QuickBooks vs. Xero – Which Should You Choose?
As the owner of a contracting business, you’ve probably heard about QuickBooks and Xero. Maybe you’re wondering which one you should use. While QuickBooks has dominated the accounting software market for approximately two decades, the competition in the field of accounting software has been heating up over the past few years. Although QuickBooks is the leader in the industry, Xero also has its fair share of users. Both are under regular development, so take a look at how they compare in our comparison of QuickBooks vs. Xero.
The Differences: QuickBooks vs. Xero
QuickBooks boasts of market penetration and strong brand recognition. On the other hand, users appreciate Xero for their aggressive development schedule and simple user interface. As the competition gets hotter, customers enjoy the benefits of faster than ever development periods and new features.
This comparison will look into invoicing, merchant services, customer service, bank feeds, and price.
One of the primary functions that makes you opt for cloud accounting software is the ability to send invoices. You want a program that you can use to create professional-looking invoices for your clients without a lot of fuss. Both Xero and QuickBooks work out well for that. But if you’re out in the field, you can use FieldPulse and QuickBooks together to create your invoice, send it to the customer, and log it in your accounts. FieldPulse extends existing QuickBooks functionality with sales commissions and profitability analysis on invoices. Xero does not yet have the ability to integrate with FieldPulse.
QuickBooks stands out here because it allows you to attach a payment link directly to the invoice so that the customers can pay directly. Besides having decent rates, you are sure that you are using a trusted program. On the other hand, Xero does not offer merchant services. Instead, it gives you options of third-party providers that are vetted by the company. Although this gives you more choices, it involves using another provider that you might be uncomfortable with.
After you send the invoice and the client pays for your services, the transaction is recorded in your ledger. The benefit of using either QuickBooks or Xero is that the payment is entered automatically. If your clients pay you directly via bank transfer, with a check, or cash, however, you have to enter the transactions yourself. But if you’re using FieldPulse, you can use your mobile device to enter the payment before you leave the work site. Update QBO and FieldPulse at the same time to close the job.
Apart from the basics, there are a few more touches that users might or might not require. Businesses that bill clients for their time spent on the job should take advantage of QuickBooks’s built-in timer, which Xero doesn’t have. The online timer records your time and exports it to an invoice with a single click. Although Xero features many third-party apps that can record your hourly billings, they cannot equal that of QuickBooks.
QuickBooks also integrates with FieldPulse to track and manage the time your employees spent on a job. They can use their phones and the FieldPulse app to clock in to a job and keep track of timesheets. FieldPulse also allows you to confirm the time your employees are logging with GPS verification.
The winner in this round is QuickBooks because it offers all-round solutions to many of the invoicing and tracking issues that contractors face on a daily basis.
This is a critical area when you do most of the bookkeeping yourself. Both applications alert you when a downloaded transaction seems to be a match for an item that is already recorded. You can confirm or deny the transaction. After you deny, both applications will tell you to either look for another match or add a new transaction.
QBO allows you to add the account directly from the online banking dialogue in the account’s drop-down list. As for Xero, you have to go to the chart of accounts, add the account, and then add the transaction.
Owning a business generally involves both receiving and paying money. QuickBooks and Xero both appreciate this fact, and they provide insightful solutions to enter payments and bills you have made from your account. QuickBooks has a slight edge over Xero because data entry in the latter is smoother. Going through the entry fields is quick, and you can itemize entries easily. QBO also has a slightly better overview, although the way it provides information might be bit dense for novice users.
QuickBooks Online stands out, especially in Canada and the U.S., because it allows you to pay bills through the program. This feature lessens the work on your end significantly. After you enter your bill, all you need to do is click a button, and your money is sent out of your account directly to the recipient.
Xero takes the lead here because it notifies you when the due date for your bills is getting closer. The notification can come either through email or a red alert that appears on the website. If you tend to forget a lot, you might want to consider this program.
As for this round, both QuickBooks and Xero seem ideal because they both have features that make billing more efficient than other accounting methods.
Besides being able to perform the basic functions, you should understand how your accounting application works. One of the positives to Xero is that it is free of jargon, so it’s easier to understand. Rather than using terms such as receivable and payables, it uses bills, invoices, and so on. QuickBooks throws in a few accounting terms, which is not a significant hindrance, but can be confusing when getting started.
What QuickBooks has going for it is that it’s a friendlier option for service contractors. You can integrate it with FieldPulse to make your life easier when you’re out in the field or back at the office. Instead of entering information twice into your job-tracking and accounting software, the two communicate with each other to import the data you need from one to the other.
Both applications offer a 30-day trial, so you can try both and determine what works best for you. Once your initial trial is over, it’s time to pay. If you decide to keep using QuickBooks Online, you will pay between $15 and $40 per month. Xero will cost you between $20 and $40 per month. Also, note that QuickBooks offers a 30% discount for the first six months if you forgo the trial.
Regardless of the program you choose, you want to know that someone will help you if you run into a problem. Both offer customer service, but they differ in the way they do so. Xero handles all their support requests via email. QuickBooks offers 24/7 phone support. If talking to someone directly is important to you, QuickBooks is ideal.
The Winner: QuickBooks
As the business owner of a contracting company, the last thing you want is a clunky accounting application that doesn’t fit your needs. Both Xero and QuickBooks Online are great programs. Considering all the advantages that QuickBooks has to offer, though, it’s still the best option. If you use FieldPulse, you’ll also enjoy how QuickBooks integrates with the service to make the accounting tasks of your job that much easier.