When you start a business, you have to make crucial decisions, especially about business finances. A key to managing your finances effectively and efficiently is to choose the right accounting software. That is why the Irazu Advisors continuing education team has decided to do a deep dive on which is the best online accounting software, because bookkeeping and accounting should not be complicated, expensive or time consuming.
With the advent of cloud accounting, small businesses can run day-to-day operations with much ease. Choosing the right cloud accounting software can be extensive, as so many options are available.
Furthermore, it also depends on your needs, your budget, and what features you would want. QuickBooks Online and Xero are the two leading players in the cloud bookkeeping software market.
Both accounting systems are comprehensive tools that offer robust features, ease of use, and flexibility. How to choose the right one? Let’s find out!
The setup process is one of the major differentiating factors between QuickBooks Online and Xero. The setup process of QuickBooks Online is very simple with minimum steps. Getting started is quick, and the software provides additional guidance and details only when required. Prompt beginnings and hassle-free procedures of maintaining accounts make QuickBooks Online the choice of many beginners and professional accountants.
On the other hand, Xero’s setup process is very structured, which means that you might have to go through several steps during the entire process of maintaining accounts. The process may seem tedious and daunting. QuickBooks Online wins here as it simplifies the setup process for users.
At Irazu Advisors we have Accounting Software Setup Services if you are just starting business operations and need help setting up your accounting software or if you are migrating from one system to another, don’t waste valuable time and resources setting up accounting systems, we can do that for you.
Both bookkeeping systems offer robust features and in Irazu Advisors we use both! (Yes, you read right). However, in some categories like project management, invoicing, and lending, QuickBooks Online is more extensive and helpful than Xero. QuickBooks Online provides excellent invoicing features with several templates to choose from along with built-in packing slips. Xero has one standard invoice template that you have to install and then import the packing slip template into the accounting software. Moreover, Xero lacks the lending service feature.
Although Xero is better than QuickBooks Online in contact management, but today, most of its advanced features are exclusive to its expensive premium plans. These premium plans are not very pocket-friendly and might not be the choice of many businesses.
So, if you’re looking for a package with all essential features, QuickBooks Online would be your pick.
An ideal accounting software must have the ability to integrate with other applications. Integration with applications enhances software functionality tremendously.
Xero allows integration with more than 700 applications across varying categories like payroll, inventory, CRM, e-commerce, point of sale, and time tracking applications. Payment applications like PayPal, Stripe, and GoCardless are also compatible for integration with the software.
The Xero accounting software lets you integrate with many applications, regardless of their essentiality- which makes QuickBooks Online the ideal choice for a small scale business. It permits integrations with only the most essential and vital applications from multiple categories.
The pricing of both bookkeeping systems is quite similar. Regardless, let us have a look at the features and services offered in different packages.
QuickBooks Online Packages
Simple Start: $12/month for 1 user
Essentials: $20/month for up to 3 users
Plus: $35/month for up to 5 users
Advanced: $75/month for up to 25 users
All packages of QuickBooks Online comprise invoicing, income and expense tracking, estimates, payment acceptance, sales tax tracking, etc. When you move towards the ‘Plus’ and ‘Advanced’ plans, you will get access to faster invoicing and custom user permissions. However, all packages provide you with the necessary features to fulfill the accounting needs of your business.
Early: $9/month per user
Growing: $30/month per user
Established: $60/month per user
The early package allows limited use, such as making five bills and sending only five invoices. The ‘Growing’ and ‘Established’ plans allow unlimited functionality.
QuickBooks Online is the clear winner. As your business grows, you would want the scalability that QuickBooks Online offers. All plans are flexible and provide more features than Xero.
At Irazu Advisors we know that having the correct bookkeeping and accounting software will completely change the way you run your company.
The champion? Without a doubt QuickBooks Online is an overall champion! QuickBooks Online is an excellent accounting software that has the edge over the others with its unique lending and automated invoicing features. Its mobile app is also user-friendly and helps you to manage your business accounting on the go.
Nevertheless, Xero is also an impressive software. However, recent changes in its pricing structure and a steep learning curve cannot match the features that QuickBooks Online provides.