Xero vs. QuickBooks Online: Features Comparison, Pros, Cons
Both Xero and QuickBooks Online are 5-star products. The right choice for you depends on your business’s complexity and user interface preference.
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Xero and QuickBooks Online are both among the best accounting software for small businesses. But they have big differences in user interface, price point and brand familiarity.
Choose QuickBooks Online if you plan to work closely with your bookkeeper and need a complex accounting solution. Xero, on the other hand, is best if you want a simple, straightforward user interface.
Xero is better for:
✔️ Lower subscription costs.
✔️ Inviting unlimited users.
✔️ Easier learning curve.
QuickBooks Online is better for:
✔️ Familiarity among accountants.
✔️ Detailed transaction tracking.
✔️ Business owners with accounting experience.
QuickBooks Online
90% off
for first three months or free 30-day trial.
Xero pros and cons at a glance
Unlimited users in all pricing plans.
Integrates with more than 1,000 third-party apps.
Feature set includes an excellent mobile app and suite of reports, capable invoicing features, plus automated bill and receipt capture through Hubdoc.
Simple layout and easy to use.
No phone number for customer support listed.
Entry-level plan limits bills and invoices to five and 20 per month, respectively.
QuickBooks Online pros and cons at a glance
Easy to share information with your accountant and to find QuickBooks experts and online resources if needed.
More than 750 app integrations, including live, in-house bookkeeping.
Robust feature set includes thorough record-keeping, comprehensive reporting, excellent invoicing and inventory management, plus a capable mobile app.
Daily phone support and 24/7 chat support in all plans.
Expensive compared with the competition.
Limited account users with each plan.
Undecided on Xero and QuickBooks Online?
Explore NerdWallet’s list of free accounting software options if you’re looking for more budget-friendly solutions.
Xero vs. QuickBooks Online: Head-to-head comparison
NerdWallet independently reviews accounting software products, like Xero and QuickBooks Online, across 10 categories and more than 30 subcategories. We collected the data from the companies’ public-facing websites and from company representatives.
Our accounting software ratings range from one to five stars overall. But we also score individual features to help business owners understand a product's strengths and weaknesses.
Here’s how Xero and QuickBooks Online stack up:
Xero | QuickBooks Online | |
|---|---|---|
Cost |
|
|
Key features | Has robust reporting tools and report customization options, basic inventory tracking in all plans and a capable mobile app; Early plan limits the number of invoices and bills. | Has robust reporting tools and report customization options, invoicing for an unlimited amount of clients, inventory tracking in higher tier plans, plus a capable mobile app. |
Ease of use | Includes tools that help automate the reconciliation process, along with a global search function and customizable dashboard; has a simple layout. | Includes tools that help automate the reconciliation process, along with a global search function and customizable dashboard; however, there is a learning curve. |
Scalability | Can support larger small businesses with dozens of employees; all three plans include an unlimited number of users. | Can support larger small businesses with dozens of employees; highest-tier plan includes 25 users. |
Ease of sharing with accountants | Includes audit trails and easy accountant access; although the product is gaining popularity in the U.S., it’s less popular than some competitors like QuickBooks. | Includes audit trails and easy accountant access; has millions of users so your accountant will likely be familiar with it. |
Integrations | Integrates with more than 1,000 apps. | Integrates with more than 750 apps and offers live, in-house bookkeeping add-on. |
Customer support | Does not provide a phone number to customers but a representative will call you if necessary; no live chat support. | All plans include 24/7 live chat support; phone support is available 5 a.m. to 6 p.m. PST Monday through Friday, and 7 a.m. to 4 p.m. PST Saturday and Sunday. |
Advanced features | Includes project tracking tools in most expensive plan; limited transaction tracking tags; lacks industry-specific reports; users with multiple businesses must pay for separate subscriptions. | Includes project tracking tools in the Plus plan; limited transaction tracking tags; lacks industry-specific reports; users with multiple businesses must pay for separate subscriptions. |
We don't incorporate user reviews in our star ratings, because we can't verify every user's individual experience. However, small-business owners’ perspectives are still worth taking into account to get a more complete overview.
For a more detailed analysis of the user sentiment around each product, read our individual reviews of Xero and QuickBooks Online.
Where Xero stands out
Unlimited users for a low cost
If you need to give accounting access to more than five people, Xero could be the better option for you. QuickBooks Online’s most popular Plus plan tops out at five users. Its highest-tier Advanced plan allows up to 25 users, but that plan is expensive at $235 per month.
In contrast, all Xero plans offer unlimited users. Plus, its highest-tier Established plan is more affordable at $80 per month.
Ease of use
Xero is known for having a simple, sleek layout. This may feel more approachable to business owners who are new to accounting basics or don't have the background knowledge to leverage QuickBooks Online's full functionality. You can do a lot with QuickBooks Online, but all the options may feel like information overload starting out.
Basic inventory tracking in all plans
If you can’t justify the $99-per-month QuickBooks Online Plus plan, you won't get inventory management. QuickBooks Online's lower-tier plans don’t come with this feature.
This could be a real shortcoming for small online retail businesses, for instance, that need to track their products and the materials used to make them. All of Xero’s plans come with basic inventory management, so business owners can know what’s in stock and which products are selling.
Just keep in mind that, unlike the inventory feature in QuickBooks Online’s higher-tier plans, Xero's core plan offerings don't let users set up reorder points that flag when stock is running low. You have to subscribe to Xero’s $39-per-month Inventory Plus add-on to access that feature.
» MORE: Top Xero alternatives
Where QuickBooks Online stands out
Stronger feature set
No invoice limit
All QuickBooks Online plans support unlimited invoices. Xero’s Early plan, recommended for self-employed people or brand-new businesses, allows 20 invoices per month. If you can stay within that limit, the Early plan is an affordable option at $20 per month. Otherwise, you’ll have to bump up your subscription or consider QuickBooks Online plans.
Claiming expenses
QuickBooks Online allows users to claim expenses and match them to photos of receipts in all plans. Xero requires Xero Expenses, an additional feature only included in the highest-tier Established plan. If snapping photos of receipts to claim expenses on the go is a key mobile feature you’d like to have, QuickBooks Online might be a better fit.
More in-depth reconciliation process
Reconciliation is one of the most important accounting tasks you’ll complete each month, and QuickBooks Online’s process is a bit more thorough than Xero’s.
QuickBooks Online’s reconciliation page shows which account each transaction has been assigned to at a high level. This makes it easy to spot categorization mistakes. Xero’s reconciliation page does not show each transaction’s category. Instead, you need to navigate to a new tab and click on the specific transaction to see how it’s been categorized.
Accountant familiarity
Both accounting software products let users invite their accountants by email. The process shouldn’t take more than a couple of minutes. If you’re located in the United States, though, there’s a better chance your accountant is more familiar with QuickBooks Online than Xero.
QuickBooks Online is an industry standard with more than 5 million users worldwide. If you count QuickBooks Desktop users, that number rises to more than 7 million. With more than 4 million users worldwide, Xero is popular — but not as ubiquitous as QuickBooks Online.
» MORE: Top QuickBooks alternatives
Xero and QuickBooks Online alternatives
NerdWallet rating 3.8 /5 | NerdWallet rating 5.0 /5 | NerdWallet rating 4.8 /5 |
Starting at $0 Additional pricing tiers (per month): $16 | Starting at $0 Additional pricing tiers (per month): $20, $50, $70, $150, $275. | Starting at $21/month Additional pricing tiers (per month): $38, $65, custom. |
Promotion N/A | Promotion 14-day free trial of the Premium plan. | Promotion 50% off for 6 months. 30-Day Money Back Guarantee. |
Wave: Better for side hustles. QuickBooks Online and Xero have many features. But smaller businesses or side hustles may not need those bells and whistles (or the costs associated with them). Wave can be an ideal alternative. It has a free plan with solid invoicing capabilities. Read our full Wave review.
Zoho Books: Better price point. Zoho Books is a scalable, yet affordable solution for growing businesses. Higher-tier plans include unique features, like workflow rules, on top of tools that help you measure project profitability. And similar to Wave, it also offers a free plan. Read our full Zoho Books review.
FreshBooks: Better for freelancers. FreshBooks can be a good option for freelancers and contractors looking for an affordable, simple accounting software. Plus, there’s time tracking in all plans. Read our full FreshBooks review.
NerdWallet independently reviews accounting software products before determining our top picks. We collect the data for our software ratings from products’ public-facing websites and from company representatives. Information is gathered on a regular basis and reviewed by our editorial team for consistency and accuracy.
NerdWallet’s accounting software ratings favor products that are easy to use, reasonably priced, have a robust feature set and can grow with your business. The best accounting software received top marks when evaluated across 10 categories and more than 30 subcategories. Learn more about how we rate small-business accounting software.
These ratings are meant to provide clarity in the decision-making process, but what’s best for your business will depend on its size, growth trajectory and which features you need most. We encourage you to research and compare multiple accounting software products before choosing one.
NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.
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