When it comes to keeping your business finances in check, choosing the right accounting software is more than just a tech decision – it’s a long-term investment in how smoothly your business will run. Whether you’re just starting out or looking to upgrade your current system, two names tend to pop up time and time again: Xero and QuickBooks.
Both are popular cloud-based accounting platforms, both offer solid functionality, and both are trusted by thousands of small businesses across the UK. But when it comes to the difference between Xero and QuickBooks, which one is the better fit for your business?
Let’s take a look at how these two stack up.
What is Xero?
Xero accounting software is a cloud-based platform designed with small businesses in mind. It’s known for its intuitive interface, mobile accessibility and powerful integrations. Xero offers everything from invoicing and payroll to bank reconciliation and VAT submission, and it’s always evolving with new features.
At 360 Accountants, we’re proud to be a certified Xero accredited provider (which means we’re specialists). We’re proud to use Xero to streamline business finances and give clients better visibility over their numbers. That said, we also work with QuickBooks, so let’s give it a fair comparison.
What is QuickBooks?
QuickBooks accounting software has been around for years (initially as a desktop solution) and is another strong contender in the small business world. Owned by Intuit, QuickBooks software offers robust functionality that covers bookkeeping, payroll, reporting and tax tracking. It’s particularly popular with freelancers, sole traders and growing businesses.
Like Xero, QuickBooks accounting is cloud-based, meaning you can access your data anytime, anywhere. It also has a range of plans to suit businesses at different stages.
Xero Vs QuickBooks: Key Comparisons
Ease of Use
Both platforms are user-friendly, but in slightly different ways. Xero has a clean, modern layout that many users find intuitive, especially those new to accounting software. QuickBooks, meanwhile, offers more dashboard customisation, which can be handy for those with specific preferences.
Locking Periods
It is easy to lock periods (prevent postings once a period is finalised) in both Xero and QuickBooks. It is also fairly straight-forward to unlock a period (provided the user has the correct admin privileges), although we think the requirement to input a password into QuickBooks could be an advantage.
Lock Dates in Xero
Lock Dates in QuickBooks
Correcting Errors
We think it is easier to make corrections in QuickBooks as you can edit any field on a transaction when you have it open. Whereas in Xero, if a bill or invoice already has a payment applied to it, you can only amend certain fields. For example, if you wanted to amend the VAT rate on a specific transaction you have open, you would have to remove the payment, make the amendment and then apply the payment.
To get around the Xero issue above, you can use find and recode which is a useful tool for editing transactions in bulk. The version of this in QuickBooks is called reclassify transactions.
Find and Recode in Xero
Correcting Errors in QuickBooks
Searching for Transactions
In our opinion, the search function for finding transactions is more user-friendly in QuickBooks.
Overall, smaller limited companies and sole traders with smaller volumes of transitions to process each month may find QuickBooks more user-friendly to manage on their own. However, larger companies with more information to process might benefit more from a Xero package and the features below.
Features
Both Xero and QuickBooks cover the essentials – invoicing, bank feeds, expense tracking and VAT reporting. That said, there are a few feature differences:
- Xero includes unlimited users in all plans, while QuickBooks charges per additional user.
- QuickBooks offers a mileage tracking feature that’s ideal for sole traders on the go.
- QuickBooks has a really handy bank reconciliation feature. It allows you to input the bank balance from a bank statement and reconcile it against the QuickBooks balance and will easily identify any differences.
- QuickBooks can be more efficient for bulk reconciliations due to the option of being able to tick multiple bank statement lines and reconcile them in one go.
- Xero has a useful add-on called HubDoc. This is great for inputting invoicing and receipts into Xero and keeping copies of digital records which helps companies adhere to Making Tax Digital.
Integrations
Xero connects with over 1,000 third party apps, from ecommerce platforms to CRM tools. QuickBooks also integrates with a wide range of tools, but the ecosystem isn’t quite as extensive.
In our opinion, Xero offers stronger integrations. For example, there are lots of integrations which may benefit e-commerce businesses, such as integrations with Shopify and DEAR inventory. The Xero connections are more seamless and customisable.
QuickBooks still integrates with Shopify and DEAR but the integration is not as strong and some users have experienced lagging or duplication issues and there is often more manual intervention needed.
Xero’s Integrations
Support & Training
Both offer online support, community forums, and extensive help articles. Xero also provides regular webinars and training for users. As a trusted platinum Xero partner, 360, Chartered Accountants can also be on hand to offer support and guidance. We offer in-house Xero training for clients who are new to XERO or would like a refresh
Are There Any Limitations?
Every tool has its downsides, Xero and QuickBooks are no exception. Depending on your business, one platform’s limitations might be a dealbreaker.
We think it may be easier to make a mistake on QuickBooks due to it being very easy to amend something, which could lead to accidental errors. Whereas in Xero, when transactions have been marked as paid, you are limited to what you can amend.
So, Xero or QuickBooks – Which Should You Choose?
The big question: Xero or QuickBooks?
If you’re growing a business with multiple users and you’re looking for a streamlined, modern interface with excellent support, Xero accounting software might trick more of your boxes. Especially if you’re looking to work with accountants who know it inside out (like we do!).
On the other hand, if you’re a freelancer or sole trader looking for something quick and easy, QuickBooks software could be just the ticket.
Ultimately, the difference between Xero and QuickBooks lies in the details – and in what matters most to your business. Budget, features, user access, integrations – they all play a part.
Need a Hand Deciding?
Whether you’re leaning towards Xero or QuickBooks, we’re here to help you make the right choice. At 360, Chartered Accountants, we support both platforms and can guide you through set-up, training, and provide ongoing support. Get in touch if you’d like to chat through your options – no jargon, no pressure, just straight-talking advice tailored to your business.
