"WHICH ACCOUNTING SOFTWARE SHOULD I USE?"
Your business is up and running. Expenses are flowing day in and day out. But how do you keep track? Perhaps you are using an excel sheet or Mint or something more official such as some version of Quickbooks or Freshbooks. Today we discuss the best & most efficient options available for small businesses.
CLOUD BASED SOFTWARE IS OUR FRIEND
Before I dive into the details, let me first begin by saying that if you are using a desktop version of ANY bookkeeping/accounting software, move off of it as soon as possible! It is understandable if you paid $$$ to get this software onto your desktop, as at the time, that may have been your only solution. With the rise of technology these days, cloud based software is 110% the way to go! Why? Because if you have multiple users accessing your accounting software, some of you may have experienced having to log in using a single computer, which is a royal pain in the butt! With any cloud based applications, hardware use is not even a question. All that really matters is having a computer with a reliable internet connection. The cloud based accounting software we discuss today, Xero & Quickbooks Online (not to be confused with the desktop versions of Quickbooks) are both accessible from anywhere in the world with the ability to provide multiple user logins at any given time. Let's dive in, shall we?
WHO IS XERO ANYWAY?
For sure you've heard of Quickbooks, who hasn't?! Intuit Quickbooks has had a mega marketshare on accounting software for as long as many of us have been alive. However, in recent years, New Zealand based Xero is gaining a serious edge with business owners in North America, Australia, New Zealand and markets in Asia with its "Beautiful Accounting Software." In mid 2015, Xero saw +42% growth from 2014, while Quickbooks Online saw a +23% growth during that same period.
If you are using another application or software for your business accounting, both Xero & Quickbooks Online (QBO) offer conversion. However based on a series of user reviews from each individual site, there are a number of complaints about Quickbooks file conversion, stating issues around lost data and reduced functionality once files are converted.
I recently converted a number of QBB desktop files into Xero and was successfully able to do so with no issue. Offhand I know that Xero can convert files from Freshbooks & Quickbooks (both online & desktop versions dating to 2007). Xero will also convert Quickbooks files free of charge which is a great incentive for those interested in exploring the possibility of making the switch.
For a single small business subscription, Xero their lowest price package at $20/month, while QBO offers their simple start at half the price of $10.36/month for the first 12 months. However, when comparing which software you get a bigger bang for your buck (depending on how in depth you want to track your business transactions), Xero has QBO beat, simply because all of the basic features are included within Xero's Starter package, vs. QBO who requires that you upgrade for certain features that go above and beyond (outlined below).
As mentioned above, many of the standard features within the Xero Starter package come at an upgrade cost for QBO. Additional features that are included within Xero's Starter package and not with QBO's Simple Start are...
- Recurring invoices
- Tracking categories
- Purchase orders
- Inventory accounting
- Basic stock list
Other features Xero offers that QBO does not offer at all include...
- Expense reports
- Ability to manually mark invoices as 'Sent'
- Accepting quotes online
As a creative, I'm always drawn to products that are beautifully made, whether they are tangible or not, if something is truly built and designed with the end user in mind, I'm all for it! That said, in my experience with both pieces of software, is Xero REALLY beautiful accounting software? Absolutely! The interface within Xero makes sense. I know where to go and if I don't, they make it very easy to figure out how. When I've recently used QBO it works, though navigating to figure out when/where/how isn't nearly as effortless as my experience within Xero. However, let me preface this by saying that this could be more a personal preference. Different strokes for different folks as I always say :-P
According to Xero's website there are over 400+ add-ons which help increase the functionality of the accounting software. This includes payment processors such as Stripe & Paypal, while QBO requires that you use their payment processor Quickbooks Payments or Stripe. For inventory management there is StitchLabs, Dear Systems & Shopify that also work in tandem with Xero.
So say you sign up for one or the other and as you're setting up, somewhere along the way, things go haywire. Your data looks super funky and maybe you pressed a wrong button, or some of the data didn't make it in or you simply don't know where to find it. You must now call Customer Service to get help ASAP! What happens next?
Based on multiple, recent customer reviews historically, Xero has a solid reputation of providing responsive and helpful customer service which includes options to speak to someone 24/7. Intuit, historically, has not. However, due to Xero's market share gain on Intuit's QBO, some recent QBO reviews have improved with at least one call center within the United States. However, if you find yourself in a bind on a Sunday afternoon, QB call centers are not reachable until Monday morning.
I realize that the tone of this article might sound like a play towards Xero over QBO. I promise that I am not being paid or endorsed by Xero. The opinions stated in this blog are purely based on my own personal usage and research of both software options. Ultimately making the decision on which option to use fall on 1) your personal preference and 2) identifying the features that will really help your business. If you want to test and compare the waters for yourself, both Xero & Quickbooks Online provide free 30 day trials.
Want more? Check out 9 Steps To Elevate Your Business Finances, if you haven't already!