Xero or QBO?

If your small business is looking for full featured, cloud-based accounting software, there is a good chance that you will be choosing between Xero and QuickBooks Online (QBO). This article will provide a high level comparison of the two options in the following categories:

• Pricing
• Features and Integrations
• Support
• User Interface
• Reviews
• Pricing

Both QBO and Xero offer monthly subscription pricing tiers to choose from depending on what features your business needs. We are going to compare the three main tiers of each software that we would recommend for small businesses. Both Xero and QBO do offer a lower base tier that could be useful for some sole proprietors, but the functionality is quite limited.

Xero (more details)

QBO (more details)

As you can see, the pricing structures are fairly similar with the highest tier running $40USD per month for both. If you only need the basics, then QBO wins, but once you start needing things like multiple users and the ability to enter bills and record payments (all pretty basic stuff) then the cost is very nearly identical.

Both options offer a free 30 day trial and you’re likely to find some discount codes out there as well.

Pricing Winner: Tie

Features and Integrations

Both QuickBooks Online and Xero offer all of the fun features that you would expect accounting software to have.

Once you go beyond the basics, there are add-ons or software integrations that can be used to bring in any missing functionality. The Xero Marketplace and the QBO App Store both include extensive lists of add-ons ranging from payroll and HR to eCommerce.

You will find that add-ons work with both Xero and QBO. However, the main difference is that QBO will often limit add-on functionality to the higher price tiers, whereas add-ons will work with any of Xero’s pricing tiers noted above.

Features and Integrations Winner: Xero

Support

A very important factor in choosing software is whether the support offered is actually helpful. Xero and QBO both offer unlimited support for their software, but the type of support offered differs slightly between the two.

Both options showcase robust online knowledge bases and video tutorials that can be used to solve many issues. However, QBO offers phone support whereas with Xero you are stuck contacting their humans via email.

While I have had many excellent interactions with Xero email support, the lack of a phone number holds it back in this category.

Support Winner: QuickBooks Online

User Interface

This is a very subjective category. You may prefer one over the other because you are more used to its layout or it is more intuitive to you. For that reason, it’s important to check out both options and see which design you prefer. You can use the free trials to do this or have a look through some images and videos of the software applications in use.

The dashboards below show the menu orientations of each: Xero opting for a top-down menu structure and QBO using a sidebar. They also share some similar features; both use prominent graphs to display information with various account balances clearly shown on the dashboards.

Xero

QBO

To get a better look at both of the applications in action, have a look at a couple of short getting started videos.

Xero

QBO

I certainly prefer the look and layout of one over the other but I’ll try not to include my bias over something that comes down to personal preference. In this category, we’re going with the not-really-an-answer, answer of “you decide the winner”.

User Interface Winner: Tie

Reviews

Anytime I’m shopping for something on Amazon, I jump straight to the review section. While I don’t always agree with the consensus, my purchasing decision is helped by understanding the main reasons a product has been praised or the common frustrations that others have experienced while using the product.

Let’s use G2 Crowd (they claim to provide real-time unbiased user reviews to help you objectively assess what is best for your business) to look at aggregate review scores for each so we can finally assign some numbers to these suckers!

• QuickBooks Online gets 3.9/5 (1,609 reviews as of today)
• Xero gets 4.3/5 (195 reviews as of today)

4.3 is higher than 3.9 so Xero takes this category, but have a read through some of the reviews to see if there are any factors that might put one of these offerings over the top for you.

Reviews Winner: Xero

Results

Between QuickBooks Online and Xero, which cloud accounting software is better for your Canadian small business in 2018?

Overall Winner: It Depends!!

I know, that’s not picking a winner. But the true answer is that either of these options will work for most small businesses. Your best option will depend on what type of business you have, which user interface you prefer and which software application is most intuitive for you to use.

If you still don’t know which is best for you, go with the software that your accountant knows best. This will make your life easier when they can effectively provide support and will make your accountant’s life easier when they go to prepare your year-end!

I definitely have a preference but that doesn’t mean you would agree with me or that my choice is best for you. We’ll try and avoid bias in this article, but please reach out to Paul if you want a biased and likely profanity filled response detailing his frustrating experiences and why one is way better than the other.