Xero vs QuickBooks: Full comparison guide

If you’ve ever asked an ecommerce business owner or a bookkeeper, which accounting software is best, chances are you’ve been caught in the middle of a debate: Xero vs QuickBooks? Remember, this rivalry isn’t just about features, it’s about tailored workflows matching your unique business needs. 

QuickBooks is mostly opted by online sellers and accountants for providing detailed, scalable accounting, advanced reporting, stronger tax compliance, and inventory management. 

On the contrary, Xero wins hearts with its huge ecosystem of integrations. It’s especially popular with startups and merchants that need flexibility, easier reporting, and better multi-currency handling. 

So, which one should you choose? In this article, we’ll discuss the key differences between QuickBooks and Xero based on their features and pricing, and discover which platform is the ideal fit for whom. 

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Overview of Xero and QuickBooks

Xero

Founded in 2006, Xero has established itself as a cloud-first accounting solution with 4.4 million subscribers in more than 180 countries. 

The platform primarily focuses on automation, real-time collaboration, and unlimited user access across all price plans. It stands out because of its exceptional multi-currency support, easy bank reconciliation, user-friendly design, and a marketplace of 1,000+ tools to connect.

Xero helps handle bookkeeping, invoicing, and reporting, making it ideal for startups and merchants aiming to improve financial processes and work with accountants.

QuickBooks

QuickBooks by Intuit has dominated small business accounting since 1992 and supports 7 million users holding a strong 62.23% share of the market. It provides QuickBooks Online, Desktop, and Enterprise options to meet various business requirements.

By automating bookkeeping, users gain back about 20+ hours each month. The system stands out with a wide range of features, such as comprehensive financial tracking and reporting, payroll processing, and tax preparation reports, making it ideal for small and medium-sized businesses (SMBs).

Core features comparison

Here’s a step-by-step feature comparison of both platforms- Xero vs Quickbooks:

1. Bookkeeping and financial management

1) Chart of Accounts setup

• Xero:

Xero offers a clean and simple chart of accounts interface with a straightforward setup process. It comes with basic templates, but users can adjust them to match the needs of their specific industry.

• QuickBooks:

QuickBooks offers more granular control over the chart of accounts setup, with industry-specific templates and complex account structures, especially in QuickBooks Desktop. QuickBooks Online simplifies this while maintaining flexibility for growing businesses.

2) Transaction recording and categorization

• Xero:

Xero automates much of the transaction workflow. It imports bank feeds in real time and uses machine learning to suggest and remember categorizations. This reduces manual data entry and improves accuracy over time.

• QuickBooks:

QuickBooks supports both manual and rule-based transaction categorization. Users can set up bank rules for recurring patterns, and QuickBooks will auto-assign categories, making bookkeeping faster for high-volume users.

3) Bank reconciliation capabilities 

• Xero:

Xero' connects to over 21,000 financial institutions worldwide, automatically importing transactions and highlighting discrepancies. The reconciliation tools are easy to use and show clear visuals for both matched and unmatched transactions.

• QuickBooks

QuickBooks offers robust bank reconciliation features across all versions, with robust capabilities in QuickBooks Desktop and Online. It provides detailed reports on reconciliations and offers full audit trails that track and monitor deleted, modified, or newly added transactions within your account.

4) Multi-currency support

• Xero:

Multi-currency is included in Xero’s premium plans and supports over 160 currencies with automatic exchange rate updates. It is ideal for international businesses or ecommerce sellers with global customers.

• QuickBooks:

Multi-currency is available only in QuickBooks Online’s Advanced and Plus plans or in Desktop versions. It supports transactions in multiple currencies, but with more limitations on reporting and customization compared to Xero.

2. Invoicing and payments

1) Invoice customization and branding

• Xero:

Xero provides professional invoice templates that users can customize in many ways. They can upload their logos, change colors, tweak the design, and add personalized fields.

• QuickBooks:

QuickBooks gives users a powerful editor to customize invoices. It offers more design choices and lets users create unique invoice layouts.

2) Payment processing options

• Xero:

Xero works with multiple payment services like Stripe, PayPal, GoCardless, and other local options. The platform's payment processing is straightforward, with competitive rates and quick setup.

• QuickBooks:

QuickBooks Payments is deeply integrated into the QuickBooks ecosystem, offering seamless payment processing with automatic transaction recording. The platform provides competitive rates, particularly for businesses processing high volumes.

3) Recurring billing features

• Xero:

Xero's recurring invoice feature is simple to set up and manage, with automatic sending, payment reminders, and customer portal access. It works well for subscription businesses and also offers clear reports on recurring income.

• QuickBooks:

QuickBooks gives you more advanced options for recurring billing. You can build detailed billing schedules, adjust prices, and link them to project management tools.

4) Client portal functionality

• Xero:

Xero has a simple and easy-to-use client portal. Customers can check and pay their invoices, look at account statements, and communicate with businesses.

• QuickBooks:

QuickBooks includes a similar customer portal but adds extra options. People can track project updates, approve quotes, and review past transaction records.

3. Reporting and analytics

1) Standard financial reports

• Xero:

Xero includes key financial reports like profit and loss statements, balance sheets, cash flow statements, and trial balances. The reports are well-designed, easy to understand, and updates as changes happen.

• QuickBooks:

QuickBooks offers a wide variety of standard reports in its Desktop and Enterprise versions. The platform provides detailed financial reports, management reports, and industry-specific analysis.

2) Customizable reporting options

• Xero:

While Xero allows customization, such as date ranges, filtering by tracking categories, and minor layout adjustments, it has limited flexibility compared to QuickBooks. It is majorly recommended for businesses with standard reporting needs.

• QuickBooks:

QuickBooks makes creating custom reports simpler. Users can filter, sort, and explore the data as they need. It also supports making custom dashboards, reports, and KPIs. QuickBooks Desktop and Enterprise versions provide even deeper customization options for accountants and analysts compared to Xero.

3) Tax reporting capabilities

• Xero:

Both platforms manage tax reports, but with different approaches. Xero provides clean, accurate tax reports that integrate well with popular tax software and accountant workflows. The platform's tax tracking is easy to use and reliable.

• QuickBooks:

QuickBooks brings more advanced tax reporting tools, such as its connection to TaxCloud, Avalara, TaxCalc, and many more. The platform provides detailed tax categorization, supports multiple tax jurisdictions, and offers industry-specific tax reporting features.

4. User experience and interface

1) Dashboard design and navigation

• Xero:

Xero has a simple yet modern interface, making it easy for users to see crucial financial metrics like cash flow, bank accounts, and unpaid invoices right away. Its minimalistic design and logical layout make it easy for non-accountants and small business owners to navigate and understand the financial data.

• QuickBooks:

QuickBooks offers a powerful but more complex dashboard, especially in Desktop and Enterprise versions. Although it provides deeper insights and more granular controls, which accountants and many ecommerce businesses appreciate. At the same time, a new online seller might feel lost at first because of its packed menus and wide range of tools.

2) Mobile app functionality

• Xero:

Xero's mobile app lets users handle key tasks such as making invoices, tracking expenses, and reviewing reports. The app is well-designed and responsive, though it doesn't include every feature available in the desktop version. It works best to handle quick jobs and to stay on top of business finances while away from the office.

• QuickBooks:

QuickBooks' mobile app packs more features. It allows receipt uploads, tracks mileage and time, and handles detailed reports. The app integrates seamlessly with the desktop version and provides nearly full functionality for users who need to manage their business finances entirely from mobile devices.

3) Customer support options

• Xero:

Xero offers email support around the clock and provides a lot of helpful resources like tutorials, a knowledge base, and forums where users can connect. While it lacks live phone support, users generally find the documentation clear and support responsive.

• QuickBooks:

QuickBooks offers a wide range of support options, including phone support, live chat, and an expansive help center. It also has a big community and ProAdvisors who give one-on-one help. The level of support you get depends on the plan, with better support for higher-tier users.

5. Integrations

1) Third-party app integrations

• Xero:

Xero works with more than 1,000 third-party apps in various categories, such as ecommerce, payments, inventory, and time tracking. Some well-known options it connects with are Shopify, Amazon, Stripe, Gusto, Webgility, and HubSpot. This makes Xero a strong choice for businesses that rely heavily on cloud-based tools and want to streamline their tech stack.

• QuickBooks:

QuickBooks provides a wide ecosystem offering over 800 integrations. It works with major tools to handle CRM, ecommerce, inventory, payroll, and expenses. Some important ones include PayPal, Shopify, TSheets, Expensify, and Webgility. Although Xero has a few more integrations, QuickBooks stands out with strong and dependable options tailored to SMBs.

2) API capabilities

• Xero:

Xero comes with an easy-to-use and detailed API, which helps businesses and software creators make their own integrations. This is particularly useful for startups, ecommerce companies, and tech-savvy users who want to automate workflows or connect niche platforms.

• QuickBooks:

QuickBooks includes a strong API that lets developers design custom apps and integrate different tools. Developers widely use it to create advanced automations, sync data across tools, and build industry-specific extensions, especially for companies using QuickBooks Desktop or Enterprise with more complex workflows

3) Popular add-ons and extensions

• Xero:

Xero’s platform connects with many tools to expand its features. It works with ecommerce accounting and inventory tools like Webgility and DEAR Systems, payroll tools such as Gusto, time tracking apps like Deputy, and CRMs including HubSpot. These extensions help Xero serve as the financial hub for service-based, retail, and online businesses.

• QuickBooks:

QuickBooks offers plenty of add-ons, too. It includes inventory tools such as SOS Inventory, payroll options like QuickBooks Payroll and Gusto, and apps for ecommerce accounting like Webgility. It also connects with reporting tools such as Fathom. The desktop versions support direct connections to solutions tailored to fields like construction, manufacturing, and retail.

Pricing and plans

1. Xero:

Free: 30-day trial

Starter: $2.90/mo

Standard: $4.60/mo

Premium: $6.90/mo

2. QuickBooks:

Free: 30-day trial

Simple Start: $1.90/mo

Essentials: $2.80/mo

Plus: $4/mo

Advanced: $7.60/mo

Who should use Xero?

• Cloud-first companies wanting modern, intuitive interfaces
• Growing startups and online sellers requiring scalable, automated workflows
• Service-based businesses needing simple, efficient financial management
• International businesses needing robust multi-currency support
• Collaborative teams benefiting from unlimited users on all plans

Who should use QuickBooks?

• Small to medium-sized businesses with traditional accounting needs
• Desktop-dependent workflows requiring offline access
• Complex inventory businesses needing detailed tracking across all sales channels
• Payroll-heavy companies wanting integrated HR solutions
• Industry-specific businesses benefiting from specialized templates

How does Webgility connect with both Xero and QuickBooks?

Here are some specific use cases that shows how Webgility helped these businesses in streamlining their operations and simplifying accounting: 

1. How Webgility helped Channie (Growing online businesses- use case)

Channie's, a company that creates educational products, grew by selling through several platforms such as Amazon, eBay, and major retailers such as Walmart and Target.

Challenge:

The company faced challenges with manual data entry, which consumed significant time and led to potential errors. They needed a solution to automate their accounting processes and gain real-time insights on how their sales were performing across all channels.

Solution:

By integrating Webgility with their accounting software, Channie's was able to:

• Automate the synchronization of orders from various sales channels into their accounting software
• Establish a single source of truth for their ecommerce data, to help them make smarter choices
• Cut down the need to input data, letting the team concentrate on improving customer experience and growing the business

Result:

The integration led to a 250% year-over-year increase in order volume and freed up over 60 hours each month otherwise spent on manual data input.

2. How Webgility helped The Wine Cellarage (Ecommerce and multichannel sellers- use case)

The Wine Cellarage, a retailer and storage provider of fine wines in New York, grew its operations by starting an online store to handle orders domestically and internationally.

Challenge:

Managing a vast selection of wines, the company needed an efficient way to integrate its Magento-based online store with its accounting software to streamline inventory management and order processing.

Solution:

The company adopted Webgility, which helped them in several ways:

• Automatically sync inventory data between their online store and accounting software, ensuring accurate stock levels
• Track orders from initial purchase through fulfillment and accounting, reducing manual entry errors
• Customize settings to manage new product listings and control their online availability

Result:

The company cut down at least ten hours every week that they used to spend on manual data entry. This change saved more than $400 monthly and improved overall operational efficiency.

Xero vs QuickBooks: Which accounting software is right for you?

Here’s a comparison table that will help you decide which platform to choose between Xero vs QuickBooks:

Final verdict: Xero vs QuickBooks - Which one’s best for you?

Whether you're an ecommerce brand scaling across channels or a service-based business needing simplified books, picking the right platform can save hours every month and give you the financial clarity you need to grow.

If you want detailed financial control, multi-location support, or running an online business with complex operations, QuickBooks is the right choice. Whereas, Xero might be a better fit if you’re a service-based business that values ease of use, mobility, and real-time collaboration without needing the deep complexity of QuickBooks. 

Whichever platform you choose, the power lies in how you use it. Managing ecommerce orders, inventory, payments, refunds, customers, and reconciliations manually can still hold your team back, regardless of your accounting software.

That’s where Webgility comes in.

Choose Webgility: Make the right choice for your business

Webgility bridges the gap between your chosen accounting software and your business operations. Whether you select Xero or QuickBooks, Webgility's advanced integration platform ensures:

• Real-time inventory updates across all sales channels to prevent overselling and stockouts
• Streamlined order management from the marketplace, online stores, or your POS to your accounting systems
• Comprehensive financial reporting with accurate, up-to-date data
• Profitability analytics by product or channel

Still unsure? Try the Webgility clickable demo and make an informed decision.