Both Xero and QuickBooks offer multiple packages at varying prices with the functionality and features offered to SMEs dependent on the package purchased. Essentially, the different packages can be differentiated by their suitability to businesses who are just starting, those who have been running for a while, and those who are looking to grow. At the time of writing, their prices are as follows:
Xero (unlimited users and transactions)Starter Plan: USD 20/monthStandard Plan: USD 30/monthPremium Plan: USD 40/monthQuickbooks (charged based on the number of users and pricing plan)Simple Start: USD 15/month – 1 billable user + 1 accountant userEssential: USD23/month – 3 billable users + 1 accountant userPlus: USD31/month – 25 billable users + 1 accountant user
At quick glance, it is obvious that QuickBooks has an advantage in regards to pricing, however as Xero does not limit the number of individuals who can use each accountant, Xero’s advantage is evidently more pronounced. As both Xero vs QuickBooks offers various discounts from time to time, one should keep an eye out for potential savings.
2. Bank Feeds
Xero and QuickBooks offer their users the ability to utilize bank feeds to automatically import transactions from their bank or financial institution directly onto their cloud accounting system. As the bank feeds section is a critical area where most of a businesses bookkeeping will occur, this feature eliminates the need to import transactions monthly and can improve business efficiencies and reduce costs.
At the time of writing, Xero currently offers Hong Kong users the ability to connect directly with DBS, Hang Seng Bank and HSBC whereas QuickBooks only facilitates bank feeds with HSBC.
In addition, Xero has also partnered up with Hong Kong fintech companies like Neat, and other financial institutions to facilitate bank feeds. By expanding their network of what companies can integrate their bank feeds onto their accounting system, Xero is helping develop the support system for Hong Kong SMEs
Scalability is among the most valuable and predominant features of cloud accounting systems. Xero vs Quickbook’s scalability is determined by their ability to allow users to integrate third party add-ons to increase the functionality of their core accounting system. For instance, both accounting systems can integrate with PayPal, Stripe Hubdoc – although it should be noted that QuickBooks users must pay extra to utilize Hubdoc whereas Xero automatically includes it in their paid plans. Integrating third party add-ons allows these platforms to grow with their users and offers greater features than what is typically offered through their vanilla packages.
At the time of writing, Xero’s App Marketplace currently features over 700+ different apps that can synchronize with Xero whereas QuickBooks only allows for the integration of 650 apps.
4. Accounting Features
When evaluating the accounting features for a cloud accounting system, one must first identify who can access the information, and what information can they access. Firstly, while Xero does not limit the number of users who can access a company’s financial information, Quickbook does. Unfortunately, QuickBooks doesn’t compensate for this disadvantage through their accounting features.
The core accounting features that every cloud accounting system must have is the ability to handle invoicing, expenses and financial reporting. These are all essential features for running a business.
Both Xero and QuickBooks offer the function of paying expenses automatically, however QuickBooks only offers these features on its higher pricing plan. In addition, Xero offers greater visibility as to what expenses are outstanding whereas this information is more concealed in QuickBooks. When handling regular expense payments – such as rent, electricity or supply costs – Xero offers a more convenient method to handle these payment types.
For SMEs of all industries, payroll is a vital aspect of a company’s ongoing expenses. Cloud accounting systems must be able to support payroll features. Xero and QuickBooks both offer payroll solutions in their platforms but Xero’s is more comprehensive. QuickBooks integrates payroll processing, although it only provides reports on total wages and payroll taxes, workers compensation and employee details. Xero has more reports and even has built-in human resource functions such as time-off balances and requests. As such, Xero is more comprehensive in managing payroll recording.
4.4. Financial Reporting
Both Xero and QuickBooks can generate comprehensive financial reports. However, Xero has greater customization tools and its users can access more reports through the basic plan whereas Quickbook users must upgrade their subscription to a higher cost package to be able to do so. For example, Xero users can generate an equity statement (which is useful if your business has several investors) with the basic plan.
5. Advanced Functions
Some SMEs require their accounting systems provide functionality for advanced accounting features that are often specific to certain industries. Such features can include the ability to account for fixed assets, depreciation or even inventory management.
In respect of these features, QuickBooks is lacking. While QuickBooks is comprehensive, the platform doesn’t possess the same range of features and forces its users to upgrade, install each function separately, or subscribe to the most expensive plan to access them.
For instance, QuickBooks lacks a fixed assets module built into its accounting system, meaning that users must address these matters manually. On the other hand, Xero has such functionality built in. By importing an existing spreadsheet, Xero can automatically generate depreciation and disposal schedules, as well as fixed assets reconciliation.
Created on Aug 5th 2020 06:51. Viewed 514 times.