Xero verses Quick Books, but who’s the winner?

I have a few clients who’s year end's are at the end of December, so I have been spending time aligning their financial paperwork to prepare all that’s needed to hand over to the Accountants. Some of my clients use Xero for their finances, and others use QuickBooks, both of which have some great features but which is the better of the two? 

The answer, well it really all depends on how you like to manage your finances and at what stage you’re at with your business as to which would be the better fit. Read on to find out more about the differences…

Accessibility - both are web-based platforms so you can always login into them easily wherever you are, from phone or desktop. UX – my personal preference when it comes to offering a clear user experience would be Xero. Xero has a great, user friendly interface. It is easy and straight forward making it easy to find your way around. QuickBooks is a little more complicated and takes more time to work your way around however I believe that this because is a little more to the software. Once you crack the basics, you’re mind will be opened to the possibilities that QuickBooks has to offer your business. 

Invoicing – predominately, they both offer similar functionality when it comes to invoicing, however when you start delving into the detail, you will notice a few differences that may sway you to choose one over the other.Invoice customisation – Xero involves you uploading an invoice template whilst QuickBooks allows you to customise a template in it’s software which saves a lot of time and ensures all is consistent across your finances. 

Payment reminders – Xero’s reminder settings applies to all customers, whereas QuickBooks lets you pick and choose who you want to send it to giving you more flexibility. Payment processing – QuickBooks has the payment links and processing integrated into the software meaning you don’t have to set anything up yourself, whilst Xero requires you to sign up to an external provider like Paypal or GoCardless. 

Bills - both softwares allow you to convert purchase orders into bills once fulfilled.Paying regular expenses can be automated across both softwares, however it’s only made available in QuickBooks when you opt for the higher pricing plan. If expenses is a priority, Xero may be a better choice for you. Setting up reoccurring bills is again easier in Xero and can be done in various ways under the ‘Purchases’ section. With QuickBooks, you are required to set it up via the banking register, which involves a few additional steps so set aside some extra time for this.When reporting bills, I have found it easier in Xero as they are all shown in upcoming bills, whereas with QuickBooks, they only appear on expenses paid.

Reporting - both platforms offer access to the core financial statements like aged payables and receivables, P&L and balance sheets. One of the features from Xero is they offer an equity statement which is useful if the business has several investors. QuickBooks however provides a deeper insight when it comes to financial reporting. You are able to navigate further throughout the report, rather than having to come out and look at certain details via a different route, which happens in Xero. This is one of the overriding benefits of QuickBooks. 

Pricing – both programs have different payment options that are shown in the form of tiers. They are not exactly comparable so be mindful that you are not comparing like for like. Xero is a little more limited at the lower price point tier compared to QuickBooks, but the benefits even out across the top tiers. One of the major differences between the two is that QuickBooks has a built-in payroll processing, while Xero integrates with various apps, which comes at an additional cost. 

Advanced functions – Xero has built in fixed assets modules which save you time while QB doesn’t and need to be done manually.

So who’s the winner? 

Xero is a great platform for a smaller business that wants to have the support of a professional software that manages receipts, invoices and expenses. For businesses that are wanting to get more from their financial reporting and payroll, QuickBooks would be my recommendation due to extensive possibilities that it offers at a set cost. Review what you want to get from your accounting software, where you want to take your business and the budget available and hopefully the insights above will help with you making the right decision for you.