Xero vs quickbooks

Xero vs. QuickBooks: Why We Recommend Xero for Small Business Owners

Bookkeeping
August 22, 2025•2 min read

If you’re a small business owner deciding between QuickBooks Online and Xero, you’re not alone. These two platforms dominate the accounting software space, and both can help you keep your books in order. But after working with hundreds of clients on both systems, our team has a clear favorite: Xero.

Here’s why.

QuickBooks Online: The Familiar Industry Standard

QuickBooks Online has been around for decades, and it’s often the first name people recognize in small business accounting. It offers:

  • Broad connections – Most banks, apps, and payroll providers integrate easily.

  • Comprehensive features – Strong reporting, payroll add-ons, and inventory tracking.

  • Widespread adoption – Many accountants and bookkeepers are already trained in it.

For some businesses, especially those with complex inventory or larger teams, QuickBooks can still be a solid option. But for many of the service-based small businesses we serve, QuickBooks can feel bulky, expensive, and overly complicated.

Xero: Why It’s Our Pick

Xero may be newer in the U.S. market (though our firm has used it exclusively since 2015), but it’s quickly gained traction—and for good reason. We’ve seen firsthand how it benefits our clients, especially service-based businesses that need simplicity and clarity without sacrificing power.

Here’s what sets Xero apart:

  • Ease of use – The dashboard is clean and intuitive, making it simple to see your cash flow and reconcile transactions.

  • Affordable pricing – Plans are generally more cost-effective than QuickBooks, especially when you don’t need every add-on under the sun, starting at just $25/month.

  • Collaboration-friendly – Unlimited users at no extra cost, so you, your team, and your CPA can all work in the books together.

  • Perfect for service businesses – Xero shines when you’re focused on invoices, expenses, and real-time reporting (without the clutter of inventory-heavy features you may not need—though they have recently built out a fantastic XeroInventory feature as well).

Want to understand why good bookkeeping software matters so much in the first place? Check out our post on why bookkeeping is the foundation of every small business.

Our Bottom Line

Both QuickBooks Online and Xero are strong accounting platforms. But after guiding clients through both, we recommend Xero for most of the service-based businesses we serve. It’s user-friendly, affordable, and keeps the focus where it should be—on clarity and growth.

If you’re unsure which software is the right fit for your business, let’s talk. At Misty Newsome CPA, we’ll help you choose and set up the platform that makes bookkeeping easier, not harder.

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