Zoho Books vs. Xero: Which Is Best for Your Business?

Updated on May 30, 2023
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Zoho Books vs. Xero: Which Is Best for Your Business?

Keeping your business finances in order is of the utmost importance for any business owner, and accounting software is a key tool to help you do just that. But choosing a business accounting software can be difficult, and even if you can narrow it down to a few options, you might still be unsure whether you’re making the right decision.

In this guide, we’ll go over the details of two of the top options you’ve likely come across in your search for accounting software: Zoho Books and Xero. Both of these options will give you the basic accounting features you need, but each offers unique capabilities and different price points as well. Below, we’ll cover all of the details you need to know to choose the right software for your business.

Zoho Books vs. Xero: An Overview

When you’re trying to compare two accounting software platforms, there’s a lot of information for you to try and sift through. Hopefully, our review will help you figure out which service is a better fit for your business, as well as which features you need.

We’ll dig into all the details, but to start, here’s an at-a-glance comparison of Zoho Books vs. Xero.

Zoho Books Xero
Free, Standard, Professional, Premium
Early, Growing, Established
$0, $20, $50, $70 per month 
$11, $32, $62 per month
1, 3, 5, 10
– Custom invoices
– Recurring transactions
– Budgeting
– Expense tracking
– Invoices and quotes
– Reconcile bank transactions
– Multi-currency
– Expense tracking
Payment gateways like Stripe and PayPal, among others
More than 700 third-party integrations available 
Email, live chat, and phone support 24 hours a day five days a week
24/7 online support 
– Usability
– Tax help
– Reports
– Integrations
– Mobile app
– Unlimited users and contacts

Zoho Books: Plans and Pricing

Zoho Books is a web-based accounting software platform with four distinct plans: Free, Standard, Professional, and Enterprise. To better understand the features and cost of each, we’ll break each one down individually.

Zoho Books Free

This is the most basic plan that Zoho Books offers and it’s probably most ideal for freelancers or business owners who don’t have too many accounting needs. The Free plan, as you might expect, costs $0 per month. With this plan, you get two users (you and your accountant). 

Features of the Zoho Books Free plan include:

  • Invoices
  • Estimates
  • Expense tracking
  • Client portal
  • Financial reports
  • Bank reconciliation
  • Credit notes
  • 1099 tracking
  • Recurring invoices
  • Payment reminders
  • Chart of accounts
  • Online payments

The recurring invoice option is a huge plus for Aaron Luther, Senior Growth Manager at AlltimePower. “I can create a recurring invoice that automatically repeats every month and can even auto-charge clients who have added their credit card to the payment portal. This feature alone saves me two to three hours a month,” Luther told Fundera.

Zoho Books Standard

Everything that comes in the Free plan also comes in the Standard plan but it costs $20 per month for those added features. The Standard plan allows up to three users. It comes with all of the features in the Free plan, plus:

  • Recurring expenses
  • Predefined user roles
  • Track project expenses and invoice
  • Bulk updates
  • Transaction locking
  • Custom views
  • Custom fields
  • Reporting tags
  • Avalara and Zendesk integrations
  • Additional payment gateways
  • Sales tax tracking
  • Chat and voice customer support

Zoho Books Professional

The Professional Zoho Books plan builds on the previous two even further. It costs $50 per month with up to five users. Additional features include: 

  • Sales approval
  • Bills
  • Vendor credits
  • Sales orders
  • Purchase orders
  • Multi-currency
  • Stock tracking
  • Price lists
  • Custom roles
  • Time tracking and billing
  • Timesheet approvals
  • Project profitability
  • Workflow rules (up to 10)

Zoho Books Enterprise

The final plan option is Enterprise. This plan costs $70 per month, offers up to 10 users, and includes all of the features of the previous plans. The Enterprise plan also includes:

  • Custom domain
  • Vendor portal
  • Budgeting
  • Validation rules
  • Related lists
  • Custom functions
  • Custom schedulers
  • Workflow rules (up to 200)

Zoho Books Add-Ons

If you need to expand your functionality, there are three different add-ons you can use to supplement any of the plans above. You can add a user for an additional $2.50 per user per month.

Additionally, you can add snail mail credits, meaning you can send out physical invoices or estimates to your clients. Credits cost $2 each and you’ll need one credit per domestic invoice or estimate and two credits for international customers.

Lastly, you can pay $8 per month or $50 per year to auto-scan your invoices to automatically import your data.

Xero: Plans and Pricing

Like Zoho Books, Xero is a web-based accounting software system. Xero offers three plans: Early, Growing, and Established.

You’ll also have access to a mobile app to manage your accounting from anywhere, as well as hundreds of third-party integrations and generous user and contact permissions with their two higher-level plans.

Let’s take a closer look at what each Xero plan offers.

Xero Early

The Early plan costs $11 and includes five invoices, quotes, and bills each month.

No matter which Xero plan you choose, you can expect all of the following features:

  • Invoicing
  • Inventory
  • Quotes
  • Purchase orders
  • Bank connections
  • Bank reconciliations
  • Bills
  • Reporting
  • File storage
  • Dashboard
  • Fixed assets
  • Sales tax
  • Contacts
  • Users
  • Payments
  • Mobile app
  • Gusto payroll integration (for an extra fee)
  • Additional integrations
  • Security
  • Customer support

Xero Growing

Once you upgrade to the Growing plan with Xero, the biggest difference is that you’ll be able to send unlimited invoices and quotes for $32 per month. This plan also allows you to enter unlimited bills.

Xero Established

Finally, Xero Established costs $62 per month and builds on the unlimited allowances of the growing plan by allowing you to work with over 160 currencies.

You’ll also have access to Xero Expenses to track and manage expense claims, capture expenses and paper receipts using the Xero mobile app, track expenses with categories and labels, use multiple line items, assign expenses to projects, and more.

Additionally, Xero Established comes with project management features so you can track time, enter expenses, record deposits, and more.

Where Zoho Books Wins

Now that we’ve gone over the prices and the features of both Zoho Books and Xero, let’s explore why you might choose one platform over the other. As you can tell, the pricing is fairly similar, so for many business owners, it will come down to the nitty-gritty details.

If You Use Other Zoho Products

Zoho Books can be a great product for any business owner, but it’s especially useful for those who already use a Zoho product for another part of their business. Zoho is actually a complete cloud-based software suite that offers various tools for projects, HR management, CRM, IT management, and more. 

If you are already a Zoho user, it could make sense to choose Zoho Books for your accounting needs so you can stay within the same platform.

“We made the switch from QuickBooks to Zoho Books for several reasons, the most important being flexibility,” Kyle David, CEO of The Kyle David Group, told Fundera. “[It] syncs with Zoho Projects, so time logs and tasks can be tracked transparently.”


Zoho is incredibly flexible in that it allows you to opt for add-ons instead of completely upgrading to their next tier plan.

If you simply need an additional user or two, you don’t have to completely upgrade, you can simply pay for the extra user. This is a really nice option to have, especially for businesses that don’t feel they’d particularly need to upgrade for other reasons.


There is a dashboard view of Zoho Books where you can see all of your receivables, sales, and expenses. You can also navigate to the Reports module in the software to see more in-depth reports on your business.

You’ll be able to see the basics, like your profit and loss sheet, cash flow statement, and balance sheet. Along with those reports, you’ll also be able to see sales by item or person, customer balances, inventory summary, inventory valuation, aging details on invoices, and additional reports on your receivables, payments received, activity, sales, and inventory.

Where Xero Wins

On the other hand, there are also some distinct reasons you might choose Xero over Zoho Books, including:

Multiple Currencies

For businesses that do work internationally, being able to create invoices that are in multiple currencies might be a key feature that could sway your choice between these two options. You can even set a default currency for certain contacts so you don’t need to manually change it each time you send an invoice.


As a business owner, you probably use several different apps and platforms to keep your business running smoothly. A huge bonus of Xero is their over 700 integrations, so you can connect all your different business tools to cut down on manually importing information back and forth. 

Their app marketplace covers everything from other accounting tools you might need to inventory tracking, payroll, and HR tools as well.

Unlimited Invoices

While you have to splurge for at least their Growing plan, once you do, you’ll be able to send unlimited invoices and quotes, as well as attach unlimited bills and reconcile an unlimited amount of transactions. If your business sends a high volume of invoices, this could be a great bonus for you.

Xero App

If you’re a business owner who’s frequently on the go, the Xero accounting app might be of extra value to you. You can access all of the essential tools you would on desktop and manage invoices, bank reconciliation, contacts, and more.

You can even get reports at any time to help you not miss a beat when you’re out of the office. The app is available in the Apple App Store and on Google Play for business owners.

Zoho Books vs. Xero: Alternatives

If, after reading this Xero vs. Zoho Books comparison, you’re not sure if either platform is right for your business, consider these alternatives instead.

Wave Accounting

If you prefer a free option for your accounting software, then Wave accounting might work for you. This accounting software is completely free and comes with unlimited bank and credit card transactions, along with unlimited income and expense tracking, unlimited guest collaborators, and the option to run multiple businesses in one account. 

Wave also offers paid add-ons in the event that you do want an additional feature to complement their free service. While this software lacks advanced features, it is a great option for small businesses that only need basic accounting tools.


Another option to consider is FreshBooks. They offer three plan options: FreshBooks Lite for $15 per month, FreshBooks Plus for $25 per month, and FreshBooks Premium at $50 per month. 

All of the plans come with unlimited and customizable invoices, plus unlimited estimates and time tracking as well. The Lite plan will probably best-serve freelancers because it only gives you access to five billable clients, while the Plus plan allows for 50, and the Premium plan allows for 500.

Start FreshBooks 30-Day Free Trial

How to Choose Between Zoho Books vs. Xero

If you’ve been unsure of whether to choose Xero or Zoho Books for your business accounting, hopefully you have a better idea after reading this comparison. 

If your business requires that you send a ton of invoices, to the point where you think you need an unlimited option, then Xero’s Growing or Established plan is probably the better option for your business. Their mobile app is also another benefit to using their service, as are the third-party integrations they offer through their app marketplace. 

Zoho Books, on the other hand, might be a better fit if you need super in-depth reporting, due to the fact that they allow users to run more than 50 business-related reports. Zoho Books might also be better for those customers who already use Zoho for another part of their business. 

If you’re still unsure which option is best, it’s always a good idea to use their free trials to experiment with the software to see which works best for your business. 

Luckily, both Xero and Zoho Books offer free trials: Xero offers a 30-day free trial, no credit card required, and Zoho Books offers a 14-day free trial of their software. Take both for a test-drive and see which software wins out for your business.

Nina Godlewski
Contributer at Fundera

Nina Godlewski

Nina Godlewski is a former staff writer at Fundera.

Nina worked to help make complicated business topics more accessible for small business owners. At Fundera, she focused on complex topics ranging from payroll management to launching a business. She was previously a staff writer at Newsweek covering technology, science, breaking news, and culture. She has also worked as a reporter for Business Insider and The Boston Globe.

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