Xero vs. QuickBooks Online: Features Comparison, Pros, Cons

QuickBooks Online stands out with better customer support and more advanced features, but Xero is less expensive.
Hillary Crawford
By Hillary Crawford 
Updated
Edited by Christine Aebischer

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Xero and QuickBooks Online are both powerful accounting software solutions for small businesses. However, when you compare features, QuickBooks Online inches ahead for its stronger feature set, ease of sharing with accountants and customer support.

This doesn't mean QuickBooks Online is the right choice for all businesses, though. Xero's unlimited-users feature makes it a winner among larger businesses and well-established small businesses that require more than five users. It’s also less expensive than QuickBooks Online and a bit easier to use, thanks to its customizable dashboard and simple layout.

FEATURED

 
Xero
Xero

Xero

NerdWallet Rating 
5.0
Annual Fee 

$0

FEATURED

 
QuickBooks
QuickBooks

QuickBooks Online

NerdWallet Rating 
5.0
Annual Fee 

$0

Xero pros and cons at a glance

Pros

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.

Cons

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

Pros

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.

Cons

Expensive compared with the competition.

Limited account users with each plan.

Xero vs. QuickBooks Online at a glance

Xero

QuickBooks Online

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.

Cost

Plans are affordable, starting at $13 per month, but no free plan.

Plans start at $30 per month.

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 most expensive plan; limited transaction tracking tags; lacks industry-specific reports; users with multiple businesses must pay for separate subscriptions.

Why QuickBooks Online wins

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 year. If you only send out an invoice or two each month, the Early plan is an affordable option at $13 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, whereas 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, regardless of plan level, QuickBooks Online might be a better fit.

Transaction tracking tags

Both Xero and QuickBooks Online have their own versions of transaction tracking tags, but QuickBooks Online is the winner in this arena. Xero lets users create two active tracking categories, while QuickBooks Online allows users to create 40 in the Simple Start, Essentials and Plus plans. QuickBooks Online’s Advanced plan allows for unlimited tag groups. The more categories you create, the more reports you can run to get a better idea of how your business functions and where there's room to grow.

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 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 8 million. With more than 3 million users worldwide, Xero is popular but not as ubiquitous as QuickBooks Online.

Customer support

Business owners who prefer working through a hiccup on the phone will favor QuickBooks Online. The company offers phone support Monday through Friday from 5 a.m. to 6 p.m. PT and Saturday to Sunday from 7 a.m. to 4 p.m. PT. Advanced plan subscribers get 24/7 customer support. Xero doesn’t provide customers with a phone number but will call you if you provide your contact info.

When you might choose Xero instead

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 $200 per month. In contrast, all Xero plans offer unlimited users and its highest-tier Established plan is a more affordable $70 per month.

Ease of use

Xero is known for having a simple, sleek layout that could 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 $90-per-month QuickBooks Online Plus plan, you won't get inventory management, because QuickBooks Online's lower-tier plans don’t come with it. This could be a real shortcoming for small online retail businesses, for instance, that need to keep track of their products and the materials used to make them. All of Xero’s plans come with inventory management so business owners can track 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 doesn’t let users set up reorder points that flag when stock is running low.

Xero and QuickBooks Online alternatives

Wave Accounting

Pricing: Free.

Wave Accounting is a free accounting solution for very small service-based businesses, contractors, freelancers and consultants. If you can’t justify paying for QuickBooks Online or Xero or they have too many features your business doesn’t need, Wave might be an ideal alternative. It has comparable invoicing features, but lacks an audit trail and doesn’t integrate with third-party apps.

Zoho Books

Pricing: Free and up.

With a free plan and paid plans starting at $20 per month, Zoho Books has plans for most budgets. Higher-tier plans include unique features, like workflow rules, on top of tools that help you measure project profitability. Phone support and live chat support are available 24/5 to all paying customers, but third-party integrations are limited compared to QuickBooks Online and Xero.

Zoho Books
Zoho Books

Zoho Books

NerdWallet Rating 
4.5
Annual Fee 

$0

FreshBooks

Pricing: $17 per month and up.

FreshBooks can be a good option for freelancers and contractors looking for an affordable, simple accounting software. There’s time tracking in all plans and phone support is available from 8 a.m. to 8 p.m. ET. Monday through Friday. The first two plan tiers put a limit on billable clients, but not on invoices.

FreshBooks
FreshBooks

FreshBooks

NerdWallet Rating 
4.5
Annual Fee 

$0

Methodology

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. Ratings are based on weighted averages of scores in several categories, including range of features, cost, ease of use, accounting standards compliance, scalability, ease of sharing with accountants, integrations, customer support, pricing transparency and availability of a free trial period. 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.

Best Accounting Software for Small Businesses
ProductStarting atPromotionLearn more
QuickBooks

QuickBooks Online

NerdWallet Rating 
5.0
Learn more

on QuickBooks' website

$30/month 

Additional pricing tiers (per month): $60, $90, $200.

50% off 

for first three months or free 30-day trial.

Learn more

on QuickBooks' website

Xero

Xero

NerdWallet Rating 
5.0
Learn more

on Xero's website

$15/month 

Additional pricing tiers (per month): $42, $78.

30-day free trial 

or monthly discount (terms vary).

Learn more

on Xero's website

Zoho Books

Zoho Books

NerdWallet Rating 
4.5
Learn more

on Zoho Books' website

$0 

Additional pricing tiers (per month): $20, $50, $70, $150, $275.

14-day free trial 

of the Premium plan.

Learn more

on Zoho Books' website

FreshBooks

FreshBooks

NerdWallet Rating 
4.5
Learn more

on FreshBooks' website

$19/month 

Additional pricing tiers (per month): $33, $60, custom.

30-day free trial 

or monthly discount (terms vary).

Learn more

on FreshBooks' website