Through the years, Intuit has transitioned its flagship downloaded QuickBooks software from a dedicated, legacy desktop application to a Web-based app, aptly named QuickBooks Online. The company has only seen major disruption in the past few years, as a new crop of accounting apps, born and raised within the computing cloud, have emerged as competitive alternatives to QuickBooks.
GetApp keeps tabs on all the accounting apps on the market, and many are remarkable. But one app – which is something of an “underdog” from the land of the Kiwis, New Zealand – is causing a major stir, and no doubt casting a shadow of worry over the development team at Intuit. It’s called Xero, and it’s standing out as potentially the alternative to QuickBooks.
Xero serves a growing global customer base already totaling more than 300,000 unique small businesses per month. If Xero is a new name for you, it’s probably because its adoption has rippled from its point of origin in the Pacific. But Xero has more recently begun making more than a splash in the American marketplace, where it has rather quietly amassed more than 18,000 small businesses subscribing monthly, supported by a growing team of more than 800 people with its headquarters in San Francisco.
Like the “Little Engine that Could,” though, Xero has a refreshingly clean approach to accounting software. And that’s put it on the radar of many who have long been acclimated to Intuit QuickBooks.
As Xero’s presence attracts more and more customers worldwide, it’s increasingly worth considering as a viable alternative to QuickBooks – and other accounting apps, for that matter.
In an effort to explain what makes Xero the leading alternative to QuickBooks, we’ve put together this article, which aims to highlight the key differences that may well make Xero the most intuitive, helpful and all-around intriguing accounting application around.
Here’s what the “fresh, designed-for-the-cloud”underdog Xero has to offer compared with so-called “Old Faithful,” QuickBooks Online.
Xero: Familiar, yet different
If you’ve used QuickBooks at all, you will find it easy to wrap your head around Xero. Everything you would expect to see is readily available in Xero’s dashboard.
Both accounting apps track accounts payable and receivable, and both offer a quick overview of your current cash position and outstanding balances. Xero’s tagline is “beautiful accounting software” and it was one of the first companies to make design a top priority when developing an accounting software. QuickBooks Online has caught up on the design front with a revamped look and feel that it released about a year ago. So both apps are reasonably easy on the eyes, and both are simple to get started using; both Xero and QuickBooks make it a snap to connect your bank account.
Visually, as Xero was designed specifically for the cloud in 2006, it was clearly made with mobile usage in mind. That said, QuickBooks Online performs well on smartphones and tablets in its own right.
But the similarities largely end there.
Accounting on the go vs. Rooted to your desktop
Xero was founded by Rod Drury with the help of his accountant. Interestingly enough, the pair’s inspiration came from the inadequacies of desktop accounting programs available at the time and the lack of innovation in using cloud technology to make accounting easier.
From the start, Xero was built specifically to work online in what is now called “the cloud” – the Internet-based computing and processing resources that make Web apps work.
So Xero’s always been right at home on mobile devices. Intuit QuickBooks started out as one of those oft-maligned desktop accounting programs. That said, it has gradually made the move to mobile while still retaining a familiar workflow.
Xero’s mobile app (called Xero Touch) has an idiot-proof “all thumbs” approach to its mobile-ready iteration, and it’s ideal for monitoring your real-time cash flow keeping track of transactions while on the move. Xero also has a couple of really nifty invoicing and receipt-tracking features. 
You can create invoices with just a few clicks, as well as send them, right from Xero Touch’s clearly laid-out interface. You can also snap pictures of invoices and store them within the app.
QuickBooks retains most of its desktop functions in its mobile interface, but it’s an admittedly tight squeeze at times. QuickBooks Online’s tablet app is feature-rich and easy to look at, but not as manageable on an iPhone or other smaller-screened device, compared with Xero.
Bank reconciliation made simple
One of the key differences between Xero and QuickBooks Online has to do with reconciling accounts – and that’s where the proverbial rubber meets the road, when it comes to accounting apps.
In Xero, reconciliation works in a way that would be familiar to anyone who has done bank reconciliation on paper, albeit, with a few advantages.
For most of us, the reason for reconciling your business’ bank accounts is to verify the accuracy of all monies coming and going from your account. It’s to make sure all invoices clear in a timely fashion, and all bills are kept current, and this real-time cashflow insights lets your small business make better decisions.
Of course, you know it is logical to compare transactions against account positions, side by side. Xero stands out because it allows you to match invoices and receipts with account transactions, helping you to find not only errors, but also potentially fraudulent charge, at a glance and with quite a bit less “searching” than QuickBooks.
Both Xero and QuickBooks Online facilitate bank reconciliation, though the means by which each goes about it are quite different.
Bank reconciliation in Xero consists of choosing “Reconcile Account” from the Manage Account menu in the Bank Account view. From there, you are presented with two (very logical) columns, one on the left showing bank statement line items; the right, showing transactions recorded in Xero.
When payment amounts align perfectly, they are marked with a clear green “OK” button and you simply verify the reconciling by clicking the “OK” button between matching transactions/records. Just like playing Tetris. Xero saves your small business time by allowing you to define preset codes for routine and repeat transaction types. In the event that you wonder about a transaction, you can simply click “Find Match” to search through records and reconcile the activity.
This all turns a dreaded, time-sucking monthly chore into a less-than-a-minute task. Here’s an explainer video highlighting the intuitive way reconciling works in Xero:
Both Xero and QuickBooks offer third-party app integrations to expand functionality. Xero integrates with more than 300 third-party business apps, while QuickBooks integrates with about 60 while integrating with its own products for services such as payments and payroll.
Our underdog, Xero, boasts some handy integrations from innovative third-party developers like Constant Contact, connecting you to valuable (marketable!) customer data, Google Docs for generating and sharing reports in Google Sheets, and Square, bringing the trusted online selling platform directly into your accounting platform.
QuickBooks Online takes on a somewhat different approach to third-party integration. Intuit offers a smattering of a la carte apps, including eCC Cloud and Method CRM. Intuit sells third-party apps through its online store.
Unlimited Access vs. Single User Access
One of the major differences between Xero and QuickBooks is the way each handles and charges multiple users and employees.
You’re likely using accounting software to simply keep tabs on your banking transactions. But there are of course times when you want other employees and need a professional opinion, meaning you need to allow an authorized accounting professional to work within Xero or view your accounting dashboard. For those times, Xero has a clear advantage over QuickBooks Online.
Quite simply, Xero allows unlimited access for your employees and trusted advisors (including accounting professionals). Xero’s basic package ($9 per month) is ideal for freelancers and independent contractors. If you want to include payroll, you’ll want to look at Xero’s standard package, which is $30 per month to pay five employees. Xero also allows you to authorize your accounting professional to have direct access to your Xero dashboard on their tablet or laptop, and simply message or call her or him when you need advice.
In contrast, QuickBooks Online’s basic version (known as “Simple Start’) allows only one user for $12.95 per month. To get access for three users you’ll need to spend $24.95 per month. For five users, you’ll need to spend $39.95 per month and more as you grow and need to pay more employees over the limit specified in your contract.
The other major difference between the two apps is how each incorporates payroll services. For QuickBooks Online, payroll is a $39-a-month add-on. For Xero, payroll services are part of your plan, which scales up based on the number of employees you need to process each month.
Be sure to closely look at the total cost of Xero vs. QuickBooks Online to make sure it meets the needs of your business. Xero is designed to support unlimited users and includes payroll as a feature within the product. QuickBooks Online charges for additional users past a specified number and payroll is a separate product that integrates with QuickBooks Online.
Who’s the top dog?
QuickBooks is an undeniable accounting mainstay. That being said, Xero is the ideal alternative to QuickBooks Online, and Xero is readily proving itself with a growing customer base. Xero, the underdog, is nipping at the heels of Intuit, offering particular appeal to the next generation of entrepreneurs and accounting professionals who are using the latest mobile and cloud business tools. Made for the cloud and right at home on mobile, Xero pairs its innovative side with its practical side. The way reconciling works in Xero mirrors the way it works on paper, albeit with a few steps thankfully cut out – such as clumsy spreadsheets and Pendaflex files, for those of us old enough to remember.
If you’re ready to make the switch from spreadsheets, pen and paper, or legacy desktop software, you should consider Xero before jumping right into QuickBooks Online. Xero’s scalable pricing can grow with your business, remaining cost-effective at every stage of your company’s growth.
Xero’s ability to turn the keys over to an unlimited number of users and its wealth of integration options with other innovative business tools such as Square, ZenPayroll and Google Docs make it a great choice for your small business accounting needs.
Unsure which big name in small biz accounting works for you? Compare Xero vs. Quickbooks head-to-head with user reviews on GetApp, or go ahead and sign up for a no-strings-attached trial of each.
Visit GetApp Here.
Visit GetApp Here.
0 comments:
Post a Comment