Every time you open your accounting software, do you feel like you need a finance degree just to send an invoice? Your "simple" bookkeeping has somehow turned into a part-time job you never wanted.
The solution seems obvious: upgrade to professional accounting software. But then you hit the Xero vs Zoho Books decision, and suddenly you're drowning in feature lists and pricing tiers.
Here's what you actually need to know - Xero brings enterprise-level power with 1,000+ integrations and unlimited users. Zoho Books counters with exceptional value, a free plan, and seamless integration across 50+ business apps.
We've tested both platforms across real-world scenarios. In this article, we’ll also show you how these tools can transform your ecommerce accounting by automatically syncing sales data across different platforms.
Whether you're a bootstrap startup or a growing SMB, this comparison reveals which platform truly fits your business needs.
Xero began with a mission to simplify accounting for small businesses, quickly rising as a global alternative to legacy desktop solutions. Built on a cloud-first approach and a focus on ongoing improvements, Xero now helps thousands of businesses in more than 180 countries.
Core strengths:
Best for:
Zoho Books is part of the larger Zoho suite that can integrate with 1000+apps like CRM, HR, and inventory tools. With its focus on affordability and all-in-one functionality, Zoho Books has become a favorite for startups and budget-conscious SMBs.
Core strengths
Best for:
Now let’s explore how both platforms handle automation, workflows, and smart efficiency features:
Xero provides a robust, customizable chart of accounts with the ability to import existing structures. The general ledger interface is clean and professional, though it may require some accounting knowledge to fully utilize. Users can create custom account codes and modify the chart structure as their business evolves.
Zoho Books offers an intuitive chart of accounts set up with guided templates for different business types. It suggests account categories based on the user's industry, which makes it simpler for beginners to use. But when compared to Xero, it lacks options to customize accounts on a deeper level.
Xero excels in invoicing flexibility with professional templates, automated recurring invoices, and seamless payment integration with Stripe and PayPal. The quote-to-invoice conversion is streamlined, and clients can accept quotes and pay invoices directly through the platform.
Zoho Books matches Xero's invoicing capabilities with robust templates, automated reminders, and recurring billing. Its standout feature is the integration with Zoho CRM, automatically pulling customer data and enabling sales-to-billing workflows. The platform also supports multi-language invoices for international clients.
Xero sets the gold standard for bank reconciliation with direct feeds from over 21,000 financial institutions. The matching algorithm is highly accurate, and bulk reconciliation features save significant time. Advanced rules can automate recurring transactions.
Zoho Books provides solid bank reconciliation with feeds from major banks and financial institutions. While not as extensive as Xero's network, it covers most popular banks and offers intelligent transaction matching with manual override capabilities.
Xero provides basic tools for inventory tracking, allowing users to manage product codes, quantities, and average costs. But it does not offer built-in features like multi-warehouse management, reorder points, or bundling options. To get these advanced capabilities, businesses often rely on third-party tools such as Webgility.
Zoho Books excels at inventory management in its Elite and Ultimate plans. It includes features like multi-warehouse tracking, reorder points, composite items, and serial or batch tracking. When combined with Zoho Inventory, it becomes a powerful solution for ecommerce and wholesale businesses managing stock across multiple locations.
Xero helps users automate tasks like setting up recurring invoices, bills, bank transactions, and journal entries. This works well for managing subscription billing or handling regular expenses such as rent or utility payments.
Zoho Books offers similar automation for recurring invoices, expenses, and bills. You can also automate retainer invoices, which is useful for service businesses.
Use case example: A design agency billing clients monthly can auto-generate invoices on the 1st of each month, avoiding missed or delayed billing using either Xero or Zoho Books.
Xero includes automatic email reminders for overdue payments. Users can adjust when reminders go out (e.g., after 3, 7, or 14 days), personalize the message, and decide how often to send them.
Zoho Books provides similar automation with advanced customization, including language localization and reminder scheduling at multiple stages, before due, on due date, and after due.
Use case example: A small business can automatically nudge clients for payment without manual follow-up, improving cash flow using either Xero or Zoho Books.
Xero offers limited AI-driven automation like suggesting bank rule matches, auto-categorization of expenses, and smart reconciliation based on transaction history. However, these features are basic and not predictive or learning-based.
Zoho Books provides rule-based automation such as expense categorization and smart matching of transactions, but lacks advanced AI or ML-driven insights at this time.
Use case example: A growing SMB can leverage Xero’s AI-driven bank reconciliation that uses historical transaction patterns to automatically match ambiguous payments lacking clear references, such as generic “CARD PAYMENT” entries, to the correct invoices or bills.
Xero's app marketplace is its crown jewel, featuring over 1,000 verified integrations spanning every business function imaginable. Popular connections include:
The marketplace includes both free and paid integrations, with most offering seamless data synchronization and automated workflows.
Zoho Books' strength lies in its native integration with the comprehensive Zoho suite of multiple applications. Key connections include:
Outside the Zoho ecosystem, the platform offers 1000+ third-party integrations and covers all essential categories like payment processors, banks, and popular ecommerce platforms.
Xero delivers standard financial reports (P&L, balance sheet, cash flow) with real-time generation and professional formatting ideal for accountants and investors. Advanced features include budget comparisons and project profitability analysis.
Zoho Books provides core financial reports plus visual dashboards that make data accessible to non-accountants. Reports can be scheduled for delivery, and integration with Zoho Analytics enables custom reporting and predictive analytics.
Both platforms allow for customization, but Xero's approach focuses on modifying existing report templates, while Zoho Books (especially when paired with Zoho Analytics) offers more flexibility in creating entirely custom reports and interactive dashboards.
Modern U.S.-based businesses, especially ecommerce sellers, remote-first companies, and those with global customers, require robust tools to handle cross-border transactions, maintain clean audit trails, and ensure tax compliance.
Xero and Zoho Books both offer capabilities in this space, but their strengths vary depending on your specific needs:
| Feature | Xero | Zoho Books |
| Multi-Currency Support | ✅ Yes – Real-time exchange rates for invoicing, payments, and reporting. Built-in from all paid plans. | ✅ Yes- Automatic exchange rate updates. Included from Professional plan upward. |
| Sales Tax Automation | ✅ Yes – Advanced, including U.S. state-wise sales tax, VAT, GST, and automated tax calculations with filing support in some regions. |
✅ Yes – Basic U.S. sales tax configuration plus strong regional VAT/GST compliance in countries like India, Australia. |
| Compliance Tools & Audit Trail | ✅ Yes – Comprehensive audit logs, user roles and permissions, detailed user activity tracking. | ✅ Yes – Full audit logs with detailed user-level permissions and controls. |
| E-invoicing Capabilities | ❌ Limited- Xero has some e-invoicing features but lags in invoice validation and tracking tools, especially where mandatory e-invoicing is required by law. |
✅ Yes – Offers invoice validation, tracking, and compliance tools suited for e-invoicing mandates in certain countries. |
Mobile apps: Both support invoicing, expense logging, and basic reporting on iOS and Android.
Let’s break down how Xero and Zoho Books stack up across their respective pricing plans:
| Plan Tier | Xero | Zoho Books |
| Free | ❌ Not available | ✅ Free for businesses with < $50K revenue |
| Entry Level | Starter – $2.90/mo | Standard – $15/mo |
| Mid Tier | Standard – $4.60/mo | Professional – $40/mo |
| Advanced Tier | Premium – $6.90/mo | Premium – $60/mo |
| Users Included | Unlimited on all plans | 1–10 users depending on plan |
| Free Trial | ✅ 30 days | ✅ 14 days |
| Add-ons | Projects, Expenses, Gusto Payroll | Zoho Analytics (Ultimate), Zoho People etc |
Value per feature: Zoho wins on price; Xero wins on depth and flexibility
| Channel |
Xero |
Zoho Books |
| Live chat | ✅ Yes, available 24/7 | ✅ Yes, available 5 days a week |
| Email support | ✅ Yes, 24/7 coverage | ✅ Yes |
| Phone support | ✅ Available but with limited hours depending on region/time zone | ✅ Available, support hours depend on region and plan |
| Help center |
Rich documentation with tutorials, guides, and FAQs |
Rich documentation with detailed help articles and user guides |
| Community | Larger, well-established global user base with active forums | Smaller but active community, especially within Zoho ecosystem |
You sell on multiple ecommerce channels like Amazon, eBay, Walmart, Shopify, and POS systems, Webgility enhances platforms such as Xero by consolidating sales data from these marketplaces into clean, organized accounting records. Webgility automates the import of orders, refunds, fees, taxes, and inventory data from your sales channels directly into Xero, eliminating manual data entry, improving accuracy, and enabling real-time financial clarity and streamlined reconciliation processes.
Benefits include:
This combination is particularly powerful for businesses that have outgrown basic ecommerce integrations but aren't ready for enterprise-level ERP systems.
When it comes to Xero vs Zoho Books, there’s no one-size-fits-all answer because your ideal platform depends on your unique business needs, sizes, and operational complexities:
| Business Type | Recommended Platform | Key Reasons |
| Freelancers & solopreneurs | Zoho Books | Free plan covers most needs, simple interface |
| Startups (1-5 employees) | Zoho Books | Cost-effective, easy onboarding, scalable within Zoho ecosystem |
| Growing SMBs (5-20 employees) | Xero | Unlimited users, extensive integrations, scalability |
| International businesses | Xero | 160+ currencies, real-time exchange rates, strong global tax/compliance features |
| Ecommerce businesses | Xero (+Webgility) | Best-in-class ecommerce integrations, advanced reconciliation, multi-channel support |
| Service businesses | Xero | Superior project/time billing integrations, flexible workflows |
| Product-based businesses | Xero | Powerful inventory management through best-in-market integrations |
| Zoho ecosystem users | Zoho Books | Seamless integration with Zoho suite, unified data and workflows |
Here’s the secret: While Xero and Zoho Books handle your accounting, Webgility handles everything between your storefronts and your books, syncing orders, reconciling fees, updating inventory, and keeping you compliant.
Don't just choose accounting software. Choose a complete ecommerce accounting system by getting access to:
Webgility works well with Xero. Connect both platforms today and save hours each month while reducing costly errors.
Xero offers 24/7 support across all channels with faster response times backed by a larger community of certified accountants and extensive self-service resources, while Zoho Books typically provides 5 days phone and chat support.
Both platforms are free to set up. Xero charges extra for add-ons like Projects and payroll integrations. Whereas, Zoho Books includes most features in base plans but charges for additional users and premium add-ons.
Xero has extensive integrations with ecommerce platforms like Shopify, Amazon, eBay, Walmart, and Etsy. One prominent ecommerce automation platform connected with Xero is Webgility, which automates syncing orders, fees, taxes, and inventory across multiple sales channels directly into Xero.