons:
  1. Some customers reported that the online version provides limited reports, therefore finding the desktop version better. The online version does not allow for chart customisation, with a limited report builder, and proves to be time consuming when cleaning outdated reports.
  2. Can be difficult to learn, though this varies from person to person. There are also plenty of video tutorials that can be found online if the user is stuck on anything.
  3. The online software can be problematic due to the limited inventory management. Again, this can be solved with a third-party software. However, that may prove difficult if the user isn’t internet savvy.
  4. Some users found that if they change a category/department in an invoice, it will delete all data from that specific invoice. This may force them to start all over again. It can also automatically incorrectly use due dates of an invoice.
  5. Delays have been found in syncing issues with credit card transactions.
Xero
Pros:
  1. No installation or download is required, as all data is Cloud-based, creating less worry about downloading a virus.
  2. Quite easy to use, and you’re connected to your own accountant.
  3. Offers a 30-day free trial. This is a bonus for trying it before you buy it – saves you time and money even if you decide to not buy it.
  4. Instant visibility of your financial position, provided by the clean interface.
  5. Bank feeds and reconciliations are real-time and efficient.
  6. Capable estimating/quoting/order process is offered – smoothly tied to AR invoices.
  7. Easy integration and ability to manage personal expenses with the capacity to approve of each receipt.
  8. Access from any device with Wi-Fi, with the ability to also access the same files as clients.
  9. Automatic updates, so it can grow alongside your business as needed.
Cons:
  1. Although no installation is required, it may take some time to learn how to use it. This is especially true if the user is a first-time user and not tech-savvy.
  2. Increased plan prices are slightly higher than QuickBooks; now standing at £12, £26, and £33 a month.
  3. The inventory is much more basic.
  4. Limited support on claims, projects, and multi-currency within the most expensive plan.
  5. Businesses will need to manually follow up on unpaid invoices.
  6. The software can run very slow if the company is running online or if it makes higher volumes of sales via PayPal.
Conclusion:

Whichever software you decide to go with, our accounting team is sure to be there to help every step of your business journey.

This article was written by Annie, the Digital Content Writer of Bache Samuels, and checked over by one of the members of the accounting team, both of whom are unbiased to either software.