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Xero vs QuickBooks: Which Fits Your Business Better?

Accounting and Software

Lucile Borgne

Jul 29, 2021


Xero vs. QuickBooks: SummaryMain Differences Between Xero and QuickBooksWhen to Choose Xero vs. QuickBooks

We can’t stress enough that choosing your accounting software is, at its heart, a business decision. 

That’s because your accounting processes provide the information people like your CEO, and sales and marketing leaders need to make decisions to move the business forward. The right solution supports business needs as a whole, not just the finance team or bookkeepers.

That said, we don’t want you to fret over choosing accounting software!

When you’re a small business just getting started, don’t overspend on complex accounting software right upfront. Keep your solutions and processes simple and straightforward to start, and be prepared to make the switch to a more robust and costly solution as you grow.

The dominant business accounting software solutions for folks just getting off the ground are QuickBooks (by Intuit) and Xero.

These solutions offer basic accounting functions for small and medium-sized businesses, with integrations and basic customization to add more functionality without adding too much cost as you grow.

Overall, QBO and Xero are very similar, and if you don't need any specific functionality that one or the other doesn't have, we suggest you choose based on the location of your business.

Xero vs. QuickBooks: Summary

The main difference in choosing between Xero and QuickBooks is geography. Which is best for you depends for the most part on where your company is located and where you do business. Indeed, each solution is set up to comply with accounting standards and regulations of different regions.

Xero is a New Zealand-based company that’s usually best for companies based in the U.K., Australia, New Zealand, and the APAC region. 

QuickBooks is based in the U.S. and is best for U.S. and Canadian companies.

Between the two, QuickBooks is a slightly more basic accounting tool. Xero is just a little more advanced in multi-currency support, reporting for multiple entities, and payment integrations. But, overall, the two solutions offer very similar features and functionality.

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Main Differences Between Xero and QuickBooks

Standards and Compliance

Because they cater to companies in different global regions, Xero and QuickBooks specialize in meeting different standards for accounting and financial reporting.

  • GAAP: U.S. accounting rules are set by the Financial Accounting Standards Board (FASB). Organizations in that country follow Generally Accepted Accounting Principles (GAAP), which set a standard for financial reporting across organizations. GAAP is integrated into QuickBooks accounting processes.

  • ASPE: In Canada, businesses follow a set of standards called Accounting Standards for Private Enterprises (ASPE). QuickBooks also integrates with ASPE accounting.

  • IFRS: The International Accounting Standards Board (IASB) sets standards for global accounting called International Financial Reporting Standards (IRFS). The organization is based in London, and IFRS accounting is used by most countries across the world, excluding the U.S. and Canada. Xero supports IFRS accounting (as well as GAAP-compliant reports).


QuickBooks and Xero offer similar basic, user-friendly accounting features, with a few differences that cater to their base regions. A key difference in their feature offerings is that Xero standard subscriptions include many features and integrations that QuickBooks charges extra for.

Unique Xero Features

Xero Accounting is a New Zealand–based company that caters to small and medium-sized businesses in the APAC region, especially the U.K. and Australia. Because of its international focus, it offers support for multiple currencies, which is less robust in QuickBooks.

Xero also offers slightly more refined functionality, including the ability to sync bank transactions for automatic bank reconciliation. 

For tax support, Xero integrates with the international tax software Avalara.

Unique QuickBooks Features

QuickBooks is a basic accounting tool based in the U.S. It caters to small and medium-sized businesses, startups, and more. You get basic bookkeeping services, plus easy integrations with more than 650 widely used business tools as your business grows, with popular add-ons for payment processing, accounting, CRM, and project management.

QuickBooks integrates with U.S.-based tax services like TurboTax and specializes in tax support for U.S. tax returns and estimated payments required by the IRS. It also supports mileage and/or employee GPS tracking for reimbursement or tax reporting. 


Xero and QuickBooks both offer monthly subscriptions with pricing plans in the same ballpark, and each offers an add-on option for payroll.

Xero Pricing

  • Early Plan: $11 per month, for freelancers, solo entrepreneurs, and brand-new small business owners. Get support for basic accounts receivable and payable functions, including the ability to send up to 20 invoices per month and enter five bills. 

  • Growing Plan: $32 per month, designed for growing small businesses. Get unlimited invoicing and bills.

  • EstablishedPlan: $62 per month, designed for established businesses. Get support for multiple currencies, project tracking, expense claims, and advanced analytics.

Xero doesn’t have built-in payroll functionality, but you have the option to add on Payroll with Gusto for an additional $39 per month on any plan.

QuickBooks Pricing

QuickBooks offers both a desktop software download or cloud-based solution called QuickBooks Online. QuickBooks Online offers these pricing plans:

  • Self-Employed Plan: $15 per month, designed for freelancers. Get basic features, including invoicing and expense tracking, payment processing, estimating quarterly taxes and simple reporting.

  • Simple Start Plan: $25 per month, for small businesses with contractors. Send invoices and estimates, and access the ability to track sales, revenue and expenses, plus keep track of cash flow and sales tax. 

  • Plus Plan: $70 per month, for businesses with small teams of employees. Add the ability for employees to track time through the QBO app, inventory management and bill pay, with access for a limited number of users and up to five managers.

  • Advanced Plan: $150 per month, for SMBs who want personalized support and advanced reporting. Get access for up to 25 users.

QuickBooks Payroll Pricing

QuickBooks Payroll is available as an add-on to any QuickBooks plan, or you can purchase it separately. It lets you manage W-2 and 1099 employees, administer benefits like 401(k) and health care, and set up direct deposit.

  • Payroll Core: $45 + $4 per employee per month. Manage payroll and benefits for employees and contractors.

  • Payroll Premium: $75 + $8 per employee per month. Access workers comp administration, time tracking through the mobile app, and same-day direct deposit for your employees.

  • Payroll Elite: $125 + $12 per employee per month. Get a personal HR advisor and priority customer support.

QuickBooks also offers an add-on for QuickBooks Commerce, a platform to manage e-commerce listings and inventory.

When to Choose Xero vs. QuickBooks

Don’t spend too much time comparing features between Xero and QuickBooks. Xero might have slightly more refined capabilities, but you’re still better off choosing the solution that’s set up to comply with your local tax needs and accounting standards.

If you start a business in the U.S. or Canada, start on QuickBooks. If you start a business in the U.K., Europe, or APAC region, start on Xero.

As your business grows — especially if you expand into other countries — you might be ready to make the switch to a more robust solution like NetSuite, which you can transition to from either software.

Want to know more about your options for accounting solutions? Check out our report compiled by studying more than 500 companies: Overview of Invoicing Solutions for B2B SMBs in the US.

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