Accounting Software Selection Guide

Quickbooks Online (QBO) vs. Xero

The search for the right accounting software for your business can be challenging, especially for startups. It requires deciding on features to prioritize, knowing what your budget should look like, and of course, comparing the various options available on the market.

If you've already begun your search, you've presumably come across the two most popular accounting solutions for startups and small businesses - namely, Xero Accounting and QuickBooks Online (QBO). Both are web-based platforms known for their solid feature sets, flexibility, and popularity.

So... which platform should you use for your startup? This guide aims to help you decide. We include a comprehensive review of the two, their features, pros vs. cons, as well as what makes one stand out over the other.

Feature Overview




Simple Start: $25 per month

Essentials: $50 per month

Plus: $80 per month

Advanced: $180 per month

Early: $12 per month

Growing: $34 per month

Established: $65 per month


Simple Start: 1 user; 2 accounting firms

Essentials: 3 users; 2 accounting firms

Plus: 5 users; 2 accounting firms

Advanced: 25 users; 3 accounting firms



Phone Support: Yes

Live Chat Support: Yes

Email Support: No

Product Training: Yes

In-product help: Yes

Phone Support: No

Live Chat Support: No

Email Support: Yes

Product Training: Yes

In-product help: Yes

Compatible Platforms

Web Browser, Mobile (iOS and Android)

Web Browser, Mobile (iOS and Android)

Key Features


Expense Tracking

Bank Feeds


Capture & Organize Receipts


Insights and Reports

Multi-Currency Support

Easy-Switch from Other Platforms


Contact Management

Bank Reconciliation

Accounts Payable

Time Tracking

Project Management

Pay Bills

Claim Expenses

Bank Connections

Accept Payments

Track Projects

Pay Runs

Bank Reconciliation

Contact Management

Online Filing System




Multi-Currency Support

Purchase Orders


Sales Tax


Important Aspects to Consider While Evaluating

Here are the things to think about while looking for accounting software for your startup.

General and Niche Functions

List the features you need to fulfill your startup's accounting needs before beginning your research. Also, consider the nature of your business and software integrations you require. Shopify and Stripe are good examples.


As self-explanatory and straightforward as this can be, there is the risk of choosing a less expensive (aka basic package) option without knowing that the most critical features are only available with pricy upgrades. Check for hidden fees, the upgrade cost, and any package deals available.

Cloud-Based Accounting Functionality

Cloud-based accounting software is becoming standard. As a startup founder, it is often essential to have easy access to your accounting data on the go.

Offering the ability for your team to access data via the browser encourages teamwork and collaboration among your accounting personnel.

Availability of Multi-Currency Functions

If your business involves transactions in multiple currencies, the availability of multi-currency functions is imperative.

Some small business accounting systems do not have this feature available, so always check if this is offered and how much it will cost you if it's an add-on.

Upgrade Capabilities as You Scale

As your startup grows, the list of required features also grows. Choose a platform that includes upgrades and feature add-ons to accommodate future expansion.

The ideal accounting software should work for the business and grow with the business.

Compatibility with Your Banks

Check if your accounting software supports your bank's software for integration.

User Security Options

As with any other software you will be using for your startup, you need to consider the security regulations and protocols for the accounting software you're considering. If you have multiple people using the platform, it is good to have customizable security functionality based on the roles of the users, especially on the accounting side of things.

Ease of Use

While most modern small business accounting tools are easy to use, some require more technical skills than others. Accounting is already a complicated function, so it would be unnecessarily brutal to use complex and non-user-friendly tools. Attending a demo, watching videos, and reading reviews covering the platform's user-friendliness are necessary.

Availability of Reporting Templates

Most accounting software includes report-writing features. Using report templates will save you time versus wiring custom reports from scratch.

Check what standard report templates are available in the system and make sure custom reports are supported if necessary.

Customer/User Support

Customer support is another key factor to consider when choosing any software for your business. Sometimes, this aspect can become a tie-breaker when torn between two equally great accounting platforms. This is not only limited to customer service in general but also the presence of knowledge bases, tutorials, new user guides, manuals, and FAQ sections.

Recommendations from Your Accounting Team

Suppose your accountants are comfortable with the software they use. In that case, they will give you advice on how to optimize it and aid you in maximizing its features and benefits—no need to start over if your team is happy with and knowledgeable in a specific tool.

Pros and Cons




- 30-day free trial

- Comprehensive list of features

- Easy-to-use

- Advanced invoicing features

- 650+ integrations. App Integrations Boost Compatibility

- Tax support

- Helpful mobile apps

- Built-in lending

- Allows users to manage sales and income by creating invoices to track sales

- Handy Automation Features

- Can automatically track and update amounts and unit costs of inventory

- 30-day free trial

- Offers a capable estimating/quoting/order process that ties into AR invoices smoothly

- Provides you with unlimited users

- Can manage personal expenses with mobile review and approval of each receipt

- Easy access to the same files as your clients

- Can be accessed from any device with an active Internet connection

- Automatic Currency Conversion

- Can pull cash reports for accrual-based businesses

- Bank accounts and credit cards automatically reconcile and provide reconciliation report

-Multi-entity reporting


- Occasionally unintuitive

- Expensive to Maintain and Add Features

- Fair customer support

- Limited reports

- Difficult to learn

- Limited inventory management

- Occasional Wrong/Missing entries

- Syncing problems.

- Payment Processing Is More Difficult Than It Should Be

- Accounts payable invoicing and payroll functions are sub-par

- Accrual and cash reporting can sometimes be difficult to toggle between

- Inventory management is clunky

- Cash vs. Accrual financials are not accurate

- Although easy to install, it takes some time to learn how to use it.

- Recent increase in its prices and no longer includes built-in payroll with its plans.

- The requisition/purchase/inventory side is very, very basic.

- Limited expense claims, projects, and multi-currency support to the most expensive plan.

- No built-in ‘Debtor Chasing’ function so businesses will need to manually follow up on unpaid invoices.

- Doesn’t support Exchange Trade Products (ETPs).

- Can be very slow if your company is running online or if it makes a high volume of sales through PayPal.

- Fair customer service (takes time and can be met with unhelpful advisors).

- For small businesses, there are a limited number of transactions included (scalability is limited)

- Search function is not great (clunky)

- Creating sub accounts in the chart of accounts is not possible

-There is not a direct conversion from QBO to Xero

Situational Recommendations

As mentioned above, both Xero and QBO are jam-packed with features and benefits. However, there are instances where one tends to be a better choice than the other.

When to Choose QBO

If you want the most value for the price. Although Xero is less expensive on paper, Quickbooks is fully packed with more features for a similar price.
If you prefer a more advanced reporting function. QuickBooks Pro plan has an excellent reporting solution with enhanced reports and project profitability analyses. The level of customization of reports, analysis, and forecasting is more in-depth in QBO.
If your business operates in the US. Quickbooks is more popular in the US, and most accountants are accustomed to using it. As mentioned before, when your accountant is well-versed and comfortable with the tool, expect an even higher efficiency.
Xero - airCFO Startup Toolkit

When to Choose Xero

If you have a growing startup. Xero is known for its scalability and upgrade capabilities.
If your business operates outside of the US. Xero is known to be used in other places outside the US, such as Europe.
If you operate multiple entities.


With QBO and Xero, there is no such thing as a “more superior” software - there is only “which software would be the best fit for my startup business?”

Purchasing accounting software should never be rushed. Take time to conduct research, contact different providers and ask questions, read online reviews and recommendations, or better, get advice from existing users of these platforms. Systems may look alike and pricing may be similar, but they don’t have the same functionality.

It is difficult to say one solution is more superior to the other. Instead, the winner between QBO and Xero depends on your startup - what your budget looks like, what features you need, and what functionalities are most valuable to you.

The good thing is, both Xero and QBO offer a 30-day free trial period. Take advantage to experience the software firsthand. Testing the software should help you determine how either may or may not fulfill your startup's accounting functions and needs.

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