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Is QuickBooks or Xero Better Accounting Software?

Is Quickbooks or Xero better accounting software is an age old question in the world of bookkeeping. And that’s not a surprise. When it comes to accounting software, QuickBooks and Xero are the most popular names in the market today. Both provide powerful, comprehensive accounting solutions. They tick most boxes that business owners are looking for. However, their approaches are different. That is why one is more preferred in the business community than the other.

Xero is an incredibly user-friendly accounting software. It is designed to help businessowners in a simple way. On the other hand, QuickBooks has a cloud-based system. It allows you to manage your bills and invoices, track your projects and accounting processes through your smartphone. Things could not get any easier or more convenient than that.

Add this to other advantages, like flexibility and detailed reporting, and you will see that QuickBooks has a clear edge over Xero. Here is why.


Launched in 1983, QuickBooks has a long history in the world of accounting software. Xero was founded in 2006 and is no newbie either. However, QuickBooks is the most popular by far and is preferred by many accountants and businessowners.

With about 8 million users worldwide, QuickBooks is an accounting software giant. (Xero comes next with more than 3 million users around the world.) This is not only because QuickBooks has been in the market for longer. QuickBooks is also very well-developed and offers a higher value for your money. That is why it has been dominating the US market for years.


When choosing an accounting software, you want something that will be able to grow with each stage of your business. While both software offer multiple tiers, QuickBooks has greater flexibility, higher reporting standards at each level, and a much higher ceiling. In the higher-tier plans, for example, QuickBooks provides customized reporting options. This could be of a great value to experienced businessowners who wish to run more complicated reports as their operations expand.

Ease of Use

Both accounting software companies offer a user-friendly dashboard. You can easily get an overview of all your main business accounting data. Choosing one user interface over the other comes down to your personal preferences. However, QuickBooks has an edge with its customizable layout. You can easily get a quick glimpse of your business profit/loss, expenses, invoices, sales and much more. Furthermore, QuickBooks offers a superior reconciliation process and greater flexibility when creating journal entries – both of which are central to the bookkeeping process.

Reporting Flexibility

Over time, you will get more experienced at accounting and business operations. As a businessowner, you will need more complex, detailed reports from your accounting software. That is why, the reporting capabilities of QuickBooks scale up with each plan tier. They are designed to reflect your growing business requirements. With each upgrade, QuickBooks provides more detailed, complex reporting. This is crucial for setting your business goals and predicting new business trends.

Xero is not as flexible. It provides users with project tracking and expenses claiming options only at the highest-tier plan. Other than that, Xero’s reporting capabilities stay relatively the same.

Transaction Tagging

This feature is available in both QuickBooks and Xero. Each accounting software offers their own versions of transaction tracking tags. However, as usual QuickBooks has an edge in this area. Xero lets users create only 2 active tracking categories. Meanwhile, QuickBooks allows you to create 40 tracking categories in their Simple Start, Essentials and Plus plans.

The more tracking categories you create, the more reports you will get. This will provide you with a better overview of your business operations. It will also help you spot business growth opportunity.

A pair of hands holding up a clock on a blue background, symbolic of a discussion of the QuickBooks and Xero time tracking features.
Which software has better time tracking – QuickBooks or Xero? Read on!

Time Tracking

With Xero, you can unlock this feature only at their highest plan tier. By choosing QuickBooks, you can enjoy time tracking feature at each plan level they offer. Mileage tracking is also incorporated into all QuickBooks plans.


QuickBooks supports an unlimited number of invoices in all its plans. Xero’s Early plan allows only 20 invoices per year. If you need more invoices, you will have to upgrade your subscription or switch to QuickBooks.

Conclusion: QuickBooks is Better Than Xero!

When considering all of the capabilities of these software, it becomes clear that QuickBooks is the superior choice. (Although to be clear we use both and don’t begrudge companies who prefer Xero – especially those in the UK where it is particularly popular.) Disagree with us? Let us know your opinion in the comments. Ready to become a QuickBooks expert? Check out our great post describing the 5 best apps that integrate with QBO.

At My OC Bookkeeper, we are Southern California’s premier bookkeeping, accounting, and business consulting firm. We can help you with anything that has to do with business finance – from day-to-day bookkeeping to building complex financial models, we know how it is done. (We also know whether QuickBooks or Xero is better, see above.) It doesn’t matter if your business is just getting started or already well-established, our services will help you thrive. So, if you are looking for a true partner you have come to the right place. Reach out to us today and let’s do great things together!

Wondering about accounting software because you are starting a new business? Check out this great blog post for everything you need to know about starting a business in the OC. (Orange County specifically but it’s applicable all over.) Or, if you are a visual learner, check out the video below. Good luck!

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