Xero vs. QuickBooks vs. The Rest

In today’s digital age, small businesses in the UK have a plethora of accounting software options to help them streamline their financial operations.

However, two giants dominate the landscape: Xero and QuickBooks. And the decision is perhaps not quite so clear cut as it used to be. Both packages can be used by either Windows or Mac users.

In this showdown, we’ll delve into their key features and the pros and cons of each to help you make an informed and balanced decision.

And we throw some other contenders into the ring too.

1. Xero: The Intuitive Interloper

Newer to the market, Xero has rapidly gained popularity among UK small businesses due to its intuitive interface.

Key Features:

Real-time accounting: Access your financial data anytime, anywhere using their App.
Easy bank reconciliations: Automatically import bank transactions to save time. (Bank rules and reconciliation functionality is more sophisticated with Xero than QuickBooks).
Invoicing and expense tracking: Easily create and send professional invoices and track expenses.
Manage payroll efficiently: Including auto-enrolment.
Integrations: Seamlessly connect with many other business 3^rd party apps like time recording, CRM and e-commerce platforms.

Pros:

User-friendly interface: Easy to learn and navigate; it is also intuitive to use.
Strong community and support: Extensive resources and helpful community forums.
Automation: Xero excels at automating financial processes – ideal for users perhaps new to finance/accounting.
Regular updates and new features: Xero continuously improves its platform.
More addons than QuickBooks: over 1000 for Xero plays 750 for QuickBooks.
Unlimited users: compared to QuickBooks Essentials which is limited to 3 Users plus 2 accounting firms.

Cons:

Pricing: At £33 per month (plus VAT) it is not cheap (we would say it is worth it for what you get), their entry level “Grow” package is pitched directly against QuickBooks.
Limited customization options: While flexible, it may not suit highly specific needs like accounting for multiple entities or a number of different currencies.
No live chat support: although there are extensive ‘how to’ guides, videos and online help coupled with the community forums mentioned above.
Soft limits on data volumes: Limits can be exceeded but the system will slow up – for example when running reports; and eventually reports might fall over.

2. QuickBooks: The Versatile Veteran

QuickBooks has been a trusted name in accounting software since the early 90s and offers a range of plans to suit different business sizes and needs.

Key Features:

Real-time accounting: Access your financial data anytime, anywhere using their App.
Now fully cloud-based: The desktop versions have now been discontinued.
Comprehensive accounting features: Covers the usual invoicing, expense tracking, payroll, and more.
Advanced reporting: Generate detailed financial reports to make informed decisions.
Industry-specific solutions: Tailored solutions for various industries like construction and retail.

Pros:

Robust feature set: Offers a wide range of capabilities.
Strong customer support: Includes phone support and online chat 24/7.
Customizable workflows: Adapt the software to your specific business processes.
Enables a greater insight into your business: using an unlimited number of ‘tags’ compared with Xero which has a limit of 2 active tracking categories.

Cons:

Pricing: At £33 per month (plus VAT) it is expensive (again, we would say it is worth it for what you get), the entry level “Essentials” package is pitched directly against Xero.
Steeper learning curve: Can be less intuitive and more complex to use compared to Xero and others.
Older interface: While functional, it does not feel as modern as Xero.
Limited users: Depending on subscription; Essentials is 3 + 2 accounting firms, Online Plus is 5 + 2 accounting firms.

The Rest of the Field

While Xero and QuickBooks dominate the market, other strong contenders worth considering are:

FreeAgent: A popular choice for freelancers and small businesses, offering a clean interface and very affordable pricing.
Sage: A well-established accounting software provider with a range of solutions for businesses of all sizes.
Zoho Books: A cloud-based accounting software that offers a comprehensive suite of tools at a competitive price.

Choosing the Right Software

When selecting accounting software, consider the following factors:

Business size and complexity: Your needs will vary depending on the scale of your operations.
Budget: Evaluate the pricing plans and additional costs.
Desired features: Identify the specific functionalities you require.
Ease of use: Choose a software package that is intuitive and user-friendly.
Customer support: Reliable support is crucial for any business and it really pays to make sure yours is top drawer.

By carefully considering these factors and evaluating the strengths and weaknesses of each accounting package, you can select the best solution to streamline your finances and drive your business forward.

And remember, the vast majority of Tectona clients have opted for Xero and have not looked back since.

Over to you … or if you would like a helping hand, why not reach out to Tectona.

About Tectona

Tectona Partnership helps business owners sleep at night by embedding one of our 17 commercially minded FD/CFOs in your management team.

Very often, a part time (or fractional) FD/CFO is the most effective solution.

We make sure you have the necessary management information and strategic insight to make informed decisions and reduce risk; and we will absolutely tell you what you need to know, when you need to know it.

“TECTONA PART TIME FDS SUCCEED WHERE OTHERS … DON’T.”
Have a read of one of our case studies here

About BookCheck

This article was written with the help of our colleagues at BookCheck.

BookCheck work with accounting systems day in, day out and specialise in providing management accounts which have been thoroughly checked by one of their qualified accountants. In addition, they provide quality draft accounts for your accounting professional to complete your year end accounts and tax computations.

We have found their in-depth knowledge of the various add-ons invaluable to drive both efficiency and ease of use of the system.