Xero vs QuickBooks Online: Which Accounting Software is Best for Your Business in 2025?

Choosing the right accounting software can make or break your financial workflow. Two of the most popular cloud-based solutions in the UK are Xero and QuickBooks Online—both Making Tax Digital (MTD) compliant and widely used by businesses of all sizes.

But beyond the feature lists, how do they perform in real-world scenarios? Based on my personal experience using both Xero and QuickBooks Online, this guide will give you a first-hand perspective on their strengths and weaknesses.

1. Quick Comparison: Xero vs QuickBooks Online

👉 Xero is better for accountants, while QuickBooks Online is more user-friendly for small business owners.

2. Fixed Assets Management: Xero vs QuickBooks

✅ Xero’s Fixed Assets Register: A Game Changer

One of Xero’s best features is its Fixed Assets Register module. Here's why:

• When you post an entry to a fixed asset nominal code, the transaction automatically appears as a draft in the Fixed Assets Register.
• You can easily add the asset from there, streamlining fixed asset reconciliation.
• Depreciation calculation is fully automated—with a single click, Xero posts the depreciation journal for you.

🚀 This makes Xero a powerful tool for businesses that manage multiple fixed assets.

❌ QuickBooks: No Dedicated Fixed Assets Module

Unlike Xero, QuickBooks Online lacks a built-in Fixed Assets Register. You’ll need to track assets manually or use a third-party integration.

👉 Winner for Fixed Asset Management: Xero

3. Journals & Posting Flexibility

Xero: Structured Workflow (Best for Accountants)

• Xero enforces strict accounting discipline.
• You cannot manually post journals to the following nominal codes:
  • Cash at Bank
  • Debtors & Creditors
• Instead, Xero forces you to follow its built-in workflow, ensuring financial integrity.

💡 Why this matters: If you're an accounting professional, you’ll appreciate Xero’s structured approach as it minimises errors.

QuickBooks: Flexible & Free-Flowing

• QuickBooks allows journal entries to cash at bank, debtors, and creditors.
• This makes it more flexible but also requires caution—incorrect journal entries can lead to reconciliation issues.

👉 Winner for Journal Flexibility: QuickBooks Online

4. Bank Feeds & Automation: QuickBooks vs Xero

✅ QuickBooks: Rule-Based Automation is a Standout Feature

One of the biggest advantages of QuickBooks Online is its smart transaction automation.

• QuickBooks automatically suggests rules for repeated transactions after just a few occurrences.
• You can auto-enable rules, so transactions get posted automatically when bank feeds update—zero manual intervention needed.

🎯 This is a game-changer for businesses with high transaction volumes.

❌ Xero: No Auto-Suggested Rules

• Xero does allow bank rules, but you have to create them manually.
• This makes automation slightly less efficient compared to QuickBooks.

👉 Winner for Bank Rules & Automation: QuickBooks Online

5. Pricing Comparison (2025 Updated UK Prices)

💰 Xero Pricing (2025 UK) (Source)

💰 QuickBooks Online Pricing (2025 UK) (Source)