Xero vs QuickBooks Online – Which One is Better?

Xero and QuickBooks Online (QBO) are two key players in the cloud-based accounting industry. Both come with loaded features and different pricing plans for their users.

Let’s help you choose the right accounting software for your business needs.

Xero vs QuickBooks Online – Key Features Compared

QuickBooks Online (QBO) and Xero are both cloud-based accounting platforms. Both come with loaded features and provide excellent tools to their users.

Set Up and Ease of Use

Creating a new account and completing the setup are easy with both platforms. Once you sign up for Xero or QBO, you’ll be guided to complete the company setup.

QuickBooks Online offers a simple but intuitive dashboard and is loaded with key features to monitor your business progress with a few clicks.

Xero also has a clean and effective dashboard. Its account setup is also simple and you can get going within a few minutes.

Both platforms offer bank accounting linking options with thousands of banks worldwide. You must ensure that your bank is included in the list.


Many small business owners outsource their accounting tasks to freelancers or hire part-time accountants. It means brand familiarity also becomes an important factor.

QuickBooks Online is a popular choice for accountants and freelancers in the US. While Xero is widely popular outside of the Americas and Europe.

So, talking to your accountant or freelancer can help you choose the right accounting platform.

Invoicing, Expense, and Billing Options

You can create and send bulk invoices for several clients using QBO and Xero. However, Xero allows sending up to 20 invoices with its basic plan.

QBO has a built-in feature to capture expenses and manage receipts. With Xero, you can use the add-on feature to manage expenses and receipts.

Xero uses HubDoc to capture expenses and receipts. However, the integration is seamless but may cost you extra.

Both platforms offer mobile apps and easy scanning options to capture expenses and receipts.

Similarly, both platforms offer intuitive features to categorize expenses, receipts, and billing options to sort your charts of accounts easily.

Xero allows you to accept invoice payments online through ACH, debit cards, and credit card payment options.

QBO accepts invoice payments through ACH, debit cards, credit cards, Venmo, and PayPal currently.

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Third-Party App Integration Options

Xero and QuickBooks Online come with an excellent range of third-party apps to enhance your productivity.

Xero has a collection of 1,000+ third-party apps to integrate with your existing accounting software. QBO comes with a range of over 750 third-party apps to increase your efficiency.

Both these platforms offer payroll services through third-party apps like Gutso. At Xero, it costs you $40 per month extra to manage payroll.

QBO Payroll is an internal payroll app to manage your employee salaries. It offers four different payment plans to choose from with the basic one starting at $31.50 per month + $4.25 per employee.

Scalability and Advance Features

Since Xero offers an unlimited number of users, it’s a great choice for growing businesses. You don’t have to pay extra for additional users.

QBO offers up to 25 users on its highest-tier plans though. It doesn’t mean limiting scalability features though.

Intuit’s QBO is accompanied by a suite of accounting, HR, Taxation, and Enterprise management tools. You can integrate any of these software as you grow.

In short, Inuit’s QuickBooks suite of software tools provides better scalability and flexibility to adapt for medium and larger businesses.

You may have to consider specialized enterprise resource planning (ERP) software for global businesses and corporations though.

Price Plans

Xero has three pricing plans and the basic plan starts at $13 per month. The next two plans cost $37 and $70 respectively.

All three plans offer an unlimited number of users but no payroll options. The basic plan limits invoicing up to 20 invoices per year too.

QBO offers four payment plans with the basic one starting at $30 per month with only 1 user and 1 sales channel.

The higher plans cost $55, $85, and $200 per month respectively. These plans do not include payroll options either.

Both Xero and QBO are offering a discount on pricing plans currently for up to 3 months.

Customer Support

Xero has limited customer support options with no live chat or phone call options for its customers.

You can request a call back from Xero’s customer support team which may take a long time to troubleshoot your problem.

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However, Xero has a good range of tutorials, guides, and articles written on all topics covering the basics of the accounting software setup.

On the other hand, QBO has included a “Free Guided Set up” feature in paid plans for its users.

Moreover, it offers live chat and dedicated customer support through live phone call options too.

Where Xero Wins Over QuickBooks Online?

Xero is growing in popularity for its simplicity and cheaper pricing plans. It has become a solid QB alternative for accountants around the world.

Here are a few key features that make Xero a winner.

Unlimited Users

All Xero pricing plans offer an unlimited number of users. It is an excellent feature for growing businesses with several locations and branches.

QBO’s highest payment plan costs $200 and still allows up to 25 users only. Xero’s highest payment plan costs $70 only and comes with loaded features and unlimited users.

Inventory Management Tools

Xero has built-in inventory management tools for small businesses in its all pricing plans. If you have less than 4,000 inventory items, these features may suffice your needs.

Xero also has a dedicated inventory management app that integrates seamlessly with its accounting software.

QBO’s inventory management tools are offered only with the higher priced plans costing $85 and $200 per month.


Xero is going to be your first choice if you run a small or medium-sized business. Its basic plan starts at just $15 per month with unlimited users.

QBO’s starter price plan is double the price of Xero’s at $30 per month with only 1 user. Thus, if cost is your prime concern, you should pick Xero over QBO.

Ease of Use

Both Xero and QBO offer easy account creation and setup procedures. However, Xero’s ease of use and simplicity is making it more popular among accountants globally.

Then, Xero’s simple and intuitive dashboard is loaded with key accounting features yet it remains simple to operate.

Whare QuickBooks Online Wins Over Xero?

QBO comes from the Intuit family’s suite of software to run your business effortlessly. It enjoys the brand reputation of an industry leader when it comes to accounting software.

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Unlimited Invoicing

Even small businesses need to send multiple invoices to multiple clients each month. QBO does not limit the number of invoices sent per month.

If you need more invoices, you must upgrade to a higher-priced plan with Xero.

Expense Capturing

Expense capturing and categorization is easier and more direct with QBO. You do not need to integrate a third-party app to capture expenses or receipts.

Xero requires integrating another app for expense recording though. Therefore, QBO provides flexibility and an easier option to track expenses for your business needs.

Transaction Tracking

When can record and categorize expenses/income transactions, you can generate more reports.

Xero’s transaction tracking abilities are limited to a few broad categories only. By contrast, QBO lets you create up to 40 categories with its basic plan.

Therefore, transaction tracking and generating useful reports are easier with QBO as compared to Xero.

Customer Support

Customer support is not only an important factor for beginners, it’s important for established users too.

You may need to run a software upgrade or troubleshooting process with any of these software systems. Xero’s customer support is limited and offers no live phone call support.

QBO offers live chat and phone call support for all of its customers. It has added the guided setup process feature in all paid plans too.

Xero vs QuickBooks Online – Final Verdict

Xero is an excellent choice for small and growing businesses looking for cheaper accounting software solutions.

If cost, simplicity, and ease of use are your prime objectives, you should choose Xero over QBO.

Contrarily, if you are looking for an accounting solution with robust and more business management tools, then QBO should be your go-to option.

QBO comes from Intuit’s family brand and lets you integrate with several other software developed by the brand too. Thus, QBO is a winner when you are a larger business with sophisticated accounting, inventory, analytical, and reporting requirements.

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