In the previous article we talked about the parts that make up any accounting software. In this article, I get more specific by comparing features in QuickBooks, Xero and Freshbooks, the top 3 accounting online solutions ( based on the amount of requests I get to evaluate software choices) in the market.
I will be comparing cloud software using the core components of an accounting information system namely inputs, processes, outputs, checks and balances. All 3 systems are all stored in the cloud and have the same advantage as any cloud accounting software.
QuickBooks, Xero and Freshbooks comparison
|Inputs||The following ways can be used to input data:|
Customer or vendor center: this is useful in analyzing customer or vendor history and tracking customized customer information
Beside these centers, QB provides a top level menu to easily add transactions. For example: enter bills, purchase orders, invoices, etc.
|Menu entry ( no customer or vendor centers):||Enter transactions with ( all these features are great for the freelancer):|
|Processes||These processes are suited for businesses that need more checks and balances. For instance|
Customers and sales
Vendors, purchases and inventory
Easy to invite accountant and team members. Invitations are limited to your plan
|To manage customers at the same level as QuickBooks you will need to integrate with another service like harvest.|
These processes are better suited for the small business who works with an external accountant. Very easy for the self-employed who has no accounting background to adapt.
Easy to invite accountant and team members. You can invite unlimited users
|Great for the freelancer – does more advanced time tracking and collaboration tools.|
Easy to invite accountant and team members
|Outputs||Allows customized report. Here is a list of pre-determined reports|
Manage Accounts Receivable
Manage Sales Tax
Manage Employees (Need to subscribe to payroll to get more reports)
|Ability to create custom reports by using the tracking feature|
Inventory items summary
Movements in equity
Foreign Currency reports
Payroll reports (not available for all states and includes an additional fee)
For Accountants & Bookkeepers
|Checks and Balances||Customer and vendor centers|
Audit trail reports (who did what when)
|Single entry accounting system. Not made for those who need more extensive internal control|
|Who is it for||QuickBooks is more for the business owner with little accounting background or plans to completely outsource bookkeeping||Xero is focused on the business owner by removing jargon so non accountants can use accounting software in ease. It is more intuitive for the non-accountant savvy business owner who is interested in the basics needed to keep accurate books so they can get on with their business. This business owner also plans to work with external accountant or bookkeepers||For the freelancer who needs more advanced tracking and invoicing features.|
Full disclosure: the QB link is an affiliate link.
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