Hey, my buddy Seth! Didn't realize this was your video until I started it. I agree with one of the other comments that said you focused too much on the reporting and not enough on the actual use of Xero... which I find to be way cleaner and easier to understand, especially for those new to accounting. (And frankly, that's where you spend 95% of your time.) Also - on the deposits issue... there is a feature called Prepayments that works beautifully for what you described and makes the need to run a balance sheet detail report obsolete. With that said, love your teaching style even though we don't always share opinions. :)
I am using Australian version Quickbook and Xero. I personal perfer Quickbook over Xero. As the bank reconciliation part is very important in accountant part of view. Xero only provide the summary report for bank reconciliation and you can’t get details listed. While Quickbook is doing the normal way as MYOB. It is very easy and clear to find out if there is any duplicated transactions you need to detecte. Another part is in payroll section. In Xero, if you want to change the pay run date, you have to go back to the payroll setting to set the different date. While in Quickbook, you can simply choose the different date when you run the payroll.
Sir you did not compare class and job option , expense sub account option , QBO give to profit loss statement by class if we have 3 branches we can post invoice and expense bill branches wise and check profit profit loss branches wise but i think xero is not giving you that option , we can manage account receivable salesmen wise in QBO but xero is not giving you that option also. we can see profit loss statement profit/job wise in QBO but xero also not give this option
Hey David, I am starting a cloud based accounting firm and was wondering what you use for your clients. Do you do all your business work on regular QuickBooks online or do you use QBO accountant? Thanks!
Seth, as always you are right on!! Some time ago I reached out to you, you were informative and professional; I've recently begun my outsourcing bookkeeping/accounting, tax, and consulting services an was not that impress with Xero accounting software. After your comparative analysis, I'm convinced that QBOL-Accountant is the best accounting software for my accounting business model. Being a trained US GAAP accountant, the indirect method is what I advise my clients to implement for those business owners seeking to sell their business , down the road. GOD Bless, I look forward to learning more from you in the very near future. Arthur J McGlothen Jr & Co., PLLC
I could not reproduce the charging statement balance problem in Xero; bank statement balance stays the same even when unreconciling transactions. As for the income statement report by month, the timeline can be reversed in Report Settings (oldest months to the left).
This is all directed at QBO and taken from a forum posted on March 8, 2018, have you experienced any of these bugs. My company bookkeeper said to stick with the desktop version, she also said there were way to many bugs and I just talked to her today 1-24-19. 1. Have they fixed the Create a Sales Receipt bug yet resetting to zero? 2.Transactions that were previously cleared in the reconciliation suddenly reappear as uncleared. Yet the beginning balance is correct. If I try to clear these reappearing transactions, it throws the beginning balance off. 3.Continuing issue with one client where an expense is imported through a bank feed, then turned into a Bill Payment by applying outstanding bills to the payment. Everything looks correct and they save the transaction. The expense turns into a Bill Payment with no bill applied. The process needs to be repeated a couple of times for the payment to stay applied against the bills. However, the next time you open up that Bill Payment, it shows as unapplied again. Usually 3-4 repeats before the payment application sticks. 4.On a regular basis when trying to split lines on a transaction coming in from bank feeds. If it is split, then it returns an error that the "Services" item isn't attached to an Account. The problem is that I wasn't using items, only the accounts. 5.This year when I created the new budget it was fine. When I went back in to add in new clients and change the "unspecified" customer income amount. All of the expenses which are under "unspecified went blank". I called customer support and he could see that my budget report still showed the amount but the screen was blank. Then about five minutes into the call the report changed as well. He put in a ticket. I rolled back my data using ChronoBooks but unfortunately that does not back up budget information. I waited a few weeks and tried again and was able to replicate the problem.
Very informative video. Thanks for your efforts on this. I'm a CFO of a nonprofit. We intend to reorganize legally to break our existing one company into four, but afterwards it will still be essentially the same organization. Its unclear to me how well QBO handles multiple companies. Do you know if this is possible to do this in QBO?
You will need 4 different QBO accounts with 4 different logins. It's very annoying. In Xero you will be able to do everything with 1 login. You will simply have 4 different companies within 1 login.
Great video Seth, thank you. On the UK version Xero seems to have solved the bank statement issue and created new reports by customer to provide your AP and AR balances by Supplier/ customer. They must be listening :) In the UK from my experience we use the direct method for the cashflow. I do agree with you the indirect QBO method is much better. My issue is that on both systems credit notes do not show when you are matching the bank feeds.
Thanks. When a credit note is refunded on a single transaction Xero and QBO and Sage cloud only let you match money coming into the bank with sales invoices. The programming needs to change to allow supplier credits to be allocated to money coming into the bank.
Cash flows deals with CASH FLOWING into company. Starting with net income is bogus because it bakes in receivable income and then has to back it out. And includes depreciation which must also be backed out. Yikes. Most business people naturally comprehend the de-accrual nature of Direct cash flow which is much more intuitive. Xero uses that as you pointed out and starts with receipts from customers. CASH FLOW IN which is much more useful. I encourage you to reconsider the direct message, which is entrepreneur FRIENDLY. INDIRECT method is pretty worthless. They both get to the same Operational cah flow provided bottom line. As an entrepreneur you surprise me that you prefer Indirect method. That accounting professor made a lasting impression on you. 😜
The reason why the two statement of cash flows are different is that Xero uses the direct method and QBO uses the indirect method. Accounting 101. A major problem with QBO is that the cash flow statement does not show what cash is comprised of. If it were in there we could tell that the damn thing doesn't quite balance. It says cash at end of period is 4063.52, but that doesn't match cash on the balance sheet. Undeposited funds is the difference. I tried to change it to cash on the chart of accounts, but it didn't let me change it. QB desktop is much better.
As an Accountant Consultant myself. QBO reports work really well and serves my clients. In South Africa QBO is my software of choice. I think Xero has more flexibility in its capturing capability which appeals more to business owners and it's users. Love the competition as it allows for innovation and continuous improvement. The user is ultimately the biggest winner!
Great job explaining that, thank you, I did learn something. I am trying to decide which one of these two programs to get. I am starting a business and want to learn all I can!! I will check out some of your other videos to gain some more knowledge!!
Hi, great video. I have tried to replicate the bank statement error in the UK demo company and cannot. I did the same thing as you. Are you still finding this error?
This concentrated on reporting with no time spent on ease of entry of data in the first place. Reporting comes after data. Sadly this did not help to decide in the contaxt of a practising accountant with clients entering data and how easy or otherwise it would be for them.
When you are trying to convert a committee to the idea that switching to accounting software, will mean that they are able to easily bring up a customer's invoicing and payment history . .. now THAT is a good 'selling point'. We are talking the difference between having to carefully read through multiple pages of hand-recorded entries, with simply pushing a few buttons on the accounting software! I'd actually be disappointed if I had chosen accounting software that didn't do this. Good thing that I chose QB.
Hey, my buddy Seth! Didn't realize this was your video until I started it. I agree with one of the other comments that said you focused too much on the reporting and not enough on the actual use of Xero... which I find to be way cleaner and easier to understand, especially for those new to accounting. (And frankly, that's where you spend 95% of your time.) Also - on the deposits issue... there is a feature called Prepayments that works beautifully for what you described and makes the need to run a balance sheet detail report obsolete. With that said, love your teaching style even though we don't always share opinions. :)
Great comparison and thanks for sharing such an in-depth comparison.
Xero Income Statement EDIT LAYOUT.... will that fix the columns?
You really helped me deciding , thank you.
Great comparison and huge value add. Sold me on QBO which is a decision I needed your help with 👍🏼
Thanks for this video - extremely helpful. Can see why you chose quickbooks
I am using Australian version Quickbook and Xero. I personal perfer Quickbook over Xero. As the bank reconciliation part is very important in accountant part of view. Xero only provide the summary report for bank reconciliation and you can’t get details listed. While Quickbook is doing the normal way as MYOB. It is very easy and clear to find out if there is any duplicated transactions you need to detecte. Another part is in payroll section. In Xero, if you want to change the pay run date, you have to go back to the payroll setting to set the different date. While in Quickbook, you can simply choose the different date when you run the payroll.
Sir you did not compare class and job option , expense sub account option ,
QBO give to profit loss statement by class if we have 3 branches we can post invoice and expense bill branches wise and check profit profit loss branches wise but i think xero is not giving you that option ,
we can manage account receivable salesmen wise in QBO but xero is not giving you that option also.
we can see profit loss statement profit/job wise in QBO but xero also not give this option
Xero aging report rocks! 😎
Hey David, I am starting a cloud based accounting firm and was wondering what you use for your clients. Do you do all your business work on regular QuickBooks online or do you use QBO accountant? Thanks!
Love this. Just got certified in Xero today, but I didn't know these differences existed until your video. Thanks!
Great introduction and comparison. Especially, thanks for the honesty.
What are your thoughts on the 2020 versions? Still same issues? Still same conclusion?
Thank you! :)
Thank you for this awesome review. Definitely helped me decide.
Thanks for that. Any thoughts on Quickbooks self employed?
Have to agree with your assessment, thank you for side by side comparison.
Seth, as always you are right on!! Some time ago I reached out to you, you were informative and professional; I've recently begun my outsourcing bookkeeping/accounting, tax, and consulting services an was not that impress with Xero accounting software. After your comparative analysis, I'm convinced that QBOL-Accountant is the best accounting software for my accounting business model. Being a trained US GAAP accountant, the indirect method is what I advise my clients to implement for those business owners seeking to sell their business , down the road. GOD Bless, I look forward to learning more from you in the very near future. Arthur J McGlothen Jr & Co., PLLC
I could not reproduce the charging statement balance problem in Xero; bank statement balance stays the same even when unreconciling transactions. As for the income statement report by month, the timeline can be reversed in Report Settings (oldest months to the left).
Is some of Xero's features updated since this video?
This is all directed at QBO and taken from a forum posted on March 8, 2018, have you experienced any of these bugs. My company bookkeeper said to stick with the desktop version, she also said there were way to many bugs and I just talked to her today 1-24-19. 1. Have they fixed the Create a Sales Receipt bug yet resetting to zero? 2.Transactions that were previously cleared in the reconciliation suddenly reappear as uncleared. Yet the beginning balance is correct. If I try to clear these reappearing transactions, it throws the beginning balance off. 3.Continuing issue with one client where an expense is imported through a bank feed, then turned into a Bill Payment by applying outstanding bills to the payment. Everything looks correct and they save the transaction. The expense turns into a Bill Payment with no bill applied. The process needs to be repeated a couple of times for the payment to stay applied against the bills. However, the next time you open up that Bill Payment, it shows as unapplied again. Usually 3-4 repeats before the payment application sticks. 4.On a regular basis when trying to split lines on a transaction coming in from bank feeds. If it is split, then it returns an error that the "Services" item isn't attached to an Account. The problem is that I wasn't using items, only the accounts. 5.This year when I created the new budget it was fine. When I went back in to add in new clients and change the "unspecified" customer income amount. All of the expenses which are under "unspecified went blank". I called customer support and he could see that my budget report still showed the amount but the screen was blank. Then about five minutes into the call the report changed as well. He put in a ticket. I rolled back my data using ChronoBooks but unfortunately that does not back up budget information. I waited a few weeks and tried again and was able to replicate the problem.
Very informative video. Thanks for your efforts on this. I'm a CFO of a nonprofit. We intend to reorganize legally to break our existing one company into four, but afterwards it will still be essentially the same organization. Its unclear to me how well QBO handles multiple companies. Do you know if this is possible to do this in QBO?
You will need 4 different QBO accounts with 4 different logins. It's very annoying. In Xero you will be able to do everything with 1 login. You will simply have 4 different companies within 1 login.
Great video Seth, thank you. On the UK version Xero seems to have solved the bank statement issue and created new reports by customer to provide your AP and AR balances by Supplier/ customer. They must be listening :) In the UK from my experience we use the direct method for the cashflow. I do agree with you the indirect QBO method is much better. My issue is that on both systems credit notes do not show when you are matching the bank feeds.
Because a credit note is not a cash activity. (When you receive cash against credit note that will be shown there)
Thanks. When a credit note is refunded on a single transaction Xero and QBO and Sage cloud only let you match money coming into the bank with sales invoices. The programming needs to change to allow supplier credits to be allocated to money coming into the bank.
Cash flows deals with CASH FLOWING into company. Starting with net income is bogus because it bakes in receivable income and then has to back it out. And includes depreciation which must also be backed out. Yikes. Most business people naturally comprehend the de-accrual nature of Direct cash flow which is much more intuitive. Xero uses that as you pointed out and starts with receipts from customers. CASH FLOW IN which is much more useful. I encourage you to reconsider the direct message, which is entrepreneur FRIENDLY. INDIRECT method is pretty worthless. They both get to the same Operational cah flow provided bottom line. As an entrepreneur you surprise me that you prefer Indirect method. That accounting professor made a lasting impression on you. 😜
very helpful, thank you
The User Interface Experience for ZERO is AWESOME!!! Much cleaner than QB! Sweet
It's xero not zero....
The reason why the two statement of cash flows are different is that Xero uses the direct method and QBO uses the indirect method. Accounting 101.
A major problem with QBO is that the cash flow statement does not show what cash is comprised of. If it were in there we could tell that the damn thing doesn't quite balance. It says cash at end of period is 4063.52, but that doesn't match cash on the balance sheet. Undeposited funds is the difference. I tried to change it to cash on the chart of accounts, but it didn't let me change it.
QB desktop is much better.
As an Accountant Consultant myself. QBO reports work really well and serves my clients. In South Africa QBO is my software of choice.
I think Xero has more flexibility in its capturing capability which appeals more to business owners and it's users.
Love the competition as it allows for innovation and continuous improvement.
The user is ultimately the biggest winner!
Great job explaining that, thank you, I did learn something. I am trying to decide which one of these two programs to get. I am starting a business and want to learn all I can!! I will check out some of your other videos to gain some more knowledge!!
Hi, great video. I have tried to replicate the bank statement error in the UK demo company and cannot. I did the same thing as you. Are you still finding this error?
Excellent. Thanks, Seth. You've helped me figure out a number of things about basic accounting.
This concentrated on reporting with no time spent on ease of entry of data in the first place. Reporting comes after data. Sadly this did not help to decide in the contaxt of a practising accountant with clients entering data and how easy or otherwise it would be for them.
When you are trying to convert a committee to the idea that switching to accounting software, will mean that they are able to easily bring up a customer's invoicing and payment history . .. now THAT is a good 'selling point'. We are talking the difference between having to carefully read through multiple pages of hand-recorded entries, with simply pushing a few buttons on the accounting software! I'd actually be disappointed if I had chosen accounting software that didn't do this. Good thing that I chose QB.
Great feedback and analysis. I intended to use the app for a cafe business, I hope I succeed
i also tried to explain myself what that statement balance means, never succeeded.
perhaps time for an update with new features?
Incredibly helpful. Thank you.
This was very helpful, thank you.
Thank you for the deep dive. Really helpful!
Thank you! Very helpful!
Thanks for sharing.