Using business accounting software is a crucial step in streamlining your accounting activities. Without it, your accounting team could be working extra hard for results that are unorganized and inaccurate.
But choosing the right business accounting software could be challenging - there are different options and it’s difficult to identify which of them would work best for you. If you’re looking into which accounting software to go with, chances are you’ve narrowed your list down to two well-known ones: Xero and Quickbooks. Both of this software are well-known and are considered among the best business accounting software, so it could be hard to decide between them.
To help you decide, we’ll compare Xero and Quickbooks with each other, and identify where each software performs better for you to make an informed decision that’s right for your business!
Pricing and Plans:
If you own a business or if you’re a part of a business that spends wisely, the budget for your business accounting software is likely one of the first things you’ll consider.
Here’s how Xero and Quickbooks’ different plans and pricing compare to each other:
Xero’s basic plan is its Early plan, which costs about 10 GBP per month for a subscription. The plan gives unlimited users access to the software’s essential functions, but limits invoices and quotations to 20 per month, and caps the quota for bills to 5 per month.
On the other hand, Quickbooks’ basic plan, Simple Start, is slightly more expensive at 12 GBP per month. While the plan provides access to all of the software’s core features, it limits the usage to only 1 user for the subscription.
Xero’s Growing plan is its standard plan, with a fee of 24 GBP per month. Unlike the Early plan, Xero’s Growing plan has no limitations - it allows unlimited invoicing, quotations, bills, and reconciliations for bank transfers. Similar to the starter plan, Xero’s Growing plan has no limitations on the number of users who can use the software.
Quickbooks’ standard plan is the Essentials plan, which costs 20 GBP per month for a subscription. Quickbooks’ Essentials plan increases the number of users allowed to use the software from 1 user to 3 users, but unlike Xero’s Growing plan, it still doesn’t allow for an unlimited number of users. The main improvement of this plan over Quickbooks’ Simple Start plan is that it supports multiple currencies.
Xero’s premium plan is called the Established plan. The plan builds on the Growing plan’s limitless features, allowing accounting to work with more than 160 currencies, as well as manage and track their expenses with ease, and provides access to top-quality accounting features such as capturing invoices and receipts using Xero’s mobile app, assigning expenses to projects and categorizing and labeling items with ease.
Features and Usability
While both of these software is excellent, we’ve compared the two software’s plans and features and we found Xero to be the better option in different areas:
1. Xero scales better with business size
Xero scales excellently: all of its core features, functionality, and user experience are adaptable to larger teams and larger businesses. If you start using the early plan of Xero, you can rest assured that it will still be used as your team grows and expands.
This scalability is not as effective when it comes to Quickbooks, as it lacks the features Xero provides. Xero has a variety of add-ons to facilitate processing new projects you might take on as your business grows, and has an excellent core functionality for processing invoices payments.
If you’re a business that’s not in a static state, and you expect to grow or maybe even downsize in the future, Xero is the accounting software you can count on to have your back all the way through!
2. Xero’s interface and systems are simpler
In the early 2010s, Quickbooks was criticized for its old-timey and clunky interface. While it’s made progress since then, Xero has already established itself as a pioneer in modern, smooth, and easy-to-use interfaces.
Xero’s user interface looks better, has the user in mind every step along the way, and is generally much easier to use than most other accounting software. Most startups prefer to use Xero specifically for its modern and simple yet extremely effective design, making mundane accounting tasks fun and enjoyable.
3. Xero is internationally-recognized
While Quickbooks dominates the North American market, it’s much less well-known outside of that region. Xero, on the other hand, while still commonly used in the US, is much more established internationally, especially in the UK, but also in Europe, New Zealand, and other western countries.
Xero’s automatic bank feeds, simplified payroll, and usability have earned praise from accountants internationally. Its systems and flow do not have the North American user as its only target audience but are instead flexible and diverse enough to accommodate users around the world.
With Xero, it's easier to fix user errors. Additionally, safety checks, as well as proper audit trials, are built-in for maximum efficiency whether you’re based in the US or abroad.
As a business in 2021, chances are you’ll likely be working with businesses internationally with their currencies and set financial procedures. If that’s the case, a system that is flexible enough to allow for easy invoicing with international organizations is the right choice.
All accounting software has its strengths and weaknesses. When deciding on the right accounting software for your business, keep in mind how adaptable it is for your business size and requirements. The fact is, your business needs will likely change and you’ll need a system that integrates well with your other systems and scales with your business as it grows.
Fortunately, accounting software such as Xero hits all the right spots: it’s reasonably priced, has an impressive range of features, suitable for users in and outside of North America, and has an incredibly simple user interface that gets the job done.