A U.S. Bank research conducted by Jessie Hagan indicated that 82 percent of all businesses fail due to poor management of their cash flow. It is, therefore, wise to look for effective accounting solutions.
As a business owner, there are various decisions you have to make in regards to the finances of your company. One critical choice is finding ways to makes your accounting processes simple.
The best way forward is by making use of the right online accounting software.
Cloud-based accounting is making waves in the business sector. According to research by Accounting Today, 58 percent of large companies use the platform. The number of businesses relying on cloud technology is expected to rise to 78 percent by 2020.
Both Xero and QuickBooks online contain features that are similar to operate. However, you need to consider your business requirements to make a decision on Xero vs Quickbooks.
If you want an online accounting software that you can set up on your own, use QuickBooks Online. It contains an ecosystem made of 50,000 certified Pro Advisors. Therefore, finding local help to help you with setting up the software is effortless.
They also have online chat support as well as a customer service line.
Xero provides you with an affordable way to process payroll for businesses with less than ten employees. You can also add more users to the platform without any charge.
Unfortunately, it lags when it comes to ease of set up. The software has 400 certified advisors only in the U.S., making it difficult to find an accountant that has in-depth knowledge of Xero.
Pricing and Features
Both Xero and QuickBooks Online have very similar properties when it comes to pricing and features.
QuickBooks Online has three pricing plans. All three payment plans allow you to connect your credit card and bank details so that you can download your financial data with ease. They also can manage the accounts receivable.
These pricing plans include:
Quick Books Simple Start
QuickBooks Simple Start is a pricing option made for use by startups that settle their bills using credit cards or through online financial institutions. It runs for $20 per month.
QuickBooks Online Essentials
The Online Essential plan is for use by both small and large scale service businesses that process large accounts payable and receivable. It also helps you track the working hours of a job or project.
You can only have three users and two accountants. The monthly fee is $40.
QuickBooks Online Plus
Online Plus is ideal for use by small and big businesses that need to make purchase orders, track sales, and create a receipt inventory. Also, it is the only plan you can use to do 1099 reporting if you have 1099 tax category employees.
Xero Pricing Features
Xero has three pricing features that range between $9 and $60 per month. These three plans include:
Xero Early Plan
The starter plan is limited to a connection with only one bank or credit card. It can manage the accounts receivable but has a limit on managing the accounts payable. However, you can still use it to track income and expenses.
Xero Growing Plan
The growing plan is ideal for use by businesses that provides products and services, and have employees and 1099 contractors in need of pay. It has monthly pricing of $30.
Xero Established Plan
The premium plan of Xero is suitable for businesses that operate on a global level. You can use it to create invoices. Also, you can use it to pay your suppliers in foreign countries and using their native money.
Ease of Use
Both Xero and Quickbooks Online are user-friendly. You can use both programs to perform several company file setups. However, it is easier for someone without any accounting knowledge to operate QuickBooks than Xero.
You need to have some accounting knowledge to understand some areas like the chart of accounts in Xero. Even so, it contains support tools that can make your work easier.
Both platforms have a colorful homepage that is easy to navigate. The dashboard for QuickBooks gives you a clear picture of every aspect of your business.
When you log in to Xero, the data that first greets you is your bank accounts insight, balances in your accounts receivable, and accounts payable. Better yet, Xero uses a very simple to understand language, unlike QuickBooks.
The Xero menu bar is at the top of the screen, whereas for QuickBooks it is on the left side of the screen.
QuickBooks provides its clients with live customer care support through chat or telephone. You can find this in all their pricing plans without extra costs. For Xero, you have to contact the support team by sending them an email.
One of the most significant advantages to using a cloud accounting software is the ability to connect and work with third-party software. Both platforms can integrate with financial institutions and allow fast downloads of your banking and credit transactions.
QuickBooks Online can integrate with more than 600 apps, a majority of which you can find in the QuickBooks Apps store. It also has its credit card processing services called QuickBooks Payments that easily connects to QuickBooks Online.
Xero, on the other hand, can connect to more than 700 apps. It does not have a payroll or a credit card processing service. You can, however, use Gusto to handle your payroll as it seamlessly integrates with Xero.
You can use more than 30 different services such as PayPal, Square, and Stripe to process your credit card.
The Xero VS QuickBooks Determiner
As a business owner, the last thing you need is an accounting software that does not meet your needs. With the above vital differences on Xero vs QuickBooks, you have enough to go by when choosing the platform better suited for your business.
At a glance, QuickBooks may appear to be the winner. However, the requirements of every business are different. So, you should make your decision based on what your company needs.
If you are, however, not convinced that your business needs Xero or QuickBooks Online, the market has many other alternative service providers that can choose. Contact us today to get more information on how you can manage your cash flow.