How Do Xero and QuickBooks Compare for UK Small Businesses?

Xero and QuickBooks (QB) stand out as two leading accounting software options suited for small and medium enterprises in the UK. Comparing functionality, ease of use, integrations, and cost between the cloud-based platforms helps companies under £10 million turnover determine the better financial system to meet their needs as both solutions can deliver significant time savings, insights and value.

What Core Accounting Capabilities Are Included?

Both Xero and QB Online cover essential accounting tools for managing finances, although Xero provides a more user-friendly interface accessible for employees beyond just accounting roles. Users can leverage its inventory management, quote templating, combination invoices and bills, fixed asset depreciation, multi-currency support and 550+ account integration capacity for greater flexibility managing end-to-end processes. However, QuickBooks supports additional manufacturing production tracking. Both enable workflow automation for accounts payable/receivable, bank reconciliation, unified reporting and self-service access portals for external accountants.

How Do Their Ease of Use Compare, Especially During Setup?

Xero stands apart on simplicity through an intuitive design enabling faster onboarding and feature discovery, well-suited to small business owners handling their own bookkeeping instead of financial controllers. It uses clean interfaces with easily searchable menus, far simpler than QuickBook’s somewhat dated navigation overloaded with buttons slowing task completion. For non-accountants, Xero also offers step-by-step guided setup wizards that simplify creating charts of accounts, customising invoices, expense claims and tracking projects. Its dashboard delivers one-click insights into cash flow, receivables, payables and reconciliations to prevent surprises. Quickbooks requires more hands-on support to correctly establish workflow preferences and reporting visibility.

Can They Scale to Support Company Growth Over Time?

While both solutions can sustain expanding UK enterprises, Xero better handles scaling up volumes, locations and transactions through seamless upgrades to higher pricing tiers enabling more simultaneous multi-user access, storage and countries as SMEs grow internationally. Quickbooks historically faced performance degradation at higher complexities, struggling with large invoices or sales order batches, though recent server upgrades have mitigated most latency concerns. For simplicity, Xero allows adding inventory items on the fly while selling whereas Quickbooks requires more rigid setup. Custom reporting also stretches further in Xero for data combinations not offered out-of-the-box by Quickbooks without exporting data.

Do They Integrate With Other Business Applications?

Thanks to open APIs, both platforms achieve robust connectivity with hundreds of complementary apps for payroll, ecommerce, CRM, inventory and point-of-sale systems. However, Xero specialises as an accounting hub at the center of an ecosystem simplifying syncing data flows across best-of-breed SaaS technologies already permeating modern SMEs. It strategically partners with top solution providers in HR, expense management, procurement and billing to enable UK businesses to craft integrated stacks on a unified ledger. Quickbooks takes a more siloed approach encouraging add-ons from its parent Intuit company over third-party integration.

How Do Their Mobile Apps Compare for Accessibility?

Both offer intuitive mobile apps for iPhones and Android that allow users to access key functions like reconciliations, bank transfers, invoicing, expense claims and reporting from anywhere with offline mode support in case of network interruptions. However, Xero arguably delivers greater usability tailored around touch-interfaces and small-screen responsiveness. Its apps simplify running an entire business from a phone, authorising purchases, capturing receipts and reviewing financial position. Navigation and text sizing work well on mini mobile displays. Quickbooks confusing menus with overcrowded UI elements prove more cumbersome on tiny phone screens unless users create dedicated shortcuts to favourite features ahead of time.

Can Either Platform Support Global Multi-Currency Needs?

As UK operations expand overseas, many SMEs eventually need to transact and report finances across multiple international currencies. Both solutions have global ambitions, with Xero notably ahead on multi-currency flexibility necessary for importers/exporters. It enables sending invoices internationally, automating currency conversion across bank transactions, managing foreign bank accounts and reporting financials in local monetary standards. Quickbooks lags on seamless currency usage despite its app supporting basic static conversions during invoice creation. But modifying global settings still requires manual support requests instead of self-service configurations.

Which Option Has Better Support Resources Available? 

Deciphering accounting systems often needs expert guidance both during early setup and ongoing usage for troubleshooting. Here Xero pulls ahead with its extensive 24/7 chat, email ticketing and phone assistance included across all paid plans instead of only top-tier enterprise customers like at Quickbooks. The Xero ecosystem also provides access to over 1,000 small business accountants and advisors for hire in local UK communities. Quickbooks certified experts prove harder to identify without relying solely on Intuit’s recommended partners. For self-service, Xero offers a richer knowledge base of tutorials and webinars polished from a decade of SaaS maturity while Quickbooks continues beefing up its historic classroom-based education model.

How Do Their Costs and Contracts Compare?

Both platforms offer multiple tiered pricing plans based on number of user licenses, features, support levels and integration needs. However, Xero delivers greater transparency around contracting with no long-term commitments required for subscriptions. Its pricing allows seamless monthly adjustments aligning license counts to seasonal business needs. One-click upgrades fast-track growth rather than undergoing procurement reviews. By contrast Quickbooks requires lengthier one-year contracts and charges extra for each incremental user bump, creating financial forecasting hassles. Xero also bundles phone support and integration costs compared to Quickbooks piecemeal addons pushing total ownership expenses higher over time despite similar base software pricing.

Which Option Is Best for Small Business Accounting Needs?

Selecting between the two capable services depends most on current versus future complexity factors along with desired ease-of-use. Quickbooks Online suits basic accounting scenarios focused purely on finances. But Xero better handles fast-growing multi-region operations needing an extensible hub tying external applications together under a single source of financial truth. Its user experience polish reduces small business workloads so they can strategically interpret insights rather than fighting software limitations trying to obtain general visibility for sound decisions. Transaction permission controls also outrank Quickbooks capabilities for more advanced segregation of duties. So for disruptive modern UK SMEs, Xero represents the next-generation accounting platform over Quickbooks.

For more information contact Ballards LLP at 01905 794 504

Disclaimer. This article has been prepared for information purposes only. Formal professional advice is strongly recommended before making decisions on the topics discussed in this release. No responsibility for any loss to any person acting, or not acting, as a result of this release can be accepted by us, or any person affiliated with us.