Product Reviews QuickBooks Xero

Xero: A Quick Primer, Part 1

Written by Amanda Aguillard

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.

Users

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.

Tracking Categories

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.

Click here to read part 2 of this article.

About the author

Amanda Aguillard

Amanda Aguillard decided to become a CPA when she was 16, and never looked back. She started Aguillard Accounting LLC in 2012, committed to running a cloud-based practice from anywhere in the world.

In 2017, she co-founded Bluewire Strategy, a consulting group that empowers traditional accounting firms to fully embrace the cloud using process and technology. She has been a Hubdoc Top 50 Cloud Accountant for the last two years. She was the Xero Evangelist of the Year in 2016 and used her experience as an instructor of the Xero Certification course to co-found Elefant, a continuing education company for accountants and bookkeepers.

While she holds a Masters Degree in Taxation from the University of Denver, she would much rather help other advisors leverage technology to build their dream practices. She regularly speaks at state CPA societies and industry technology conferences like Clio Cloud Conference and Xerocon. She spends any spare time cooking for her two kids and reading historical fiction. She is slightly obsessed with Penzey’s Spices and Chris Thile.

5 Comments

  • Hello There,

    I have a question regarding Xero certification. I am QBO certified and have been trying to gain the xero certification. But Xero says that the certification is only for Xero partners.

    How can I earn Xero certification ?

    Thanks in advance.

  • Just to add in my two bits! 🙂 My experience with Xero was not the best. I found it to be restrictive with delayed tech support coming from Australia. The “european” method of accounting is not exactly the same as the GAAP method used in the US. Compared to QB desktop (diehard) which I’ve been using for 20 years and a new QBO accountant user for 1 year, you don’t have the simplicity of customer invoices, credit memos, customer payments, gathered in undeposited funds, deposit to bank account register (a simple flow of actions) or even vendor bills, bill payments, bill credits, then the beautiful looking financial statements (with sub-categories), and enhanced payroll, all a breeze, plus the bank download & match, and the reconciliations, well laid out and understandable. For extremely simple bookkeeping for small companies, Xero will serve, but it lacks flexibility, good tech support, and it has restrictions which they have no intention of changing – I asked!