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QuickBooks vs. Xero 🥊

Head West Team
Updated October 31, 2023
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What’s the best accounting software for eCommerce companies QuickBooks or Xero?

If you’ve done some light internet research on the question of accounting software for eCommerce companies, you’ve probably heard two names come up again and again: QuickBooks Online (QBO) and Xero. And the question is which should you choose?

If you’ve narrowed it down to these two options, and you run a sub $50M annual revenue eCommerce business, then you don’t need to worry. Both of these tools are great. In terms of core functionality, they are very, very similar. At their core they're both General Ledger (GL) products that will perform the necessary accounting functions well. As much as people like to argue that these products are completely different, we view them as largely similar with the only differences being at the margin. 

People often throw out generalities like QuickBooks is “more advanced” or Xero is “easier to use” but don’t explain what that means. In this guide, we’ll attempt to separate fact from opinion.

QuickBooks was launched in the US way back in 1992 and is now the market leading accounting software for small and medium size businesses. Adding to its goliath reputation is the fact that it’s a subsidiary of Intuit which also owns the tax giant TurboTax and email marketing software Mailchimp. QuickBooks began with a desktop product which still exists, but they shifted nearly all of their focus to their cloud product QuickBooks Online around 2015. Xero (pronounced 'zero') was founded in New Zealand in 2006. They were cloud based from the beginning and grew rapidly in NZ and its neighboring Australia and expanded internationally from there. QuickBooks pivot to focus on QuickBooks Online was partially driven by the success of Xero.

Frankly, we love that there are two companies competing like this because they’re pushing each other on feature development as well as keeping each other's pricing in check. If one company launches a new feature and is winning customers based on it, the other will soon add it, and customers of both companies benefit. This healthy competition adds to our confidence that you can’t go wrong with either.

When debates over which to choose arise it often becomes tribal, and it's the blues (Xero) vs. the greens (QBO). Oftentimes the accountants arguing for one or the other have built their careers off supporting one software or the other and are therefore biased.

However, at the end of the day, you must choose a single software as it wouldn’t make sense to have two sets of books (unless crime were involved). So which should you choose? We give the slight edge to QBO, but want to emphasize again that you can’t go wrong with either, and both are Head West Recommended™ “So you know they’re good”.

Why you should trust us:

For this guide we’ve interviewed both CPAs and operators. We spoke with CEOs of smaller eCommerce companies and heads of finance at larger eCommerce companies. We’ve spent way too much time lurking Reddit and watching YouTube videos made by accountants. All told we’ve done over 100 hours of research that we’ve summarized into this guide. 

What we like about QuickBooks Online & Xero:

Excellent Core functionality 

Both QuickBooks and Xero have well designed products that will execute on the core functions of accounting and bookkeeping well. We won’t dive into accounting 101 here, but at the very core of accounting sits the General Ledger (GL). This is where your accounting data is aggregated and forms the backbone of your company’s “books”. Both companies products allow you to easily input data to the GL and reconcile the data once it’s there. Both products also have strong reporting features where you can create the three core financial statements: balance sheets, income statements, and statements of cash flows as well as other views of your financial data. People will quibble around specifics that make one or the other better at these core functions, but we think for the most part they are similarly excellent.    


Because your accounting software forms the core of your company's books and finances, it’s crucial that the software you choose integrates well with other software. Like Shopify forms the backbone of your eCommerce stack, your accounting software forms the backbone of your financial stack. Like Shopify, both Xero and QuickBooks rely on third-party integrations that greatly expand the core functionality of the software and make it scalable. We think both companies excel with their integrations. Xero has over 1,000 apps and integrations, and QuickBooks Online has over 750. They will both integrate with banks, payroll providers like Gusto, bill pay companies like bill.com, and expense management companies like Expensify. People will say that one or the other company has more or better integrations, but we don’t think that’s the case. There isn’t a single tool that we recommend in addition to your accounting software that doesn’t integrate with both QuickBooks and Xero. As the market leaders, partners are eager to integrate with both companies.


If your goal is to grow your business, it’s important to choose an accounting software that can scale with it. We think both QuickBooks and Xero can do that. Because of the integrations mentioned above, both tools can scale an eCommerce business to $50M in annual sales and beyond. Since switching accounting tools is a painful process, we think it's smart to choose a tool that can scale. Even switching between QuickBooks Desktop and QuickBooks Online which are made by the same company can be painful. So even if software companies market an easy switch between accounting tools - don’t believe it. Each company structures their backend data differently which will make the process of switching time consuming and difficult. Both QuickBooks and Xero have public companies that use their software which we think is testament to their scalability (the crypto exchange FTX also used QuickBooks, but that's a topic for another guide). At some point, it will make sense to switch to a more robust ERP solution like Oracle’s NetSuite or SAP, but we think QuickBooks and Xero give you the longest runway on a single tool.

Note on Scalability 

While QuickBooks and Xero are the most scalable of the accounting tools in our opinion, we would love to see one or the other build out features that could make them truly enterprise level tools like Shopify has done with Shopify Plus or Klaviyo with Klaviyo One. In order to do this, the companies would need to add permissioning and user access features that would make them more comparable to the NetSuites of the world. Additionally, they would need to add features that would increase the audit trail. 

Our Pick

QuickBooks Online

QuickBooks is the industry leading accounting software for small and medium size businesses and is our recommended tool for most eCommerce companies. [Use our link and get 30% off for 6 months]

What we like about QuickBooks Online:

Benefits to being the largest

The main reason we give the slight edge to QuickBooks over Xero (especially for US based companies) is that QuickBooks is the most popular accounting software which will have downstream benefits. To be clear, QuickBooks and Xero are both incredibly popular. They are the number one and two most popular accounting software for SMBs. However, QuickBooks is the larger of the two. As of 2023, QBO has 6.5M paying customers where Xero has 3.75M paying customers. This size advantage creates benefits for QuickBooks users. 

For the do-it-yourselfers, there is more content on the internet dedicated to troubleshooting QuickBooks problems. A quick Google search is more likely to yield results for a QuickBooks issue than a Xero issue. There are also more dedicated YouTube channels for QuickBooks where people can learn from accounting experts.

For those looking to hire outside accounting help, there are more accountants that are familiar with QuickBooks. This will let you more easily shop around for bookkeepers. Most accounting firms work with both softwares but some specialize in one to streamline their operations. You will be less likely to be turned down by an accounting firm because they only work with QuickBooks clients. If you’re hiring for internal finance roles, it will also be more likely that your candidates are familiar with QuickBooks.

Finally, if you go to sell your company, there’s a higher likelihood that the acquirer is familiar / comfortable with Quickbooks data. This can speed up the diligence and acquisition process.

A couple of notes: Quickbooks size advantage is most pronounced in the US. In international markets like Australia and the UK, Xero has the advantage. Xero is also growing faster than QBO so at some point QBO will no longer have the advantage. None of the above is binary and only means to us, at the margin, QBO is better.  

Additional benefits to QBO

QuickBooks users pointed to their bank feeds being stronger than Xeros. The US banking system has tons of regional banks with unique (bad) technology. Since they are based in the US, QuickBooks has spent time ensuring that their integrations work with all of these regional banks. Xero users might be frustrated that their bank feeds aren't working or stop working especially if they bank with a smaller regional bank.

QuickBooks comes with more transaction tagging options out-of-the-box than Xero. Xero only allows for two active tracking categories whereas QBO supports 40 in their least expensive plan. This makes Xero's data a little bit ‘flatter’, and gives QuickBooks deeper out-of-the-box analysis capabilities.

QuickBooks also allows you to create unlimited invoices on all of their plans. Xero caps out at 20 invoices per month with their Early plan, and scales up to the 1,000 invoices with their Established plan. So if you’re a business that generates a lot of invoices, you should choose QuickBooks.

We heard mixed reviews on both companies' support. Some people loved it and others thought it was the worst support ever. We think it’s a tie when it comes to support, but we do note that QuickBooks is the only company that offers live phone support [tip for Xero users: leave your phone number in your email and let them know that you’d like to be contacted via phone - this typically results in a phone call with support]. 

What we don’t like about QuickBooks Online:

Learning Curve

For those who are going to be using the software themselves and have not hired a professional bookkeeper, there will be more of a learning curve with QuickBooks. We don’t think it’s hard to learn QuickBooks and there are a lot of good resources online to get you up to speed, but that is something to consider when comparing the two options. You don’t need to be an expert accountant in order to use the software but some familiarity with basic accounting principles is helpful. 


QuickBooks is more expensive than Xero. If price is your number one concern, then you should choose Xero over QuickBooks. Quickbooks has also increased prices over the years and is likely to do so in the future whereas Xero’s prices have held more steady.

Some might be tempted to use the self-employed version of QuickBooks to save money. We don’t recommend this for eCommerce businesses. QuickBooks self-employed is designed for freelancers and won’t be able to scale with your eCommerce business like the regular version of QuickBooks will. The data is also structured in a way that will make switching from one to the other burdensome. 

This also applies to QuickBooks Desktop which people might be tempted to choose to save money. Some users find it more powerful than QBO, but it’s not Intuit's priority and new features are not being added (“It’s being reluctantly maintained, not improved” says one accountant). Additionally, it won't provide the apps and plugins that QBO has and won’t scale as well with your business. Also switching between Desktop and QBO will be cumbersome. We recommend avoiding that and starting on QBO.

The switching issue doesn’t apply to upgrading from versions within QuickBooks Online from Simple Start, to Essentials, to Plus and Advanced as the same data structure is used throughout and upgrades (and downgrades) are straightforward.


There are additional smaller things which we don’t like about QuickBooks. They have pop ups that push additional Intuit software. These can be easily dismissed but are annoying in a software in which you’ve paid good money for. Additionally, they seem to push additional products in the Intuit ecosystem more heavily than Xero does with products in their ecosystem. There are also a limited number of seats unlike Xero which has unlimited seats. Generally the number of seats are fine for each level of service but an unlimited seat model like Xero would be better. 

Broadly, QBO gives you more freedom in making changes to your books (e..g, making journal entries against certain accounts). Accountants who know what they’re doing appreciate this flexibility, but it also gives more latitude for novice bookkeepers to make mistakes. It’s a double edged sword. For this reason, we found more accountants that received QBO users whose books were in bad shape than Xero users.

Also Great


Xero is the second largest accounting software for small and medium size businesses and is our recommended tool for those looking for something that is easy to use and affordable.

Advantages of Xero:

User Friendly

If you read any article about Xero one thing that will continually emerge is the idea that Xero is user friendly. We agree. But what does that mean exactly? It shows up in small design choices in the software. For example, rather than using the debit and credit terminology they use “spent” for credit and “received” for debit. Instead of accounts receivable they use “invoices owed to you”. This language is more intuitive for non-accountants (although accountants might complain about this and prefer the accounting specific terms). Xero’s UI is generally simpler and less overwhelming for new users. Two column reconciliation is also probably faster in the Xero format than in QuickBooks. It’s important to note that the ease of use can be a double edged sword and can sometimes frustrate more advanced users and accountants. We heard accountants complain of certain accounts being locked to Journal Entries (good for preventing user error), but that it required reaching out to Xero support to find a workaround to achieve their desired outcome. Decisions like this reduce the potential for bookkeeping mistakes, but frustrate more experienced users.


As we mentioned above, there are several benefits to being the category leading software. From the ease at which you can find bookkeeping help to making it easier for potential acquirers to diligence your business. Although QuickBooks is by far the largest in the US, Xero has a larger presence internationally (especially in New Zealand where it was founded and Australia and the UK). If you are based in one of these markets, then we would recommend Xero over QuickBooks. Additionally, because of this international focus, Xero has a better VAT module than QuickBooks.  

Additional Benefits

Xero is the cheaper of the two alternatives. So if pricing is your number one concern we recommend Xero. Xero also has unlimited seats vs QBO which tops out at 25. If for whatever reason you imagine yourself needing lots of separate users, then choose Xero.

Quickbooks & Xero alternatives:


FreshBooks - FreshBooks offers affordable pricing with plans starting at $17 per month. It’s also easy to use. However, FreshBooks started primarily as an invoicing software and is geared towards freelancers and self-employed people who bill hourly or offer service based businesses. They have great time tracking and client management tools, but it isn’t as suited to the eCommerce use case as our recommended tools.

Wave - Wave offers free accounting software. So if price is your number one concern, it’s worth it to consider. But Wave does have some drawbacks. Reconciliation is more difficult and it’s harder to resolve reconciliation issues. It doesn’t have Multi Factor Authentication (MFA) so its security won't be as tight. It also has fewer native integrations than our recommended tools so you’ll have to rely on integration tools like Zapier. Additionally, it’s going to be harder to find a bookkeeper who is familiar with the platform as it’s less popular among professional accountants. Finally, the platform is designed for service businesses and lacks inventory management features that eCommerce businesses will want as they scale. 

Sage - Sage is a UK-based company founded in 1981 with a suite of different accounting products. It has the Sage 50 product (formerly known as Peachtree in the US) for small businesses, Sage Intacct for medium size businesses, and Sage X3 for medium to enterprise size companies. Sage 50 is a desktop product that is “cloud-connected” and similar to QuickBooks Desktop. Sage Intacct and X3 are web based softwares. Customers complained that Sage products were dated and lacked the modern features of our recommended tools. The Sage products also have fewer integrations than our recommended tools. Some argue that Sage products are more enterprise friendly, but we think our recommended tools can scale until your business is ready for a truly enterprise level software like NetSuite or SAP. 

Zoho Books - Zoho was founded in India in 1996 and has a suite of business software that includes over 50 apps. Among the apps are Zoho CRM, Zoho Inventory, and Zoho People in addition to Zoho Books, its accounting software. Zoho Books has a free plan (for businesses doing less than $50k per year) and pitches a tight integration with its suite of additional software. However, it lacks some of the functionality of our recommended tools which can make routine tasks clunky and time consuming. It also has fewer integrations with third-parties than our recommended tools which will force you into the Zoho app ecosystem for better or worse (likely worse). This will make it more difficult to scale with your business than our recommended tools. Finally, fewer accountants will be familiar with its software compared to our recommended tools.


NetSuite - NetSuite is a full enterprise resource planning (ERP) tool, so you can do much more than just accounting. In addition to accounting, NetSuite offers inventory, warehouse, and supply chain management and order management. We will review it more thoroughly in a future guide but likely doesn’t make sense until revenue reaches $50M+ a year.

One user said, “They make the hard things easy, and the easy things hard”, and we think that perfectly encapsulates the software. So you lose features like automatic bank feeds, but gain features like complex inventory tracking. It also has user permissioning and audit capabilities that far exceed our recommended tools. It’s also insanely expensive. The transition will likely be painful as well, so we recommend companies don’t wait too long before making the switch. 

Do it for me solutions

We’ll review each of these more fully in future guides, but wanted to put them on people’s radar. Pilot uses QuickBooks to manage your accounting while the other two offerings replace your accounting software completely and use proprietary accounting softwares.

Pilot - Pilot is an online service that uses in-house bookkeepers to manage your books and finances. Their Starter plan pricing begins at $499 per month when billed annually. They use QuickBooks online to manage your books. Note that Pilot only works with QuickBooks and you will need to migrate if you are on Xero or another accounting platform.  

Bench - Similar to Pilot, Bench is an online bookkeeping service that pairs you with dedicated in-house bookkeepers to keep your financials and books up to date. Unlike Pilot, they use a proprietary accounting software to manage your books. Pricing starts at $249 per month when billed annually.  

Finaloop - Finaloop offers to replace both your accounting software and your bookkeeper. Finaloop is exclusively focused on eCommerce businesses so they understand the pain points that are unique to eCommerce businesses. They use their own proprietary bookkeeping software but will also keep an up to date QuickBooks instance so that you can use that if you ever want to leave Finaloop. Finaloop's pricing scales based on revenue and starts at $59 per month when billed annually. 

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