X

Archive for Uncategorized

Xero VS QuickBooks Online

Thinking of a cloud accounting system for your business finances but not sure which one — here’s the ultimate review!

With Making Tax Digital (MTD) approaching and with HMRC insisting that small business, many of whom currently use spreadsheets, to move to cloud accounting systems we thought we’d compare the 2 most popular…

Xero vs Quickbooks Online

Developed in 2004, QuickBooks Online beat Xero to the accounting scene by two years. With advanced accounting features, beautiful invoicing, 400+ integrations, it’s easy to see why the software is so renowned.

Xero is a robust accounting solution that rivals QuickBooks in terms of capability and popularity. It’s been around since 2006 and offers fully featured mobile apps, amazing customer service, access for unlimited users, and an impressive feature selection.

Summary Table

Accounting

Winner: Tie

Both Xero and QuickBooks Online offer strong accounting. Each uses double-entry accounting and supports cash-basis and accrual accounting. In addition, each software has strong accounting features including bank reconciliation, fixed asset management, a chart of accounts, and plenty of accounting reports.

Features

Winner: Xero

QuickBooks Online and Xero offer very similar features. In some areas, like invoicing, project management, QuickBooks Online far exceeds Xero (especially since Xero has no project management or lending). In other places, like contact management, Xero provides the better feature. So how do we decide who is better?

In the end, it all comes down to accessibility. QuickBooks Online offers many great features — project management, budgeting, inventory, etc. — but there’s a catch. These features are limited to the more expensive plans. Xero doesn’t limit features by plan, making it a more robust and realistic solution for many users, which is why we gave it the win for this section.

Pricing

Winner: Tie

For some businesses, QuickBooks Online is a much more affordable option. Xero’s smallest plan only gives customers 5 invoices and 20 transactions, which renders this plan useless to many small business owners.

For medium to large businesses, Xero is the better choice. Xero offers payroll at no additional cost and supports unlimited users for every plan. QuickBooks Online doesn’t even come close in this regard.

This category is a draw. The real winner will depend entirely on your business size and needs.

Hardware & Software Requirements

Winner: Xero

As cloud-based software, QuickBooks Online works with nearly any device so long as you have internet access and are using one of the following browsers:

  • Google Chrome
  • Mozilla Firefox
  • Internet Explorer 10+
  • Safari 6.1+

Xero is also cloud-based; it’s compatible with nearly any internet-enabled device so long as you are using one of these browsers:

  • Google Chrome
  • Internet Explorer 11
  • Microsoft Edge
  • Mozilla Firefox
  • Safari 8+

Both QuickBooks Online and Xero offer mobile apps for Android and iPhone.

The only reason Xero takes the cake in this category is that you can use Xero with Linux, a capability QuickBooks Online currently doesn’t offer.

Users & Permissions

Winner: Xero

Xero offers unlimited users for all five of its pricing plans. The company also provides some of the strongest user permissions in cloud accounting. QuickBooks Online only supports one, three, or five users depending on your pricing plan (you can add up to twenty-five users total, but the cost adds up fast).

In the end, how can you beat unlimited users?

Ease Of Use

Winner: Tie

QuickBooks Online used to be the clear winner here, but the company has recently made changes to the UI, leaving the software difficult to navigate (read more about this in our complete QuickBooks Online review).

That said, Xero is only easy to use once you get to know the software. There is a steep learning curve and setup can be quite intensive. Xero offers plenty of support tools to get over this learning curve (which is more than QuickBooks Online can say). Because of QuickBooks Online’s recent downgrade and Xero’s steep learning curve, the programs are tied in this category.

If you end up choosing Xero, check out our free How To Set Up Your Xero Account guide; it will help you get started and optimize your Xero account.

Mobile Apps

Winner: QuickBooks Online

While there are a few complaints about QuickBooks Online’s mobile apps, most users find the apps incredibly helpful and easy to use. The apps receive 4.2/5 stars on iTunes and 4.3/5 stars on Google Play Store.

One of the biggest complaints about Xero is that their mobile apps are lacking key features and are ridden with bugs and crashes. It’s easy to see the winner in this section.

Customer Service & Support

Winner: Xero

Xero has the best customer service by far. In my experience, Xero representatives are well-informed and quick to respond to customers. The company also offers ample online resources, including a comprehensive help center, an in-software help button, a community forum, and lots of business and accounting guides.

While QuickBooks Online has been attempting to remedy their issues with poor customer support, the company still has a long way to go. Response times are slow and representatives are often uninformed. On the plus side, QuickBooks Online does provide a contact phone number (Xero does not — a fact quite a few users have complained about), but the phone support is not enough to beat out Xero.

Negative Reviews & Complaints

Winner: QuickBooks Online

This is one category QuickBooks Online should not want to win, and yet here they are. QuickBooks Online has received many user complaints regarding poor customer service, bugs, limited mobile apps, and even unauthorized charges.

Xero, on the other hand, has received very few customer complaints (although, this could be because it has half as many users as QuickBooks Online and hasn’t been around as long). The software is well-loved by most of its users and receives higher ratings across popular customer reviews sites.

Positive Reviews & Testimonials

Winner: Xero

While QuickBooks Online gets more positive reviews in terms of numbers, Xero receives a higher percentage of positive to negative reviews, which is why we’ve given it the victory in this section. Xero has earned 4.4/5 stars on GetApp and 4.3/5 stars on G2crowd (on this same site, QuickBooks Online only receives 3.1/5 stars).

Integrations

Winner: Xero

Xero has over 500 integrations, while QuickBooks Online comes in with over 400 integrations. Xero outnumbers QuickBooks Online here, but let’s be honest: once a company hits the couple hundred integrations mark, what more could you ask for? Both of these companies are the top accounting software companies when it comes to integrations, so you can’t go wrong with either choice.

Security

Winner: Xero

Ordinarily, this section results in a tie, but Xero has set itself apart in terms of security.

Both QuickBooks Online and Xero use data encryption, redundancy, and physical security measures at their prospective data centers. However, Xero boasts an unheard-of 99.97% uptime and has one of the strongest security reputations in the cloud accounting world. Of course, QuickBooks has one of the other strongest reputations in the accounting world, so, again, you really can’t go wrong with either option in this regard.

And The Overall Winner Is…

QuickBooks Online put up a very good fight, but in the end, Xero edges out the competition in a few key areas. Xero offers accessible features, better customer service, and more positive reviews. In this comparison, the people truly have spoken, and Xero is the winner.

Xero the Best Accounting Software For Larger Businesses. If you are looking for strong accounting capabilities, Xero won’t let you down. It’s important to note that there is a steep learning curve with this software, so if you’re not up for the challenge, QuickBooks Online might be a better choice.

Although QuickBooks Online didn’t win this one, it is particularly ideal for small businesses. If your company relies on invoicing, QuickBooks Online’s invoicing capabilities are far beyond anything Xero can offer. And if you need a project management feature, QuickBooks Online is also the way to go. Who knows?

If you want a full guide in how to set Xero up- go to our of our new chatbot 🤖, Claire

Big data accounting – the predictive accountant

I hear many owners say "My business too small for big data”. Ironically, the size of the data is the least important aspect for business improving decision-making.

Business owners, irrespective of the size of their organisation, are making decisions on big data. Businesses of all sizes generate a significant amount of non-financial unstructured information For example, GPS position data from mobile phones, temperatures from sensors, free-form text in questionnaires, website customer interactions, social media conversations and video from security cameras.

The hallmark of big data

The hallmark signature of this big data in this context is that it represents the non-financial information (NFI) occurring in between transactions. Since the Renaissance, humans have been diligently capturing and recording financial transactions using double entry bookkeeping and accounting systems, The NFI has not been collected or utilised.

The representation of the current business is transactions (sales and operational indicators), but the future situation depends on human empathy and relationships, represented by the likes of user-generated content regarding the use of brand products (eg via Twitter), ratings (eg via TrustPilot), reviews (eg TripAdvisor), one to one conversions, distress signals from customers (via Customer Service Video, Voice or Text analysis) and geolocation of customer activities (eg via Mobile Phone GPS).

..and that's before you consider the Internet of Things and all the physical sensor information available

But how does this impact the financial state of affairs? Consider a hotelier. She pays attention to rankings changes on TripAdvisor, as this impacts her future revenue. She could leverage that big data to anticipate a change in demand for rooms and take action. Rather than waiting for financial statements from her accountant before taking action on the revenue discrepancy.

The democratisation of data

Increasingly, this phenomenon of using data held outside of businesses to provide predictive capability in advance of actual events or publication of financials represent the democratisation of data.

The democratisation allows Cloud Accounting to gain access to data to help you make data-driven business improvement decisions. By free we mean very little or literally no investment for the data.

Big data for competitive advantage

Chartered accountants can leverage big data to gain competitive advantage over other professionals.  At Cloud Accounting NI, we integrate big data into the financial performance measures we regularly provide to businesses.

For example, a website of any business is a natural starting point. A decrease in online customer visits compared to a previous period is a potential indicator of a future drop in sales. Google Analytics reporting helps provide visibility into sales well before a sales transaction entry is recorded. Or indeed lost to a competitor.

We have seen NFI (non financial information) and financial accounting data work together to better benefit businesses.As accountants we provide a more holistic service for businesses to provide predictive capability.

Please get in touch with us if you feel you can benefit from predicting the future.

What is Pension Auto Enrolment?

The law has changed and your employer must offer you a workplace pension to save for your future, here is how it will work.

What is auto enrolment?

It is when you are put into a workplace pension automatically.

Automatic enrolment was introduced in October 2012 and requires employers to provide a workplace pension for their eligible employees.

The auto enrolment process has already started for larger companies first, followed by smaller companies with the aim of enrolling all eligible employees by April, 2019.

How does it work?

If you are an 'eligible employee' you will automatically start paying into a workplace pension set-up by your employer, who will also make a contribution on your behalf.

The government will also contribute a percentage towards your pension as a tax relief.

The date your employer starts auto enrolment is called the staging date.

You can use your PAYE (Pay As You Earn) reference, to find out when your employers staging date is by visiting The Pensions Regulator website.Where can you find your PAYE reference?

Do you qualify?

Only if you are an 'eligible employee'. This means you are:

  • At least 22 years old
  • Working in the UK
  • Earning a minimum of £10,000 each year
  • Not paying into a workplace pension already
  • Not yet at the state pension age (find out your pension age)

Within 6 weeks of your staging date you will be given a document from your employer, which will include:

  1. Your personal details, e.g. name, address
  2. Which pension you have been enrolled into
  3. The amount you will pay
  4. The amount your employer will pay
  5. Information on opting-out of the pension
  6. A declaration of compliance

The declaration of compliance lets you know your employer has correctly followed their employer duties in setting up your pension.

If you do not get one, make sure you ask your employer or contact The Pensions Regulator.

What if you do not qualify?

There are two main reasons why you may not qualify for auto enrolment:

  1. You do not meet the eligibility criteria
  2. You already pay into a workplace pension which meets the government's standards

You can still ask your employer to let you:

  • Opt-into the auto enrolment pension scheme. Even if you are not eligible for automatic enrolment, you may still be able to join. Your employer will also have to make a contribution if you are added.
  • Pay into a separate pension scheme if you cannot opt in. Your employer does not need to make any contributions if you do this.

Do you have to auto enrol?

No, while you will be automatically enrolled if you are eligible, you can choose to cancel your enrolment after the staging date. This is known as 'opting out'.

To opt out, you must complete an 'opt out form' and give it back to your employer.

The earlier you decide to opt out, the better the chance of getting the money you paid in back, for example:

  • Opt out within first month: You will get all of your contributions back in full.
  • Opt out after first month: It is unlikely you will get your money back until you reach your retirement age, however this depends on the pension scheme your employer enrols you onto.

Your employer must put you back into the pension every three years. This is in case your financial situation changes and you would benefit from the pension scheme and government contributions at a later date. You will still have the option to opt out every three years.

How much do you need to pay in?

The amount you and your employer have to pay into your pension will gradually increase over the next few years.

The maximum combined contribution will be 8% from April 2019, here is how your payments will be calculated, based on your qualifying earnings:

Who paysUntil March 2018From April 2018From April 2019
You0.8%2.4%4%
Employer1%2%3%
Government tax relief0.2%0.6%1%
Overall contribution2%5%8%

What are your qualifying earnings?

This is worked out by taking your yearly income and deducting the qualifying threshold for pensions, which is £5,876 in the 2017/18 tax year.

For example, if your employer pays you £25,000 a year, the figure of £5,876 will be deducted. This means you have £19,124 of qualifying earnings.

The following table shows how much will be contributed to towards your pension:

Who paysUntil March 2018From April 2018From April 2019
You£153.41£460.22£767.04
Employer£191.76£383.52£575.28
Government tax relief£38.35£115.06£191.76
Overall contribution£383.52£958.80£1534.08

Figures in table represent annual deductions based on earnings remaining the same for each year.

What type of pension will you get?

Your employer will choose a pension scheme, but they will give you all the details about it. There are two popular types of pension scheme:

Defined benefit pension schemes - This type of pension is based on your earnings over the entire length of your employment. 

Two examples of this type of pension are the final salary schemes and career average revalued earnings (CARE) schemes.

Defined contribution pension schemes - Also known as money purchase schemes, this type of pension will invest your contributions, which you can usually review throughout the term of the scheme. 

Your retirement pay-out will be worked out based on how much you and your employer have contributed and how the scheme performs throughout the pension schemes term.Visit the Gov.uk website for more information on pension schemes

Does your employer have to auto enrol you?

Yes, if you are an eligible employee, your employer is required by law to enrol you onto their workplace pension, unless you are:

  • A member of the armed forces
  • The only person in a company (director)

If you are not on the exception list above and your employer refuses to enrol you into a pension, contact The Pensions Regulator for help

CLOUD ACCOUNTING LLP

#NumbersinBlackandWhite

ONLINE CHARTERED ACCOUNTANTS

BELFAST ADDRESS
Catalyst Inc,
Titanic Quarter
Belfast
BT3 9DT
+44 2895 219365


LONDON ADDRESS
New Broad Street House
35 New Broad Street
London EC2M 1NH
+44 207 971 1002

Name: Cloud Accounting LLP
Email address: richard@cloudaccountingni.com
Phone: +447868663538