Systems Smackdown: Xero versus Quickbooks Online
Our systems smackdowns focus on comparing 2 similar technologies or systems, so you have a better understanding about the advantages of each, so you can make an informed choice about which system is the right one for you.
This smackdown focuses on accounting and bookkeeping software. Which accounting system is better? Which one should I use? We only work with clients who use Xero. We believe it's the best software out there, and only getting better. Here's why...
Both Xero and Quickbooks Online are cloud-based accounting software tools that are designed to be easy to use and accessible from anywhere. They both connect to other cloud-based software tools to help you move your data seamlessly between the different tools you use to manage your financial information.
For example, both systems can connect to a point-of-sale system, like VendHQ or WooCommerce, to import your sales data and costs of goods information. Or they can connect to your CRM system to keep your contact information synced across all the systems you use. That's really the advantage of using cloud-based tools.
Both systems have the ability to upload and store documents, and can connect to systems like HubDoc or Entryless to facilitate data entry, via Optical Character Recognition (which is just a fancy way of saying the computers read your receipts and bills and enter that information into your accounting software without you having to type in the information).
So... now you're thinking, great- if they do the same stuff, how am I supposed to actually pick?
At face value, you would think that the systems are equivalent - if they do the same basic stuff, why is there a difference?
The advantages of one system over the other comes down to the nuances of how each system functions, and what areas one system does better than the other. This is where we get under the hood.
There are a few key areas that make up those little differences that make one system inherently better than the other:
System reliability is an important factor. It's one that neither company really advertises or focuses on, but the ability to log in and get access to a cloud-based system whenever you need to is a pretty core functionality to being able to operate from anywhere in the world. If you can't log in, you can't do what you need to do.
Xero is significantly more reliable than Quickbooks Online. Having run both systems for clients at the same time, it seemed like every time I tried to log into Quickbooks Online, it was down. In 5+ years of using Xero, it's happened to me maybe once or twice. Xero has 99.97% uptime and has some serious security chops - they have one of the strongest security reputations in the accounting world. Quickbooks doesn't publish their uptime statistics.
Ease of Use/User Interface
This is another area where Xero is a clear winner. It's significantly easier for non-accountants to figure out how to use Xero. The help documentation within in the system is easy to understand and readily searchable, so someone who is new to accounting or bookkeeping could easily figure out the system.
If you sit there, looking at your bookkeeping in Quickbooks Online and just feel stupid because you can't figure it out - you're not alone. That's just the way it is. It's great for accountants and bookkeepers who know the system and can navigate it quickly, but for small business owners trying to figure it out, it can be very intimidating. Quickbooks is fine and can feel intuitive if you already know it, but when you open up the program for the first time it's not.
When it comes to customer support and education, Xero is another clear winner. Everyone who works at Xero is friendly and helpful. They respond quickly to help tickets and there are very few negative online complaints, compared to a ton of complaints about Quickbooks Online and their customer service.
Xero is cheaper, and depending on the number of users, sometimes WAY less expensive. Because Xero plans include unlimited users, the price stays the same (usually $30/month, but can vary up or down depending on what level of service you need). With Quickbooks Online, you have to pay per user, and the base price starts at $50/mo now, so the price can quickly escalate.
Xero hosts an add-on marketplace with over 200 apps, designed to expand your Xero account into a business ecosystem. Using add-on software, you can create the exact technology to flawlessly and efficiently operate your business. Data can flow from one system to another, eliminating the need for duplicate data entry or errors and discrepancies between two systems.
Quickbooks also integrates with software, but often the integrations aren't as robust or don't work as well. Xero operates on a fundamental principle that other systems should connect and so they have always encouraged the development of add-on tools. Quickbooks wants to provide everything for everyone, so they've reluctantly connected to other software because the market demanded it.
Automation & Machine Learning
If you were just going to pick one reason to switch to Xero, this should be it. Xero is harnessing machine learning to start to automate bookkeeping. They can suggest the correct account for invoices and purchase transactions, based on the information you type. The system has smart matching to reconcile transactions quickly (it's like playing Space Invaders when you've got it set up right). Xero is investing heavily in automation features and using technology to make bookkeeping easier - this is one of their main company focuses for the future.
Overall Winner: Xero
Interested in switching to Xero? We're here to help.