More than 3.5 million users all over the globe use Xero to manage their billing and invoicing each month. In this Xero accounting software review, we’ll break down the pros and cons to help you figure out whether Xero is the right accounting tool for your needs. Luckily, both providers offer 30-day free trials (though if you opt for QuickBooks’ free trial, you won’t get the pricing strategy typical 50% off discount the company offers new users for their first three months). You can take both software programs for a test drive before you commit to one over the other. Plus, unlike many of its competitors, Xero includes inventory management with every plan—with QuickBooks, you don’t get inventory tracking unless you’re paying $80 a month for the Plus plan.
QuickBooks Online
This is a serious drawback if you want to be able to pick up the phone and talk through an issue or are new to accounting software and have lots of questions. Set up bank feeds from your accounts so transactions are imported securely into the Xero accounting software each business day. Xero is a powerful online accounting software solution for small businesses.
Payroll integration with Gusto
Xero is suitable for many markets, such as e-commerce, IT, legal, and retail. It also comes with a multi-currency feature, which makes it a good solution for online sellers that sell their products globally. Plans are affordable, starting at $13 per month, but no free plan. Xero has been nicely put together and if, for example, you choose to try out their demo site, which can be found once you’ve registered, there’s even help as you work.
Xero Features
Other affordable, easy-to-use accounting software such as QuickBooks Online and Freshbooks have limits on the amount of users they support or charge extra for additional users. Xero supports unlimited users, which is great for businesses that have multiple team members who need to access their accounting information. Many accounting software for small businesses offer a 30-day free trial; however, Xero’s plans are less expensive than many of its competitors, starting at just $15/month. Xero often offers promotional pricing, making its plans even cheaper for business owners who take advantage of its deals.
Customer support
- Track mileage, send invoices and get a snapshot of your business cash flow with both Xero and QuickBooks.
- Can support larger small businesses with dozens of employees; highest-tier plan includes 25 users.
- †Invoice limits for the Starter plan apply to both approving and sending invoices.
- Once you’ve got your bank information in Xero, the software will help you match up your transactions for reconciliation (Figure B).
- You can assign expenses to projects, create more complex reports, and get a more accurate look at how your business is doing financially.
- All plans include invoicing, bill pay, data capture and storage, short-term cash flow tracking, tax form management, and auto sales tax.
Anything you enter will be retained when you transfer from a free trial to a subscription. Xero certainly doesn’t skimp when it comes to features and even more seem to come out of nowhere as you delve deeper into its tax brackets for 2020 2021 and 2022 caldculate tax rates hidden depths. Everything revolves around the Xero dashboard area, but we also love the easy way Xero lets you create a new part of your cloud-based experience with a simple ‘+’ button to the right of the screen.
This system allows you to manage inventory across multiple locations and channels. It integrates with Shopify and includes order fulfillment functions, shipping options and tracking information. We think this new system will prove particularly useful for larger businesses with a big e-commerce presence. Many business owners with a growth mindset prefer choosing an accounting software solution and sticking with it over the long haul. Compared to other software we reviewed, Xero stands out for meeting businesses’ needs in all growth phases. Xero allows business owners to easily customize their invoices, collect payments from multiple sources, access accounting information on the go, and more.
Otherwise, you’ll have to bump up your subscription or consider QuickBooks Online plans. Robust feature set includes thorough record-keeping, comprehensive reporting, excellent invoicing and inventory management, plus a capable mobile app. Xero and QuickBooks Online are both powerful accounting software solutions for small businesses.
You’ll find that Xero is similarly sprightly if you choose to use its app-based editions, which are available for both iOS and Android devices. In fact, the Xero experience on a tablet or smartphone seems to be generally good, especially considering its depth of data entry points. †Invoice limits for the Starter plan apply to both approving and sending invoices. Transactions initiated by app partners may automatically contribute to your invoice limit. Integrates with more than 750 apps and offers live, in-house bookkeeping add-on.
Users that are new to bookkeeping won’t be overwhelmed by Xero’s simple and easy-to-navigate layout. This layout makes the reconciliation process, among other accounting tasks, particularly easy. The software shows you potential transaction matches side by side, so you can immediately see if the match is accurate without having to click anything. Invite your advisor to work with you on the online accounts anywhere, anytime. FreshBooks charges $17 per month and QuickBooks charges $30 per month).
This is because Xero allows you to see how much each project is costing you in real time and compare that to your estimated profits. Xero is also a better option for businesses that are expanding internationally as it offers multicurrency support. Both accounting software products let users invite their accountants by email. If you’re located in the United States, though, there’s a better chance your accountant is familiar with QuickBooks Online than Xero. QuickBooks Online is an industry standard with more than 5 million users worldwide.
However, when you compare features, QuickBooks Online inches ahead for its stronger feature set, ease of sharing with accountants and customer support. However, Wave’s features are more limited than many competitors billable hours in order to keep the price low, so it may not suffice for growing businesses. If you’re on a tight budget, then check out Wave Accounting, which offers a forever free Starter plan — yes, you read that correctly!
In other words, if you need to do accounting for more than one business, you’ll need to purchase an account for each one. This is a real drawback for owners of multiple businesses or bookkeepers who work with multiple clients. Xero used to have a stand-alone payroll product, but the company has since rolled it back. Now, Xero advertises payroll with Gusto, one of our favorite full-service payroll providers.
If you want affordable cloud-based accounting with inventory tracking and expansive collaboration opportunities, Xero is your software. Sure, Xero could use a few improvements—most notably, expense tracking for its cheaper plans—but with those features at that price, you’ll be hard-pressed to do better than Xero. If you use Xero, your financial data can sync seamlessly across payroll platforms like Gusto, expense and receipt tracking software like Expensify, and ecommerce apps like Shopify. (In contrast, accounting products from Sage or Zoho sync largely with other Sage or Zoho apps, not third-party solutions.) It’s hard to find a more convenient accounting solution than that. New users can access a free 30-day trial, which doesn’t require a credit card for sign-up. We liked that the trial version of Xero is full-featured, meaning you can test it out with real data.
For example, you can reorganize the panels and keep the useful information for your business, such as total cash in and out, outstanding invoices, overdue bills, etc. Yes, the Xero accounting software price structure is different for nonprofits. The vendor offers registered charities, trusts, and societies a 25% discount on the original pricing.