Xero is attracting former Quickbooks users.
In recent months, Intuit has made two moves that seem to be, at the very least, annoying to Quickbooks accounting consultants. The first is a de facto price increase for some files, based on arbitrary levels of use. In an industry where fixed fee pricing that includes software seems to be the trend, the significant increase in price for certain businesses is sensitive. The second move is a bookkeeping service in direct competition to Quickbooks accounting consultants: Quickbooks Live. The party line from Intuit continues to be that this is an attempt to serve businesses without linked accountants or bookkeepers, but I am aware of at least two instances where businesses have left their current consultant for Quickbooks Live.
In this climate somewhere between distrust and anger, it seems like many advisors are looking at Xero as an alternative. In this piece, I will point out the key features that accounting consultants find to be most interesting in my Xero training courses. In reality, many of QBO’s components are similar, if not nearly identical, to those in Xero. Thus, this is not a head-to-head feature comparison; rather it is meant to be a quick reference of key areas.
Xero allows an unlimited number of users regardless of subscription. There are four levels of access, with underlying options beneath: Read Only, Invoice Only, Standard and Advisor. This can be helpful for adding administrative help with invoice preparation (Invoice Only) or allowing investor or lender access to reports (Read Only).
The Essentials version of QBO, which is the one most closely comparing in price to Xero’s standard version, only allows for three users.
Quickbooks Online allows users to label transactions with a Class or Location. The related feature in Xero is Tracking Categories. Tracking Categories is a custom field that can be associated with any transaction and provides a way to filter or group like transactions in reports. In my practice, I use Tracking Categories to associate grants and funding sources with transactions for a non-profit, and to link attorneys to transactions for a law firm. In reporting, I can run a filtered income statement for each of the categories.
Each Xero organization may have two tracking categories with 100 options each. This is a fixed limit, regardless of subscription plan. My understanding is that QBO Essentials does not have classes and locations. QBO Plus allows only forty combined classes and locations with a required upgrade to QBO Advanced if more classes or locations are needed.
Chart of Accounts
In QBO Essentials and Plus there is a limit of 250 lines in the chart of accounts. Adding more general ledger accounts requires an upgrade to QBO Advanced. Xero has no official limit to the chart of accounts length, although an inside source confided that the recommendation is 699 or less to avoid performance issues.
A subtle difference in the structure of the chart of accounts between QBO and Xero is that there are no sub-accounts in Xero. Every account line has the same weight . If a user wishes to group general ledger accounts, this is easily accomplished in reports.
Bulk Invoice CSV Import
In my practice we have several clients for whom we import monthly sales or invoice data into Xero by using a CSV import. In those cases, the client is using a POS or law firm management system that does not integrate with Xero. We export the month’s data, manipulate to Xero’s invoice import format, and pull in. While this is a base feature in Xero, it is only available at the QBO Advanced subscription level.