Regardless of your industry or business size, you need accounting software in order to manage and track finances, send invoices, and keep your books up to date. You’ll most likely give your accountant access to the software, where they will perform more complicated functionality and run advanced reports.
Accounting software for small businesses includes features like:
- Expense Tracking
- Project Management
- Time Tracking
- Accounting Reports
- Bookkeeping Services
This article will break down the main differences between Zoho Books and Xero, two advanced accounting software platforms. We’ll discuss each product’s features, pricing, usability, and customer service. We will also make recommendations about who each tool is best for based on our personal research and interviews with current customers.
Zoho Books & Xero Comparison Summary
Zoho Books and Xero are two powerful and moderately priced accounting tools. We tested both tools in-house and they received two of the highest ratings in our accounting software category. Zoho Books received a rating of 89, and Xero got a rating of 91.
Zoho Books was given a rating of 89 because, while it’s got fantastic detail and many features, it was one of the most difficult accounting tools to use. Xero has a rating of 91 because it has similar power and features, but is much easier to use.
Here’s a breakdown of our review criteria and how Zoho Books and Xero scored in each category.
|Criteria||Analyst Rating||Features||Usability||Pricing||Customer Support|
While Zoho Books received a lower score, it’s a bit more powerful and feature-rich than Xero. Zoho Books lost the most points in the usability category, because compared with other accounting platforms, it’s clunky and difficult to navigate.
Xero is another top choice for small businesses because it offers similar features at a slightly lower cost. There are no accounting or bookkeeping services, as tools like QuickBooks Online offer, but it has nearly everything else. The only major drawback we noted with Xero is that reports did not always generate on demand. Xero pricing ranges from $11 per month to $62 per month, making it slightly cheaper than Zoho Books.
Here’s who we recommend each platform for:
- You conduct business with clients and vendors from many different countries
- You have a product-based business that requires somewhat advanced inventory tracking
- You already use, or intend to start using, any of Zoho’s other products
- You prefer your software tools to have a modern interface and a more manageable learning curve
- You’d like connections to more than 800 applications with the Xero Marketplace
- You want to easily track project profitability and time spent on projects
Table of Contents
- Zoho Books & Xero Comparison Summary
- Who Should Purchase Zoho Books?
- Who Should Purchase Xero?
- Zoho Books & Xero Price Comparison
- Zoho Books & Xero Feature Comparison
- Bottom Line
Who Should Purchase Zoho Books?
Zoho Books is a detailed and full-featured accounting software with more advanced inventory management features than competitors offer. It comes at a very reasonable price.
One notable benefit is that Zoho Books is a product of Zoho, which has software applications for CRM, finance, IT management, electronic signature, and many more. This means that if you sign up for one Zoho tool, you can easily connect it with all the other applications in the Zoho suite for a seamless collection of applications.
While testing the tool, we found that the biggest drawback is the lack of user-friendliness. The interface is outdated in appearance, especially when compared with newer software tools like Wave, FreshBooks, and Xero. However, if you don’t mind taking some extra time to learn how to use the software, you’ll be rewarded with one of the most powerful accounting tools available.
Who Should Purchase Xero?
Xero is a powerful software that we broadly recommend to all small businesses. It has more than 50 included reports, pre-built connections with more than 800 third-party software tools, and a manageable balance of being advanced yet user-friendly.
We recommend either the Growing Plan or the Established Plan because the Early Plan is significantly limited.
Zoho Books & Xero Price Comparison
Xero is a bit cheaper than Zoho Books, with pricing from $11 per month to $62 per month. Zoho Books pricing ranges from $20 per month to $70 per month. Each software has three plans to choose from, which gives customers sufficient choice between affordability and functionality.
Zoho Books Pricing Details
Zoho Books pricing starts at $20 for three users. There’s a $50 per month plan that includes five users, and a $70 per month plan that includes ten users. The cheapest plan with Zoho Books offers significantly more functionality than Xero’s entry plan, so much so that we would not recommend Xero’s entry plan unless you’re just starting out as a freelancer.
Xero Pricing Details
Xero pricing starts at $11 per month and tops out at $62 per month. As mentioned above, the $11 per month plan is not quite enough for most businesses to utilize, so you’ll most likely choose the mid-tier plan or the most expensive plan.
Zoho Books & Xero Feature Comparison
Zoho Books and Xero are very comparable in terms of features. Zoho Books tends to be a bit more detailed, but that comes at the cost of user-friendliness. You can track time and projects with both tools.
|Vendor & Client CRM||Yes||Yes|
|Accounting & Bookkeeping Services||No||No|
Top Features: Zoho Books
Zoho Books has a relatively helpful dashboard, clean and easy-to-view invoices, and a fairly extensive reporting section. Customers we spoke with also mentioned that there are advanced workflow automations that save time. For a full description of the main features offered by Zoho Books, check out our full Zoho Books review.
The Zoho Books dashboard provides a quick overview of your receivables, payables, and a graph of your business cash flow. A helpful feature is the ability to drill down into each section of the dashboard, which brings you to that tab within the software and eliminates unnecessary steps to get to different areas.
Creating and sending invoices is probably the easiest thing to do in Zoho Books. There are 16 included invoice templates and you can create your own unique invoices as well. We found it helpful that you can view invoices while still having a list of all of your invoices on the left, as shown in the image below.
Zoho Books and Xero both offer the most important accounting, finance, and tax reports. Zoho also offers a product called Zoho Analytics, which you can purchase and integrate with Zoho Books in case you require particularly advanced reports.
Top Features: Xero
Xero has a powerful yet easy-to-use inventory management feature, a relatively advanced dashboard, and an extensive marketplace of integrations with other applications. For a full review of Xero, check out our Xero review.
Products and Services
To manage your inventory and services, Xero allows you to assign a unit price, tax rate, sales or cost of goods sold account, and description to every item you input into the system. You can choose to track items as tracked inventory assets to prevent you selling past your in-stock inventory.
Xero’s dashboard is more advanced and customizable than the one you get with Zoho Books. You can drill down into any graph or line item, and you can also re-order the dashboard to show your preferred sections first.
With over 800 connections to third-party tools, there’s a very low chance you won’t be able to connect other business software platforms you already use and need. The tools are also categorized by industry, which is helpful as tools relevant to your industry are pre-sorted. Xero also automatically integrates with Hubdoc.
Zoho Books and Xero are relatively comparable in every way, so your decision will likely come down to your preference regarding the user-friendliness of your software tools and the other software application your business uses.
If you already use other Zoho products, you should choose Zoho Books for the ultimate ease of connection between your platforms. If you want something with comparable power but that is much more user-friendly, opt for Xero.
- Zoho Books is a very powerful accounting tool with inventory management, multi-currency functionality, and advanced automation workflows. Choose this if you’re a bit more tech-savvy or already use other Zoho products.
- Xero is a similarly powerful product that’s much more user-friendly. Xero is also a bit cheaper than Zoho Books.