Xero vs. QuickBooks
A Comparison of SMB Accounting and Finance Offerings for Accountant Partners
Xero and QuickBooks (by Intuit) are leading cloud-based accounting software platforms tailored for small and medium-sized businesses (SMBs). Both are widely recommended by accountant partners due to their robust features, integrations, and ability to streamline financial management. This article compares their SMB accounting and finance offerings, focusing on products sold through accountant partners, their respective app stores, pricing differences, and gaps in their offerings.
## Overview of SMB Accounting and Finance Offerings
Both Xero and QuickBooks provide comprehensive accounting solutions designed to simplify financial tasks for SMBs, including invoicing, expense tracking, bank reconciliation, payroll, and reporting. Accountant partners play a critical role in recommending and implementing these platforms, often providing setup, training, and ongoing support to clients. Below, we compare their key offerings relevant to SMBs and accountant partners.
### Xero SMB Accounting and Finance Offerings
Xero’s core offerings for SMBs, as sold by accountant partners, include:
- **Xero Accounting Software**: A cloud-based platform with features like invoicing, bank reconciliation, expense tracking, financial reporting, and inventory management. It supports multi-currency transactions and real-time collaboration, ideal for global businesses.
- **Xero Payroll**: Integrated payroll for select regions (e.g., Australia, New Zealand, UK, and US via Gusto integration), automating pay runs, tax calculations, and compliance.
- **Xero Expenses**: A tool for submitting, approving, and tracking expense claims, with receipt scanning and integration into accounting records.
- **Xero Projects**: Enables project-based time and cost tracking, quote creation, and invoicing for service-based businesses.
- **Xero Analytics**: Includes Analytics Plus for cash flow forecasting and advanced reporting, enhanced by the 2024 Syft Analytics acquisition.
- **Hubdoc**: A document management tool that automates bill and receipt data extraction, integrated with Xero for seamless bookkeeping.
- **Melio (Payments Platform)**: Acquired in June 2025, Melio enables bill payments and accounts payable management, particularly for the US market, with integration into Xero’s platform.
- **Xero Practice Manager (XPM) and Xero HQ**: Tools for accountants to manage client portfolios, streamline workflows, and collaborate in real-time with SMB clients.
Xero emphasizes simplicity, unlimited users across all plans, and compliance with International Financial Reporting Standards (IFRS), making it a strong fit for businesses in the UK, Australia, New Zealand, and Asia-Pacific regions.
### QuickBooks SMB Accounting and Finance Offerings
QuickBooks, developed by Intuit, offers a broader suite of products for SMBs, often sold through its ProAdvisor network of accountants. Key offerings include:
- **QuickBooks Online (QBO)**: A cloud-based accounting platform with invoicing, expense tracking, bank reconciliation, financial reporting, and inventory management. It aligns with US GAAP and Canadian ASPE, making it ideal for North American businesses.
- **QuickBooks Payroll**: A robust payroll solution with Core, Premium, and Elite tiers, offering automated tax calculations, direct deposits, and HR tools like employee benefits (Elite tier).
- **QuickBooks Time**: A time-tracking tool for employees and contractors, integrated with payroll and accounting.
- **QuickBooks Payments**: Payment processing for invoices and in-person transactions, supporting credit cards, ACH, and digital wallets like Apple Pay.
- **QuickBooks Checking**: A business banking account with no monthly fees, integrated with QBO for cash flow forecasting.
- **QuickBooks Live Bookkeeping**: Virtual bookkeeping services with certified experts for setup, reconciliation, and reporting.
- **Intuit Enterprise Suite**: A configurable ERP solution for mid-market SMBs with complex needs, integrating accounting, payroll, bill pay, and Mailchimp for marketing.
- **Mailchimp**: A marketing automation and CRM platform, integrated with QBO to leverage financial data for targeted campaigns.
- **QuickBooks Online Accountant**: A practice management tool for accountants to manage client books, access training, and collaborate via the ProAdvisor Program.
- **Intuit Assist**: An AI-powered assistant (beta) for automating receipt categorization, invoice creation, and bill processing.
QuickBooks is known for its feature-rich dashboard, advanced reporting, and widespread adoption in the US (over 80% market share). It’s favored by accountants for its familiarity and robust functionality.
## App Stores and Integrations
### Xero App Store
- **Overview**: Xero’s App Store offers over 1,000 third-party integrations, making it one of the most extensive ecosystems for SMB accounting software.
- **Key Integrations**: Includes CRM (HubSpot, Salesforce), payment processors (Stripe, PayPal, GoCardless), e-commerce (Shopify), and payroll (Gusto for US users). Recent integrations like Airwallex enhance international payments with competitive FX rates.
- **Accountant Benefits**: The vast app ecosystem allows accountants to customize solutions for clients across industries (e.g., retail, construction, real estate). Xero’s seamless integrations reduce manual work, enabling accountants to offer value-added advisory services.
- **Notable Feature**: Xero’s Hubdoc integration automates bill and receipt capture, a significant time-saver for accountants and clients.
### QuickBooks App Store
- **Overview**: QuickBooks offers over 650 third-party integrations, slightly fewer than Xero but still robust.
- **Key Integrations**: Includes direct TurboTax integration for US tax filing, CRM (Salesforce, HubSpot), payment processors (PayPal, Square), and e-commerce (Shopify). QuickBooks also integrates with Cledara for automated transaction syncing and bank feed imports..
- **Accountant Benefits**: The familiarity of QuickBooks among US accountants, combined with integrations like TurboTax and QuickBooks Online Accountant, streamlines tax preparation and client collaboration. The Intuit Enterprise Suite integrates with Mailchimp for marketing-driven financial strategies.
- **Notable Feature**: QuickBooks Payments integrates seamlessly for invoice payments, offering flexibility for SMBs and accountants managing client cash flow.
**Comparison**: Xero’s App Store has a broader range of integrations (1,000+ vs. 650), making it more adaptable for global and industry-specific needs. QuickBooks, however, excels in US-centric integrations, particularly with TurboTax and its own ecosystem (e.g., Mailchimp, Intuit Enterprise Suite), which benefits accountants serving US-based SMBs.
## Pricing Differences
### Xero Pricing
Xero operates on a subscription-based model with three main tiers (US pricing as of 2025, subject to change):
- **Early ($20/month)**: For sole traders and freelancers; limited to 20 invoices and 5 bills per month, basic accounting features.
- **Growing ($42/month)**: For small businesses; unlimited invoices and bills, includes Hubdoc and basic reporting.
- **Established ($80/month)**: For established SMBs; includes multi-currency, project tracking, expenses, and Analytics Plus.
- **Add-Ons**:
- Payroll (via Gusto in the US): ~$40/month base + $6/employee/month.
- Expenses, Projects, Analytics: Additional ~$7-$20/month each.
- Melio: Free for ACH payments; credit card fees apply (e.g., 2.9% per transaction).
- **Key Features**: Unlimited users across all plans, no per-user fees, and a 30-day free trial. Discounts may be available for annual billing.
### QuickBooks Pricing
QuickBooks Online also uses a subscription model with four main tiers (US pricing as of 2025, subject to change):
- **Solopreneur ($20/month)**: For freelancers; limited features, basic invoicing, and expense tracking.
- **Simple Start ($30/month)**: For small businesses; includes invoicing, expense tracking, and basic reporting.
- **Plus ($99/month)**: For growing SMBs; adds inventory management, project tracking, and up to 5 users.
- **Advanced ($235/month)**: For mid-market SMBs; includes advanced reporting, up to 25 users, and Intuit Assist.
- **Add-Ons**:
- Payroll: Core ($45/month + $6/employee), Premium ($80/month + $8/employee), Elite ($125/month + $10/employee).
- QuickBooks Time: ~$20/month base + $8/user/month.
- QuickBooks Payments: Free for ACH; 2.9% for card transactions, 3.4% for keyed-in payments.
- QuickBooks Live Bookkeeping: ~$200-$400/month, depending on service level.
- **Key Features**: 30-day free trial, 50% discount for the first three months on select plans, but user limits apply (e.g., 5 for Plus, 25 for Advanced).
**Comparison**:
- **Cost**: Xero is generally more affordable, with its top-tier Established plan ($80/month) significantly cheaper than QuickBooks’ Advanced plan ($235/month). Xero’s Early plan ($20/month) matches QuickBooks’ Solopreneur plan but offers unlimited users.
- **User Limits**: Xero’s unlimited user policy across all plans is a major advantage for SMBs with multiple stakeholders, while QuickBooks caps users at 5 (Plus) or 25 (Advanced), potentially increasing costs for larger teams.
- **Add-Ons**: QuickBooks’ payroll and bookkeeping services are pricier, with higher per-employee fees and additional costs for advanced features. Xero’s add-ons (e.g., Expenses, Projects) are more modular but can add up for complex needs.
- **Value for Accountants**: Xero’s unlimited users and lower pricing make it cost-effective for accountants managing multiple client users. QuickBooks’ higher-tier plans and robust US tax integrations may justify the cost for US-based accountants
## Gaps in Offerings
### Xero Gaps (Features QuickBooks Has but Xero Lacks)
- **Advanced Payroll Features**: QuickBooks Payroll offers more comprehensive payroll options (e.g., HR tools, benefits management in Elite tier) compared to Xero’s reliance on Gusto for US payroll, which lacks built-in HR features.
- **US Tax Integration**: QuickBooks’ direct TurboTax integration streamlines US tax filing, a feature Xero lacks, requiring third-party tax software like Avalara.
- **Business Banking**: QuickBooks Checking provides an integrated banking account with no monthly fees, while Xero lacks a native banking solution.
- **Live Bookkeeping Services**: QuickBooks Live Bookkeeping offers virtual expert support, which Xero does not provide directly, relying instead on accountant partners.
- **Advanced Reporting in Lower Tiers**: QuickBooks includes more customizable reporting and inventory management in its Plus plan, while Xero restricts these to the Established plan or add-ons.
- **ERP Solution**: Intuit’s Enterprise Suite offers ERP-like functionality for mid-market SMBs, which Xero lacks, making it less scalable for complex businesses.
### QuickBooks Gaps (Features Xero Has but QuickBooks Lacks)
- **Unlimited Users**: Xero offers unlimited users across all plans, while QuickBooks limits users (5 for Plus, 25 for Advanced), increasing costs for teams needing broader access.
- **Global Compliance**: Xero’s IFRS compliance makes it better suited for international businesses (UK, Australia, APAC), while QuickBooks is primarily aligned with US GAAP and Canadian ASPE.
- **Broader App Ecosystem**: Xero’s 1,000+ integrations surpass QuickBooks’ 650, offering more flexibility for global and industry-specific needs.
- **Built-in Document Management**: Xero’s Hubdoc is included in the Growing and Established plans, automating bill and receipt capture, while QuickBooks requires third-party apps for similar functionality.
- **Multi-Currency in All Plans**: Xero includes multi-currency support across all tiers, while QuickBooks restricts it to higher-tier plans (Plus and Advanced).
- **Simpler Learning Curve**: Xero’s interface is designed for users with limited accounting experience, making it easier for non-accountants to adopt, whereas QuickBooks has a steeper learning curve.
## Conclusion
**Xero** is ideal for SMBs and accountants seeking affordability, unlimited users, and global scalability, particularly in the UK, Australia, and APAC regions. Its 1,000+ app integrations, IFRS compliance, and tools like Hubdoc and Melio make it a flexible, cost-effective choice for international businesses. However, it lacks native US tax integration, advanced payroll features, and ERP capabilities for larger SMBs.
QuickBooks excels for US-based SMBs and accountants due to its robust feature set, TurboTax integration, and comprehensive payroll and ERP solutions. Its familiarity among US accountants and ProAdvisor Program enhance its appeal, but higher pricing, user limits, and a US-centric focus may deter global businesses.
Recommendation for Accountant Partners:
Choose Xero for clients with international operations, larger teams (unlimited users), or those needing a simpler interface and broader integrations. Its lower pricing and modular add-ons are cost-effective for growing SMBs.
Choose QuickBooks for US-based clients requiring advanced payroll, tax integration, or ERP-like functionality. Its extensive accountant tools and market dominance make it a safe choice for North American SMBs.