Xero vs QuickBooks Online From a Salesforce Perspective

Online Accounting Software

Salesforce started 15 years ago and boldly forged a new path, convincing people to trust the cloud with their Sales & CRM software.

Accounting, more conservative and risk averse, has taken a lot longer to appear on the cloud. Xero limited itself to the New Zealand market until it entered the Australian market in 2011, and the US/UK market in 2012. QuickBooks Online had a rocky start, and only took off after it was rebuilt in 2013. So these two cloud accounting packages are just getting started.

 

And each application is growing quickly, and competing for mind-share and market share. The image shows the search volume over the last decade for “Xero” and “QuickBooks Online” from Google Trends. No other cloud accounting tool has even 10% of the market these two have.

And, each is establishing local dominance. QBO has about 10 times more customers in the US then outside of the US, whereas Xero has 10 times more customers globally than in the US.

 

Working with Salesforce

This article is written to help you pick the best cloud-based accounting software presuming you have, or will soon have, Salesforce as well. Using a cloud accounting tool like Xero or QBO makes sense. If your CRM is on the cloud, and accessible from every computer and mobile device, why not run your accounting from the cloud?

 

Let’s dive in and look at QBO vs Xero by features, keeping in mind that you have Salesforce.

 

Quotes and Estimates

Xero calls them Quotes, QBO calls them Estimates. You might call them proposals or bids. In any case, we recommend you ignore this feature entirely. Why?

Quoting is a job for your sales team, not the finance department. Your finance system should start recording data when the sale is made, not in the middle of a Sale. The sales process largely stops when the customer agrees to the sale, and then sales (or finance) creates the invoice, and finance is responsible for collections.

 

If you have Salesforce there’s no strong reason to use Xero / QBO for quotes. Here’s a few of the reasons to use Salesforce Quotes instead of quoting through Xero/QBO.

– Salesforce’s Products are far more sophisticated than the Products in Xero or QuickBooks Online.

– QBO has a 5 user limit, so using QBO Quotes is not possible for more than a few people on your sales team.

– No integration exists to copy information from Xero/QBO Quotes back to Salesforce.

– Salesforce Quotes allow you to record each quote sent and everyone in Salesforce can see a record of the quotes sent.

 

We recommend using Salesforce Quotes & Opportunities, and when the sale is closed, passing the sales information to Finance (or using an integration tool to create the Invoice for you).

Inventory

Both Xero and QBO handle inventory, and record inventory count so can tell you how many of an item you have left.

But, as you also have Salesforce, you might want Salesforce to have some level of integration with your inventory. In that case, Xero’s Inventory Code matches up well with Salesforce’s Product Code. QBO doesn’t have an Inventory code, so matching is limited to a Product Name.

This can make a difference in third party integrations. Unleashed, which helps you manage inventory and complex physical order processing, syncs between Salesforce and Xero using the Inventory Code. Unleashed also syncs between Salesforce and QBO, though is limited to QBO’s Product/Service Name as QBO doesn’t have a Product Code.

 

Integrations

We’ve touched on Inventory Integrations, in which Unleashed is the strongest. But what about accounting integrations?

There are a handful of integrations out there, though currently only Breadwinner offers out-of-the-box two way integration, meaning you can see a live copy of the Invoice data back in Salesforce, and also see in Salesforce if the invoice has been issued or not, or is paid, due or overdue. Breadwinner has a dedicated app for each, Breadwinner for QuickBooks Online, and Breadwinner for Xero.

Other integrations exist, though they only offer a one-way integration, which triggers data flow from Salesforce to Xero, or Salesforce to QBO. The list includes Zapier, OneSaaS, Workato, Autofy, or Carry The One.

 

Custom Fields

One of the big surprises, coming from the Salesforce world, is that you can’t create custom fields in either Xero or QuickBooks Online.

You do have limited ability to create custom picklists, however.

In Xero, you can have up to two picklists on your Invoice Line Items. These are called Tracking Categories, and in fact can apply to every single transaction in Xero, not just Invoice Line Items. No custom fields exist at the Invoice level, just the line item level. Customers will never see these.

QuickBooks is a bit more flexible, offering up to 3 custom fields, and a fourth custom field that’s editable called the Location field. These are also picklist fields, and they are at the Invoice level, not the line item level. So the value has to apply to your entire Invoice, not just a single line item. QBO also has a little-known feature called Classes, which can be set at the Invoice level or the Line Item level.

That’s the extent of custom fields. People frequently ask how they create a custom text or date field on their Invoice in both Xero and QBO. But, with your accounting system you are limited to a very small number of fields.

 

Invoices vs Line Items

As we mentioned above on the Custom Fields section, Xero is more Line Item focused, and Intuit QBO is more Invoice focused. The same goes for Discounts and Taxes.

In Xero, discounts are applied per-line item. This is particularly handy coming from Salesforce Opportunity Products, which have a discount field (often hidden due to default Salesforce security settings) on their line items. QuickBooks Online only offers discounts on the whole invoice, not by line item.

Taxes in Xero are also applied per line item, whereas QBO has less flexibility with taxes. In QBO a single tax code must apply to the entire invoice (though line items can be individually set to taxable or not). If you are using Salesforce and have complicated tax rates (i.e. multiple states or other complexities), you can also consider Avalara, which has a Salesforce integration to help you determine the correct tax rate. While Avalara integrates directly with Xero and QBO (and hundreds more), you might want to use their Salesforce integration to get real-time sales tax rates directly into Salesforce on the Opportunity, Order or Quote.

If you use Opportunity Products (Line Items) on your Opportunities, and have more than one tax code, or want to set discounts on a per-line basis, you may find that Xero’s approach to discounts and taxes is a better fit than QBO.

 

Summary

Your accountant may have a strong preference for Xero or QBO, and it’s worth considering their advice. But, depending on how you approach inventory, discounts, taxation, custom fields, and other factors, you may want to use one or the other as it best fits your needs.

 

Stony Grunow
Stony Grunow has been consulting on the Salesforce Platform for seven years, and has specialized in integrating Salesforce with SaaS Accounting packages the last three years. He has talked to hundreds of companies using Salesforce and one of either Xero or QuickBooks Online.