Xero vs QuickBooks Online: Which One is Better in 2021?
Xero vs Quickbooks Online: Which is better in 2021?

Xero vs Quickbooks Online: Which is better in 2021?

Posted on January 17, 2021
4 mins read

Quickbooks Online and Xero are two accounting software solutions commonly used by startups and SMEs across the Philippines. 

In this article, we explain the benefits of using Quickbooks Online and Xero and what you should look for when considering a subscription for either solution (Hint: it depends on your business..!). 

But first, why is CloudCfo interested in Quickbooks Online and Xero?


Why CloudCfo cares about Quickbooks Online and Xero

CloudCfo is an accounting, bookkeeping and finance services provider in the Philippines. We use an eco-system of cloud-based solutions when performing our services. Quickbooks Online and Xero are two of the solutions that we use to manage the accounts and finances of many of our clients.

To be clear – this isn’t a sponsored post or a collaboration with Xero or Quickbooks Online. We use both solutions regularly and wanted to write about them so our community can understand how these solutions can help businesses here in the Philippines.

So what are Quickbooks Online and Xero?

QuickBooks Online and Xero are accounting software solutions that startups and SMEs can use to manage their daily accounting, bookkeeping and finance activities. Through these solutions, companies can track and record daily transactions and accounts and manage sales/revenues, expenses, receivables, payments, cashflow, payroll, petty cash and much more. 

Both solutions also have functions for generating financial/management reports, customer invoices, bill payments, tax filing documents and other accounting-related tasks. 

Cloud accounting solutions

Quickbooks Online and Xero are both cloud-based accounting solutions. This means that all accounting, bookkeeping and finance related activities are processed online and collaborated upon between internal teams and/or outsourced accountants. Businesses can manage and record invoices, collect bill payments, prepare tax and compliance documents, perform online bookkeeping, process payroll, generate budget forecasts and financial models – all without leaving the office! 

Click here to understand how cloud accounting can save your business time and money.

Which solution is better?

Let’s get one thing straight from the outset – both Quickbooks Online and Xero are great accounting software tools. Our expert CloudCfo teams use both solutions on a regular basis and believe that benefits can be extracted from each solution depending on the particular industry, revenue model or process requirements that apply to a particular business or business model. 

Are you stuck deciding between these two accounting solutions? We suggest you make a decision based on the specific needs of your business. 

For example, you may operate in an industry that requires very specific accounting tasks (e.g. recurring standard invoices, detailed payroll reports, project timekeeping, etc). Either Quickbooks Online or Xero might meet those needs perfectly – the other might not! 

One thing is for sure though – if you are a startup or SME and you’re considering subscribing to Quickbooks Online or Xero, you are definitely on the right track to a well organized and optimized accounting and finance function.  


In general, with Xero, understanding how to set up processes and controls does not require significant accounting knowledge. There are not too many actions required to complete a task. Xero’s user-friendly dashboard makes it quite accessible for founders or business owners who don’t have a huge amount of experience or background in accounting or bookkeeping. Xero is quite suitable for smaller businesses that aren’t necessarily looking to scale quickly in the short term. 

For users seeking to utilize the wide range of accounting tools available and benefit from in-depth customization and optimization across accounting tasks, Quickbooks Online is an excellent option. Quickbooks Online is generally more customizable in terms of the outputs a user is seeking. As a result, Quickbooks Online requires more input on set-up of processes and tasks. Regular users of Quickbooks Online would usually have a higher level of accounting knowledge and experience.

Marketplace of add-ons

Both Xero and Quickbooks Online offer the ability to expand the range of applications and services within each solution. The selection of possible app interfaces is expanding all the time! 

By subscribing to either solution, you open the door to an entire range of additional applications that can be easily integrated into your existing accounting solution. Such additional applications may include payroll, HR, payments, time tracking, expense management, CRMs, sales tracking and more. 

Through really efficient use and optimization of either Quickbooks Online or Xero, a business can avoid a significant capital expense associated with implementing a pricey Enterprise Resource Planning tool (ERP) – substitute with a small number of monthly subscription fees!


Considering that both solutions enable a company to manage almost its entire accounting function, it’s hard to argue with the price of either! With a few keyboard clicks, you can subscribe online, process a recurring monthly payment and set up your account.

Both solutions operate through a subscription-based model (i.e. SaaS tool) where packages can range from USD$15 to USD$40 per month. Check regularly for discounts on these packages! 

As with any SaaS tool, each package will have different options, capabilities and limits. Before signing up to one package, make sure to review the limits and ensure they don’t conflict with your business needs.

For example, with Quickbooks Online, the number of user accounts can vary depending on the subscribed package. Xero, however, is based on the entity signing up with no further charges for additional users from that same entity.

It’s important to ensure that your business has enough users with access to your accounting solution to benefit from higher levels of collaboration.   

Inventory tracking

Businesses in the retail and manufacturing industries will generally view inventory management as a vital consideration and control for their business.

Both Xero and Quickbooks Online have inventory management functionalities. 

With Xero, the inventory management function is included in their packages. With Quickbooks Online, inventory management capabilities can be an additional cost. There are also additional inventory management applications that a user can add-on (see Marketplace of Add-ons above). 

If you are a retail business in the Philippines, check out our recent article on the importance of inventory management for retail businesses in the Philippines.

Managing projects

Whichever industry or sector your company or business operates in, you may have many different projects all running at the same time. The use of a project management tool can be very helpful here and both Xero and Quickbooks Online offer this helpful tool. 

Both solutions enable a business to choose from several options to help monitor and manage ongoing projects. Option selection should be based on the criteria that best fits your business. Certain options even enable the monitoring of projects on an hourly basis!  

There is generally an additional fee for each active user per month to use the project management functions. If project management is important for your business, this is something that should be considered and reviewed closely prior to signing up to either Xero or Quickbooks Online.


Businesses that send invoices on a regular basis, for example – manufacturing, will want to ensure that their accounting solution can process invoices as efficiently as possible.  

Quickbooks Online enables a user to customize invoices through its software. A business can upload their company logo, change colors, customize layouts and add customized notes to their invoices. Quickbooks Online’s cheapest package allows users to create unlimited invoices.

Xero, on the other hand, requires users to upload their own invoice templates. Depending on the package you chose, the number of invoices you can generate and send will range from five invoices to an unlimited number of invoices. 

Remember – when customizing or uploading invoices, you need to make sure you are complying with the laws and regulations in the Philippines for business invoices


Does your business have a lot of bills to pay on a regular basis? Both Quickbooks Online and Xero can help. 

Pretty much anything the company purchases with a debit or credit card, online payment or a bank transfer will be considered a business expense within these solutions. You can set up recurring expenses which means you don’t have to enter the same payee information every time. 

You can also benefit from the optimized categorization of expenses if your business incurs a lot of expenses. This can really help a business when preparing cashflow statements, budgets and forecasts. It is crucial for owners and founders to be able to understand, monitor and manage where and why money is leaving the business!  

In addition to direct business expenses, these solutions can enable add-on applications for employee expense recording. Certain add-on applications enable an employee to scan a receipt and immediately upload it to the HR/expense system. Depending on the technology used, the application may even be able to read the receipt, extract the relevant information and upload it directly on to the system for approval! 

Talk about efficiency and optimization!

Financial and Management Reporting

Both Xero and Quickbooks Online have great reporting functions. 

Both solutions enable a user to view financial reports in real time. 

Information can also be uploaded to and extracted from these accounting solutions. For example, it may be necessary to obtain information from Xero or Quickbooks Online to assist other business departments such as generating a sales report or providing input into a digital marketing strategy. All of the information stored on these solutions can be easily pulled and integrated into other reports. 

If you need to understand specific business metrics, both solutions can compute these for you. Forecasts? Budgets? Liquidity? Solvency? Current ratio? Debt-to-assets ratio? These accounting solutions make it very easy to compute! 

Wondering why those metrics might be important? Here’s why – This is what investors and shareholders want to know about your finances

Further, by truly understanding your financial reports, you can help your business identify areas to mitigate against financial risks or explore new opportunities.

Let CloudCfo manage your accounts and finances

Selecting the right cloud accounting solution can be difficult – particularly when there are similar options on the market. Also, the decision-maker may not have a specialised accounting background.

CloudCfo are experts on both Quickbooks Online and Xero – so let us help! 

We can assist you with selecting the right accounting solution for your business and drive implementation and set-up to ensure the solution aligns fully with your business model. From then on, we will manage your accounting, bookkeeping and tax compliance requirements on your behalf through the accounting solution that we have selected together. 

We ensure full transparency across your entire accounting and finance function! 

Visit us at cloudcfo.ph or contact us at enquire@cloudcfo.ph for more information on how we can support your business here in the Philippines.

DISCLAIMER: This article is strictly for general information purposes only. Nothing in this article constitutes or intends to constitute financial, accounting, regulatory or legal advice and must not be used as a substitute for professional advice. It is still necessary to consult your relevant professional adviser regarding any specific matter referenced above.

Get In Touch

If you want to know more about our tailored services and processes, drop us a line to discuss how we can help you to grow your business. We will respond to you within 24 hours.

Get In Touch

If you want to know more about our tailored services and processes, drop us a line to discuss how we can help you to grow your business. We will respond to you within 24 hours.