Quickbooks Online vs. Xero which is the best for your tea business in 2019?

Starting a new tea business or trying to update your system will bring you to question yourself about which accounting system is best for your business. At Tea Ledger, we have a long experience using both online and offline accounting apps, and we saw the change in the market, everything is and will continue to be cloud-based. The old accounting software installed with a CD is already history. Of course, our vision is based on small and medium-sized business (SMB) point of you. The big corporations will be joining the team of cloud accounting shortly ;). Here is a small review comparing Quickbooks against Xero that might help you in your decision.

In the last few years, we saw multiple cloud accounting software battle against each other like Quickbooks, Xero, Wave, Zoho … Only two are at the top and dominate the market. Quickbooks does have the most significant portion of the pie with a 3.6 M subscriber followed with Xero at 1.6 M subscribers. Both are growing fast QBO at a passe of 41% in 2018 and 34% for Xero. What does this finally means for you as a tea fan? Two things. First, both solutions are a good solution for your accounting system with more than 5M subscribers that means they are here to stay. Second, with their growth rates, they will be an improvement to see during this year. That said both platforms are investing a lot in perfecting their apps by adding new features or making them more user-friendly.

We will be comparing their features from a tea business point of you to help you make the best decision for your business.

Invoicing

This feature is not the most important for tea shops or tea houses, but it could be interesting if you are a wholesaler or if you offer workshops. Both apps have had excellent invoicing features. Below is a chart comparing between Xero and Quickbooks mains options.

Both apps offer all the essentials options for tea businesses. Quickbooks has a small advantage which is fewer click to send an invoice.

 

  • Quickbooks: 4.5/5
  • Xero:   4/5

Bank feed

This features made the cloud accounting possible and even made them a challenge for desktop apps when cloud accounting started. This saves at least 30 min per account per business a month. For a small business with one chequing account and one credit card that is one day and a half per year saved in unproductive paperwork. Both Quickbooks and Xero do connect with most of the Canadian banks. Here is a small chart of Canadian banks top ranked by the CFIB.

 National ScoreQBOXero
Credit Union7.2**
ATB Financial5.5YY**
Scotiabank4.8YY**
National Bank4.7YY**
CIBC4.7YY**
RBC4.4YY**
BMO4.3YY**
TD Canada Trust4.3YY**
Desjardins4.3YY**
HSBC3.0YY**

  *Depending which one
**Connection through Yoodle.

Both apps do connect with most of Canadians banks. Unfortunately, Xero does not sync directly to Canadian banks (which may change in the next few months) they use Yoodle which is a third party that brings your bank feed to Xero. Quickbooks from his end does connect directly to most banks. This means that with Xero you might need to update your connection to your bank account a few time a year. Based on a test with had last year, we connected the same RBC account to Quickbooks and Xero. Results QBO worked fine for more than a year, Xero, on the other hand, needed to reconnect to the RBC account once in every other month.

  • Quickbooks: 5/5
  • Xero:   3/5

Bills

Quickbooks and Xero are at the same point. They both have the same options at the same time to book a new expense or to pay one. Both can be sync with an external payment system like Plooto. Moreover, both lake the management of bills option that other apps offer like Receipt bank or Hubdoc which make the bookkeeping automated and less time-consuming.

Xero bought Hubdoc last year, which boost Xero presence in Canada a Hubdoc is a Canadian SAAS. Xero will probably integrate Hubdoc in its core bill management process. However, only the future will tell us. Keep on track we will publish an article comparing Bills management system separate to this article.

  • Quickbooks: 3.5/5
  • Xero: 5/5

Sales tax

QBO is 100% adapted to Canadien (GST, HST, and all PSTs) it even has a particular module to manage sales tax and prepare your tax return. Xero, on the other hand, is improving especially with their latest feature of nonrecoverable taxes, but you still need to make your tax return in excel after exporting the sales tax reports.

  • QBO: 5/5
  • Xero: 4/5

Reports

Quickbooks Vs Xero in the reporting battle is a tight one. An SMB will find all reporting they need from the basic P&L and balance sheet to budgeting, sales tax, and aged payables… You can always connect other apps like Fathom to have access to different KPI’s

  • QBO: 5/5
  • Xero: 5/5

Payroll

Nothing to see here. Xero has a payroll module but only for the USA, not Canada. Qbo does offer payroll for Canada, but Wagepoint powers it a third party. The worst in this is that WAgepoint cost less if you buy it directly through them then with QBO. For ten employee you pay 40$ to Wagepoint and 72$ to QBO. The basic module at 20$ does not automate tax filling; Year-end reports neither ROEs.

  • Quickbooks: 4.5/5
  • Xero: 4/5

User-friendly

In a subjective point, at Tea Ledger, we prefer QBO design, more appealing than Xero. However, both are quite easy to approach with minimum accounting knowledge. However, don’t forget that both have a learning curve to master their potential. That it is due to how much capabilities and options they have.

  • Quickbooks: 4.5/5
  • Xero: 4.4/5

APPS

Both QBO and Xero do connect with most of the apps they both have a large market place. They both can’t develop every single feature or option to process all your workflow, and they are well aware of that. This is why they open their API to the developer so they can connect their services with them.

It would be best if you thought about your accounting software as the core of your system, and then you add other apps to automate more your specific workflow depending on your needs. Per example for a tea business the inventory and the POS part are highly significant we don’t recommend the modules included in QBO or in Xero to handle them because they are limited for tea businesses needs. For the store side, we would recommend adding Vend to manage your inventory. To maintain your payable more efficiently we would suggest adding PLooto to your workflow.

This apps gives you access to a highly customizable workflow that you can design with the help of your accountant to save you time and help you take the right decision at the right moments.

  • Quickbooks: 5/5
  • Xero: 5/5

Pricing

Finally the pricing, many of you this is what you were looking for at the beginning of this article. However, this should not be your main decision point. You will probably be paying the same, for a tea house, the recommended plan is Standard in Xero which cost USD 30 (CAD 39.84) and the plus plan with QBO which is at CAD 40. Yes, you might save few bucks for fewer options but more your business grows more you will need them.

At Tea Ledger, all apps fees are already included in your plan. The apps are just the tools that save you time and help you make the right decision without a timely bookkeeping  and a good design workflow none of the apps will be relevant

  • Quickbooks: 5/5
  • Xero: 5/5

Verdict

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