Cloud Accounting Xero

Cloud Accounting Comparison – Introduction

Written by Greg Lam

Cloud AccountingThis is the first part of a series of articles delving into cloud accounting software. It’ll contain in-depth comparisons between Xero, QuickBooks Online, Kashoo, Wave, FreeAgent, and Freshbooks.

But before I get into the comparison of cloud accounting software, I first wanted to introduce myself. I’m Greg Lam (a.k.a. The Small Biz Doer). I started off in small business right out of high school in ’98  and have been pretty much involved in Small Business since then. I ended up getting a business degree from Simon Fraser University in Canada and started officially doing the books for others in 2009, which is around the time I also became a Certified QuickBooks ProAdvisor.

From the start, I used QuickBooks for my bookkeeping and it worked well enough for the small businesses I was running. The Internet was just gaining awareness back then, but it was still early days with dial up modems and the term “cloud accounting” was non-existent. Nowadays, the Internet is ubiquitous and whether we like it or not, accounting is moving to the cloud.

I started reviewing cloud accounting software in 2012 as an effort to figure out how to work with my clients more efficiently. I had tried networking computers with VPNs, logging in to clients’ computers remotely, and even tried using QuickBooks in Dropbox, but all those solutions didn’t work for one reason or another. Enter cloud accounting software.

The software instantly solved a few of my problems, which were:

  1. Working remotely on client’s files
  2. Working on a client’s file at the same time they were
  3. Backing up the accounting file
  4. Updating the software and having the same software as the client
  5. Version issues (who has the master file?)

It also meant that some of the capabilities I was used to with QuickBooks were not available in the cloud accounting software I was reviewing. Overall though, the pros outweighed the cons and I’m now a cloud accounting software convert. In some ways, the software still can’t match the power and flexibility of desktop software, but in others ways, it far surpasses it.

This accounting software comparison will exhaustively (and that’s the right word, because this did take a long time) evaluate and compare online accounting software for small business.

The Cloud / Online Accounting Software Being Reviewed

This review will be a comparison of six different online accounting software providers:

  1. Xero
  2. QuickBooks Online
  3. Kashoo
  4. Wave
  5. FreeAgent
  6. FreshBooks

There are actually many other online accounting software that has not be included in this comparison, such as:

  1. Clear Books
  2. Intaact
  3. Kashflow
  4. Sage One
  5. Outright
  6. Cheqbook

That’s not all of the online accounting software out there, but they are some of the more developed companies offering online accounting services. Out of the software not included, I really wish I could have included Clear Books and CheqBook, as my initial impressions of the software were positive.

If you’re a bigger small business, you should probably consider enterprise software like Intacct


As you read through the comparison, you may wonder how points are graded, compared, and tested. For the most part, I’ve personally tested every point in every piece of software in this comparison. For things I could not personally test (such as payroll or payment systems) I relied on documented literature (preferably by the software company, but sometimes through external sources). Some sections I use a simple Y or N when evaluating features (as in it does or doesn’t have a feature), while in other I do a score from 0 to 5 (0 meaning there is no capability, 5 meaning the capability works fantastically). I do want to point out, I’ve tried to make this comparison as scientific and fact-based as possible, but the scoring system from 0 to 5 is quite subjective and not necessarily representative of the software’s usefulness for your business’ unique needs. It could be that a software that has a rating of 1 in a certain area has enough basic functionality that it’ll suit your needs.

So on that note, I wouldn’t recommend choosing the software solely based on the most features or highest score. Find out what’s important for your business, look at how the software ranks for those capabilities, and use this as a guide to help you make a decision to try out the software. There’s also probably not going to be any one piece of software that’ll suit your needs 100%, so you’ll most likely have to make a compromise when choosing one piece of software over another.

Something that you may not be aware of, is that most online accounting software have add-ons (i.e. plugins, integrations, third-party developers) that can be used on top of / in conjunction with the accounting software to provide extra capabilities and move data both into and out of the software. This review, for the most part, only considers the native (built-in) capabilities of the software, and doesn’t take into account the extra capabilities that can be provided by add-ons. There are too many add-ons to review to make that a feasible and fair comparison. So it’s worth mentioning, that if the software you really like doesn’t have a certain capability, check out their add-ons to see if it can’t be found in there.

While I did my best to verify every single comparison point, there are over a hundred points x 6 software companies, which means hundreds of opportunities to make a mistake. If you’re a user of the software or the company itself, and notice an error, please do leave a comment and the review will be updated.

It’s also important to point out that the review of QuickBooks is for the QuickBooks Online US (Online Plus with Payroll) version. If you’re not from the US and don’t have the Online Plus version, the capabilities reviewed here may not be found in your version.

Comparison points

  1. Basics to be fully functional
  2. Data import and export
  3. Automation
  4. User interface / experience
  5. Invoicing
  6. Reporting
  7. Sales taxes
  8. Document attachment
  9. Multi-currency
  10. Payment processing
  11. Payroll
  12. Integration
  13. Mobile apps
  14. Inventory
  15. Other features
  16. Help documentation
  17. Price
  18. Recommendations

So, over the next few months, we’ll go through each of these points for the products I listed. Here we go!

Now Available!

Written by video blogger and online accounting expert Greg Lam (aka “The Small Biz Doer”), this new book from The Sleeter Group explains, compares, and contrasts 185 features found in today’s leading online accounting software products.Online Accounting Software: Finding the Right Match

Online Accounting Software: Finding the Right Match evaluates:

  • QuickBooks Online (small business)
  • Xero (small business)
  • Cheqbook (microbusiness)
  • Kashoo (microbusiness)
  • Wave (microbusiness)
  • Zoho Books (microbusiness)
  • FreshBooks (invoicing)

Greg gives you everything you need to assess the software and “find the right match” for your own accounting firm or for your clients’ small businesses.

Order your copy today and you’ll receive Greg’s first update FREE!


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About the author

Greg Lam

Greg Lam is a passionate small business guy who loves technology and automation. He holds a BBA from Simon Fraser University, Canada. He's a Certified QuickBooks ProAdvisor, Certified Xero Partner, and Kashoo MVP. His business interests are focused on online accounting and how it can be used to streamline and automate a company’s accounting processes. He currently lives in Tokyo, Japan.

Greg operates the Small Biz Doer website, an "Entrepreneur's Guide to Small Biz Bookkeeping." He is the author of Online Accounting Software: Finding the Right Match, published by The Sleeter Group.

Connect with Greg on Twitter, Google Plus, YouTube, LinkedIn, or Facebook.


    • Hi Bruce,

      I took a quick 10 minute look. I can’t speak to the power, as I’d need to spend a few days testing everything, but I do have a few first impressions.

      1. It seems fairly dated in design (both visually and in the user interface).
      2. The user activity / press seems dated as well. There were links to old press from 2009.

      Before I dig deeper into companies, I usually do a quick poke around, and decide whether or not I see things that warrant further investigation. Right now I wouldn’t put Nola Pro at the top of my list. As mentioned in my article, there are tons of accounting software out there. It’s not to say there’s anything wrong with Nola Pro, but there would have to be something clearly different / better about the software for me to review it sooner rather than later.

      • Greg, I’m looking into accounting and invoicing software for my new company, (Home improvement contractor) we measure and give estimate at the customers’ home. I’d like cloud based (accounting, estimating and invoicing software I can run from a tablet keeping everything organized without paper files. Converting my estimates to invoices at the customers home and accept payments/deposits online. Do you any suggestion on which program will be easy to use. Priorities are estimating, invoicing, auto email generation thanking and reminding customers once an estimate is registered. Is there a program that does all this and general ledger bookkeeping?

        • I’d have to say either QuickBooks Online (provided you’re in the US) or Xero. Which one would depend on your exact needs. I find QuickBooks Online natively (meaning not using any add-ons) is stronger on the project management side than Xero. As I’ll say about any software, it’s always free to try them out, so I’d give both a spin and see which one seems to suit you best.

  • Welcome Greg!

    As your newest columnist, we’re really excited to have your perspectives on the cloud accounting products in the marketplace.

    We’ll eagerly await your columns in the coming weeks.

    • Earl, there are MANY cloud accounting products out there. It becomes a major chore to try to add every one to the comparison list. Greg is working with a reasonable number of products, ones that he has worked with over time and ones that represent several different approaches.

      We may bring in reviews of other products in the future – either by Greg or myself – after Greg gets through his extensive analysis/comparison of these products.

  • Greg, as I re-tweeted, we’re really glad you are doing this comprehensive bit of work. We’re following your progress through each area that you review. For us, once a solution has passed what you refer to the “fully functional” test,to serve the needs of even the smallest sized business, they need to have great reporting capabilities and work well with marketing and sales tools. We don’t think to stay competitive, every small and mid-sized business must have each of these (marketing, sales (CRM), and accounting), and ideally they should be compatible with one another. Right now, for Canadian small business owners, Xero and Quickbooks online, as you have noted are far and beyond the best choices.

    • Hi Donald,

      Thanks for the comment. I’ve got more articles coming out which should help round out the picture. It does included a section about reporting (which most do have the basic reports).

      There does seem to be this line blurring between accounting software that can provide a general ledger vs. business software that can do your accounting, customer relationship management, inventory, marketing, etc…. For this series, I’m trying to focus on does accounting software do the basics and do that well.

      As for recommendations / conclusions, I actually haven’t given any at the moment. For example, you say for Canadian small business that Xero and QuickBooks Online are far and above the best choices, but I’ve never said that. For example, QuickBooks Online US is a great product for those in the US, but in Canada, there’s a different version, which is not quite as capable as the US version.

  • I’d also love to see how some of the new larger mid-tier products compare as these product pack a lot more features without the need to pay for plugins for payroll/stock etc that often the smaller products don’t have?

    – Netsuite
    – Acumatica
    – Gem Accounts
    – Saasu

    • Yes, they do have more power, but they also are more expensive, AND they are a lot harder to evaluate. I’ve been working on Intaact, as an example, and it is much harder to work into an evaluation.

      • Hi Charlie.

        My name is David and I work for Gem Accounts.

        We love to see reviewers and customers alike trialling our software and getting their feedback – both good and bad. We see this as one of the best ways to make our product the best it can be – and to ensure that it’s meeting clients expectations.

        I’d be more than happy to help you with access to a trial system and assistance from one of our team to assist where needs be.

        Please contact me if I can be of further assistance.

  • Hi Greg,

    Your posts are very helpful with the rapid adoption of cloud-based accounting systems.

    Here is yet another package that you might consider: FrontAccounting

    FrontAccounting is noteworthy in that, of all enterprise-class systems listed on SourceForge, it holds the highest rating by users.

    I author ‘CartSpan’, an eCommerce integration tool for QB/Sage50 and have just extended support for FrontAccounting.

    An oft overlooked consideration in evaluating cloud-based systems is customers having access to their own data. With most of the systems you listed (including QB Online), customers do not have unfettered access to their data. This is not the case with FrontAccounting given that it is open-source.

    I would estimate that FrontAccounting successfully addresses 80% of the comparison points you have listed. One of the weaknesses (presently) is the availability of 3rd party add-on’s to close some of the remaining 20% of those gaps. I believe this will improve with time as the custodians of the project are amenable to commercial products that augment a very capable core accounting system. In this regard, I’ve actually quoted you in the FrontAccounting forum from another of your posts as indicating, ” it’s not necessarily the cloud platform with the best native capabilities that will grow fastest, but the one with the best ecosystem.”


  • I am looking for a simple cloud accounting solution for realtors. Must be very simple to use. Strong expense tracking and budgeting, with a quick data transfer to CPA tax prep.
    iPad and Android enabled.

  • Hi Greg,

    The products you mentioned are without a doubt good products, but I think everyone should take a look at, a similar product offering as many features as the ones above but charges sweet nothing!

  • Hi Greg,

    Any suggestions for replacing Quicken with cloud software for personal use? I like to download from six bank accounts and categorize for tax and organization. At year end I print reports for tax categories. My needs are for strictly cash basis accounting.

    I’ve been using Quicken for PC for about 20 years and am sick of the updates every three years. They always cause problems and never give me anything new that I want.


  • Can you address the Job Costing functionality? Specifically, we use Sage (Peachtree), and run Job Costing. To migrate into a Cloud solution would mean retaining the functionality we are currently using.

    Thank you.

    • I didn’t cover job costing much in this set of comparisons. However, depending on your need, you’d probably need to go with something like QBO or get some add-ons for QBO / Xero.

  • Hello Greg
    I am so glad to see someone is trying to help us not so smart people out on what accounting is the best for our needs. I know there are many out there and all of us have needs that are different. I have been trying to find a program that will work the best for me but as of yet, I have found nothing.
    Here are my needs and I hope you can help give me some advice.
    1. I am from Canada
    2. I need an accounting program that can do my personal, my home business and I own a rental. It must be capable of doing all three. I am also looking for the program to be able to accept receipts by taking pictures and recording them. It would also have to be able to put in mileage, gas,electric and other utilities..
    I am not sure if a cloud is the best way to go but I am open to all options..

    Thanks for your advice and help

    • Hi Dennis, there is a whole series of articles (linked from this one) that you can peruse to figure out what’s best for you 🙂

      I can’t completely recommend any software, but perhaps this will help:

      1. Since you’re from Canada (me too), look for software that can handle VAT (i.e. GST). If you go to the Sales Tax part of this comparison you can see which companies can handle it.

      2. You won’t really find software that can do both business and personal finances well, at least in my opinion.

      That being said, Wave can do personal and business, it’s Canadian so can handle GST, and it also allows you to take pictures and upload receipts.

  • […] I knew nothing of cloud accounting 6 months ago. In an effort to gain help in this area I posted a request for help from LinkedIn’s Small Business Network for startups and entrepreneurs group – “does anyone have any recommendations regarding cloud based accounting software?” In a week there were over forty responses – most from people echoing the interest, some from people with ideas and one from Greg Lam who’s conducting an excellent review process on the topic. If you’re looking for further reading on cloud accounting software, you might start with Greg’s Cloud Accounting Comparison – Introduction. […]

  • Do you know if any cloud accounting system would work well for nonprofit organizations?

    We need cost accounting, sales tax, Budgeting & Budget tracking, lso a flexible reporting system.

    It would be great if it could handle separate foundations.



  • I am looking for a Cloud based accounting program for my Arbonne business. It is very comparable to like Mary Kay, Tupper Ware, Pampered Chef..

    Thank you for your help!

  • You may be covering some of this, but what about Desktop QB hosting? I think it should be a part of the conversation for sure.

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