QuickBooks Online and Xero are small businesses' most popular accounting software options. But choosing between them can be difficult, especially if you’re starting to do your research.

This guide should help with that. It covers the key differences between QuickBooks and Xero to help you zero in on the better option for your company’s needs and preferences.

So, without further delay, let’s get into it.

QuickBooks Online vs. Xero: Company Info and Overview

QuickBooks Online

QuickBooks is the world’s leading accounting platform, with more than 5.3 million users worldwide. It was launched in 1983 and has industry-wide recognition, meaning accountants know it well, and many kinds of software integrate with it.

Xero

Xero is a newer accounting software option, but it’s growing quickly. It has more than 3 million subscribers and offers some compelling plan options that will appeal to certain kinds of small business owners.

What’s the difference between QuickBooks and Xero?

There are a few key differences between QuickBooks and Xero that you should know before choosing one over the other. Here are the most important ones for small business owners.

Xero Allows Unlimited Users

One of the best features of Xero is the ability to add an unlimited number of users to your account dashboard.

No matter how many people in your organization or outside of it need to access your accounting portal, you’ll be able to provide them with that access if you choose Xero.

QuickBooks scales up the number of users you can have on your account as you pay a higher monthly fee. For example, the Simple Start Plan only allows 1 user and 2 accounting firms, whereas the Advanced Plan offers 25 users access and 3 accounting firms.

QuickBooks delivers best-in-class scalability

A significant benefit of QuickBooks Online is that you get access to more advanced reporting features as you pay for more expensive plan options.

This means you can start with the lowest-tier QuickBooks plan and then increase your monthly payment when you need more features instead of moving to a new platform to access those advanced features.

Scalability becomes more straightforward to achieve with QuickBooks than on other accounting platforms because of plan options like this.

QuickBooks offers better reporting features

QuickBooks gives you access to some of the most advanced reporting features in the industry. As your company scales, you’ll be able to run increasingly complex reports to generate more profound insights into your company’s financial status.

To give you some insight, you can use QuickBooks to generate reports based on:

• Accounting period
• Client
• Vendor
• Contract
• Email
• Primary Person
• Phone
• And much more

Xero’s most advanced plan offers some solid reporting options. But you’re not going to be able to generate the same level of insights into your company’s financial status as you would be able to if you were using QuickBooks Online.

QuickBooks is Better for Time and Mileage Tracking

QuickBooks gives you the option to start tracking mileage from its lowest-tier plan. All users who pay for at least the Essentials Plan will be able to track time for projects in their accounting dashboard.

Xero only gives these capabilities to users who pay for its most advanced plan option, which costs upwards of $65 per month.

QuickBooks Offers Phone-based Support

Both QuickBooks Online and Xero offer 24/7 online support. But QuickBooks also has a customer service phone number that you can call during standard business hours if you prefer speaking with someone directly.

Xero says it will call you if you’re a customer and you reach out with your phone number. But you aren’t able to contact them over the phone yourself. You have to wait for them to call.

Xero Offers More Affordable Inventory Management

Xero is a more affordable option for small business owners looking for inventory management assistance. The popular accounting software offers inventory management support with all of its plans.

QuickBooks also offers inventory management assistance, but only with its Plus Plan, which costs $85/month.

When to Choose QuickBooks

In our estimation, QuickBooks Online is the better choice overall. It wins on each of the following features:

• Reporting complexity
• Transaction tracking options
• Accountant invites
• Customer service
• Expense reports
• Integrations

When you put it all together, you get an extremely robust accounting service that will scale with your company and integrate with most of the other software you use to manage your business.

This is why most small business owners should choose QuickBooks Online over Xero. It only makes sense to select Xero instead if you fit into certain specific criteria, which we’ll cover in the next section.

When Xero Makes More Sense

Xero is a better option than QuickBooks only if you have specific accounting needs that fit well with its stand-out features.

For example, if you run an established small business with many users who need access to your accounting software, Xero will be better for you since it accommodates unlimited users for a base plan price.

Similarly, Xero may be the better fit for your small business if you also need help with inventory management. With Xero, you get inventory management support and integration features without paying for a monthly premium plan.

Finally, Xero may be a better option if you’re looking for a budget accounting platform. Its plans start at just $12 per month, whereas QuickBook’s cheapest plan is $30 per month.

The Bottom Line on QuickBooks vs. Xero: Which Should You Choose?

The truth is that both QuickBooks Online and Xero are perfectly good accounting platforms for small business owners. QuickBooks does enough things better than Xero to make it our top pick for most business owners.

But if you’re looking for a low-cost plan option, help with inventory management, or the ability to add unlimited users to your account, Xero could be a better selection.