When it comes to choosing the right accounting software for your business, price is always one of the top criteria. QuickBooks Online (QBO) and Xero are two of the most popular cloud-based accounting platforms available today. How do their pricing structures compare? As is often the case with apps, the price comparison is not quite apples-to-apples, so this blog includes some of the variables to help you decide which option may be best for your business needs.
The basics of QuickBooks Online and Xero
Both QuickBooks Online and Xero offer powerful tools to help manage your business’s finances. As cloud-based accounting solutions, they can be accessed from anywhere, at any time, and work equally well on both Mac and Windows.
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QuickBooks price vs Xero pricing overview
Actual prices change every now and then, so we won’t publish them here. However, you can see the links to the pricing pages of both QuickBooks Online and Xero, and we’ll discuss their general pricing structure and features.
For the most up-to-date pricing and features, be sure to visit the pricing pages of QuickBooks Online and Xero.
Click here to see current Xero pricing.
Click here to see current QuickBooks Online pricing.
QuickBooks Online pricing
QuickBooks Online offers several pricing plans designed to cater to different business sizes and needs. Generally, the plans range from a simple start package suitable for small businesses to more advanced options that include additional features and support for more users.
Key points:
- QuickBooks Online offers tiered pricing, which can become quite expensive, especially when you add features, like payroll.
- QuickBooks Online is known for its extensive feature set, including advanced reporting, inventory management, and project tracking.
- The platform supports up to 25 users, but that’s available only on the most expensive plan.
Xero pricing
Xero’s pricing plans are generally more budget-friendly compared to QuickBooks Online. Xero offers unlimited users on all pricing plans, which is a significant advantage for growing businesses. Xero also provides essential features, like basic inventory tracking, at all pricing tiers.
Key points:
- Xero is known for its competitive pricing and offers good value for money.
- All Xero plans include unlimited users, which can be a cost-saving feature for larger teams.
- Xero’s plans are designed to accommodate various business needs, from startups to more established companies.
- Xero boasts a 99.97% uptime and has a strong reputation for security.
Special offers and free trials
Both QuickBooks Online and Xero frequently run promotions and offer free trials to new users.
For example:
- QuickBooks Online often provides discounts, such as 70% off for the first three months
- Xero commonly offers a 50% discount for the first six months
Both platforms also offer a 30-day free trial, allowing you to test the software and see which one fits your business needs better.
Switching from QuickBooks Desktop to QuickBooks Online or Xero
If you’ve been using the now-discontinued QuickBooks Desktop (QBD), moving to QuickBooks Online can be a significant shift, particularly in terms of pricing. Many users experience sticker shock when transitioning to the online version. Moving away from QuickBooks Desktop also means losing the integrated payroll package (payroll is an add-on feature in QBO), which can be a downside if payroll is a critical feature for your business.
If you need to migrate to the cloud from desktop, you’ll have to learn a new software regardless of what you choose (that’s right QuickBooks Desktop and QuickBooks Online function differently). For businesses looking for an alternative to QuickBooks Online, Xero paired with a dedicated payroll service, like Gusto or ADP, can be a cost-effective and efficient solution. These payroll platforms offer specialized payroll features and support, which can complement Xero’s robust accounting capabilities.
So, QuickBooks Online or Xero?
While pricing is an important factor, the features and capabilities of each platform are equally significant when making your decision. Ultimately, the decision between QuickBooks Online and Xero will depend on your specific business needs, budget, and the features that are most important to you.
Choose QuickBooks Online if:
- You need advanced features like extensive inventory management and in-depth reporting
- You are okay with a higher cost in exchange for a comprehensive feature set
- You prefer an all-in-one solution, even if it means paying extra for payroll
Choose Xero if:
- You are looking for a more budget-friendly option without compromising on essential features
- You need to support an unlimited number of users without incurring additional costs
- You value strong security, uptime, and straightforward contact and need basic inventory management or project tracking
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Need some help migrating to the right cloud-based accounting platform?
We can help you examine your small business accounting solutions and identify the best cloud-based platform for your needs. Clients who work with us through a migration also receive training on the new system, as well as a real human to answer questions. If you feel that your accounting could benefit from an upgrade, send our team a message.
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