Below we will be looking at a quick comparison overview of Xero Accounting, QuickBooks online and Zoho Books. First of all, we want to answer the question why use an accounting software to organize your business records and why in today’s world cloud computing software is an excellent option for growing businesses.
- First of all, an accounting software enables records to be organized according to accounting practices and concepts. The benefit of an organized record is that it makes the information more readable and comparable.
- Secondly, it enables the business to ensure that it is compliant by effectively keeping track of revenue and cost milestones, especially for tax purposes or financial covenants.
- Thirdly, it gives an effective and efficient way to calculate profit and loss for the business. You will also be able to compare years of business activities, so that you can ascertain in real term how your business has grown or what could have contributed to its failure.
Zoho Books
Zoho books offers a free version to start with. This option targets new professionals or service businesses. You will not be able to send a tax invoice or accumulate information on tax paid/payable nor track inventory. If you are a freelancer and you have just started your business, Zoho Books may be right for you. There are a few things in Zoho Books that may also seem complicated, which relates to some of its features that originally geared towards businesses in India. These features can be quite confusing to persons who do not practice accounting. The difference between Premium and Elite version in the Zoho Books table below is that Elite offers analytical reporting in addition to the features offered in the Premium version.
PROS: Zoho Books comes with a free version and is perfect for freelancers and service base businesses that are just starting out. Zoho has a document reader integrated, which allows for easy entry of Bills and expenses. With Zoho it is possible to import data for almost anything.
CONS: The software can become expensive for new startups that need an inventory management system; and there are very few third-party applications that integrate with Zoho Books.
QuickBooks
Is the oldest of all the three other software mentioned here, released in 1996. It is one the go to accounting software by small businesses. QuickBooks started out as a traditional desktop software but in recent times has been pushing more than ever its cloud accounting software. In hindsight its biggest rival is Xero, however, Zoho may also be counted as a competitive rival. QuickBooks is quite good and easy to use, however, QuickBooks only has one mobile app to do everything, and the number of users are limited.
PROS: This software is perfect for startup and micro businesses that need an accounting software and an inventory management system at reasonable price. Almost all third-party applications are likely to integrate with QuickBooks than any other cloud accounting software. Get 20% discount on QuickBooks Plus, you won’t find this deal anywhere else in the Middle East.
CONS: The software is not positioned to deal with complex transactions or businesses with complex arrangements. There are only a few upload options. For example, you can’t upload the business budget, this is a painful manual process. The software can be quite bulky and slow at times, and actionable steps are not sequential.
Xero Accounting
Xero seems to be the most expensive of the three, however, there are reasons for this. Xero offers unlimited users, payroll functionality, customized invoicing templates and customized reports, dashboard and analytics. Xero has extensively invested in reporting more than the other two software on offer. Xero also integrates with many third-party systems and apps that makes the software robust and easy to use. With Xero you can customize almost everything, from document templates to customized reporting that suits your brand and reporting needs.
PROS: Xero is great for all types of businesses, especially if your business is growing and need functionality and a software that works. The software is easy to use and understand and integrates with thousands of third-party applications so that you don’t have to do any heavy lifting. Unlike Zoho that limits its document reader, Xero’s document reader is free for all users, making transaction entry quicker.
CONS: The software is a little bit more expensive than the Zoho and QuickBooks starter version.