Most ecommerce merchants are familiar with QuickBooks and QuickBooks Online. Xero, a hosted accounting platform for small businesses, is less known. As a CPA for small-to-midsized ecommerce companies, I prefer Xero, for the reasons set forth in this article.
Xero: Product Overview
Xero was built to be an Internet accounting solution. It is not a streamed down version of desktop software
QuickBooks Online has always felt, to me, like a downsized version of QuickBooks desktop. While the online version has improved, it is not as user friendly as it should be.
QuickBooks desktop provides small-to-midsize businesses with most of their accounting software needs. However, it has to be installed on a hard drive and its cost increases for multiple users. It also requires a server for multiple users. And to share information with a CPA, a merchant must grant access to the server or exchange downloaded files. In addition, QuickBooks forces you to update its software every few years.
All three products — QuickBooks desktop, QuickBooks Online, and Xero — have similar functions, as follows.
- Bank synchronization
- Bank reconciliation
- Accounts payable
- Accounts receivable
- Inventory
- Invoicing
- Bill management
- Payroll
- Financial reporting
- Cashflow quick views
- Multi-currency
- Document sharing
- Quotes
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