SPOILER ALERT! We’ll let you in on a secret from the very beginning of this blog: Xero offers the best accounting software for a small business. Xero’s user-friendly interface, comprehensive features, and extensive integrations make it a standout choice for small businesses. With Xero, you can reclaim valuable time, streamline processes, and gain invaluable insights into your finances—all while adapting to the demands of the modern business environment. It’s our favorite cloud-based accounting software, and we don’t try to hide it!
First of all… it’s cloud-based or bust
In today’s day and age, cloud-based accounting software is the only way to go for real-time financial insights and flexibility. In the era of hybrid work environments, users need to be able to access financial data securely from any internet-connected device, be it a phone, tablet, or computer.
Learn more about the benefits in our Quick Cloud Accounting 101.
There are plenty of cloud-based accounting options out there, but Xero is our top choice. Here’s why:
1. Real-time insights into cash flow
Understanding your current cash position is crucial for making informed decisions. Xero simplifies this by securely connecting multiple bank accounts, automating transaction categorization, and providing real-time reports. Leave manual data entry behind and enjoy instant insights into your financial health.
2. Seamless collaboration
Xero shines with its real-time collaboration features. Users can grant varying levels of access to team members, ensuring everyone has the information they need to fulfill their roles. Business owners retain ultimate control while fostering teamwork and efficiency. We also love the discuss tab, which enables collaboration between your accountant or CPA and your internal team without having to send an email.
3. Expedited payments
Xero streamlines the invoicing process, allowing users to create and send branded invoices with ease. With online payment options and automatic invoice reminders, getting paid has never been faster or simpler. Xero also includes a full audit trail, allowing you to see when you sent the invoice and when it was viewed by your customer.
4. Robust security measures
Protecting sensitive business data is non-negotiable. Xero prioritizes security with industry-standard data encryption, secure data centers, and optional two-step authentication. Rest assured, your financial information is guarded against potential threats.
5. Extensive support and resources
For those moments when assistance is needed, Xero offers dedicated support teams and comprehensive online resources. Whether through guides, videos, or FAQs, help is always within reach. And your cloud accountant is always standing by to assist you and answer your questions.
Six Reasons We Love Xero Cloud Accounting
Xero offers more than just accounting
Beyond its core accounting features, Xero offers plenty of additional functionalities to streamline your back-office operations:
- Bill management: Easily track and pay bills while maintaining a clear view of accounts payable
- Expense reporting: Simplify expense submission, approval, and reimbursement processes, reducing administrative burden
- Bank reconciliation: Automate transaction reconciliation by using rules or cash coding and stay on top of cash flow in real-time
- Contact management: Manage all contacts and suppliers within a centralized, secure hub
- Document storage: Store and share documents seamlessly, facilitating collaboration during tax time and beyond
- Inventory management: Keep track of inventory levels, sales, and analytics with integrated tools
- Multi-currency invoicing: Cater to international clients with customizable invoices and seamless multi-currency payments
Learn more about the powerful features of Xero cloud accounting.
Considering QuickBooks Online
While Xero remains our top recommendation, QuickBooks Online presents a viable alternative for those seeking an equally future-fit and affordable solution. Offering similar cloud-based accessibility and essential accounting functionalities, QuickBooks Online may suit specific business needs. However, it’s essential to weigh the advantages and limitations carefully before making a decision.
Despite the ease and convenience of Quickbooks Online, there are some limitations to be aware of when comparing it to Xero:
- Some users find Xero’s interface and mobile app to be more intuitive and user-friendly compared to QuickBooks Online
- QuickBooks Online’s feature-rich platform can be overwhelming for beginners
- QuickBooks Online can have additional fees for certain features or users, which might make it more expensive in some cases
- QuickBooks’ monthly subscription fee tends to be a bit more expensive than Xero’s monthly fee
- Xero’s bank reconciliation process is often praised for being simpler and more efficient compared to QuickBooks Online
- Xero tends to offer better support for international businesses, including multi-currency support and tax compliance in various countries
- QuickBooks Online also has integrations, but some users find Xero’s ecosystem to be more extensive
Further reading: QuickBooks Online Pros and Cons
How much does small business accounting software cost?
Click here to see the latest Xero pricing.
Click here to see the latest QuickBooks Online pricing.
You may also be interested in:
Ready to make the switch to Xero?
The best accounting software for small businesses in 2025 is undoubtedly Xero. Its cloud-based platform empowers users with unparalleled accessibility, real-time insights, and collaborative capabilities. Whether you’re managing invoices, tracking expenses, or analyzing inventory, Xero streamlines operations and fuels business growth. Contact us today to explore how Xero can revolutionize your business’s financial management. Our cloud migration team can make the transition seamless for you.