Last updated: February 11, 2026
QuickBooks Online handles expense tracking more comprehensively across all pricing tiers, especially for receipt capture and expense claims. Xero costs less upfront but locks advanced expense features behind its $90/month Established plan, making it better for businesses with simpler tracking needs.
This post is for small business owners choosing between QBO and Xero for expense management. You’ll learn what each platform does well, where they fall short, and which fits your budget and workflow.
What Our Bookkeeping Services Include
When you work with our LA-based team at Books LA, we handle the full expense tracking cycle in both QBO and Xero.
Here’s what that looks like:
- Daily bank feed review and categorization of expenses
- Receipt matching and attachment to transactions
- Vendor bill entry and approval workflow setup
- Credit card reconciliation and expense reporting
- Monthly close with detailed expense breakdowns by category
- Custom rules to automate repetitive expense coding
We’re certified advisors in both QuickBooks Online and Xero. That means we know the quirks, the shortcuts, and the gotchas in each system. We set up your chart of accounts so expenses flow into the right buckets from day one.
Our small business bookkeeping services focus on accuracy and speed. You shouldn’t spend your evenings sorting receipts when we can automate 80% of it.
How Much Do Small Business Bookkeeping Services Cost
Pricing depends on transaction volume, not just which software you pick.
Most LA businesses with 50 to 150 monthly transactions pay between $300 and $600 per month for our bookkeeping services. That includes:
- Full expense tracking and categorization
- Monthly reconciliation of all accounts
- Financial statement preparation
- Unlimited email and Slack support
- Coordination with your CPA for year-end filings
If you’re running high volume (200+ transactions), expect closer to $800-$1,200 per month. Construction and e-commerce clients often land here because of job costing and inventory layers.
Software cost is separate. Xero runs $25 to $90/month, depending on the plan. QBO starts at $38/month and goes up to $235/month for Advanced. We help you pick the right tier based on what you actually need, not what the sales page says.
Want a custom quote? Book a 20-minute call, and we’ll walk through your current setup.
How Long Does the Software Setup Takes
Setting up expense tracking in QBO or Xero takes about 2 to 4 hours if you do it right.
Here’s what we configure during onboarding:
- Chart of accounts tailored to your industry
- Bank and credit card feeds (usually instant, sometimes 24 hours)
- Vendor list import from your old system or spreadsheet
- Receipt capture rules and mobile app setup
- Expense categories that match your tax return line items
- User permissions if you have a team handling approvals
If you’re migrating from another system (or from spreadsheets), add another 3 to 5 hours for historical data cleanup. We don’t recommend importing messy data. It’s faster to start clean on January 1 and keep the old files as PDFs.
Most clients are live within one week. We schedule a 30-minute training call so you know how to snap receipts, approve bills, and pull reports without having to call us every time.
QBO vs Xero: Which Handles Small Business Bookkeeping Expenses Faster?
Both platforms handle core expense functions well. The difference is in the details.
Which Platform Offers Better Receipt Capture: QBO or Xero?
QBO wins here. All plans include mobile receipt capture. Snap a photo, the app reads the vendor and amount, and it matches to your bank feed automatically. This works on Simple Start ($38/month) and up.
Xero limits receipt capture to the Established plan ($90/month). If you’re on Early ($25/month) or Growing ($55/month), you can attach files manually but there’s no OCR magic. For businesses that process a lot of receipts, that’s a dealbreaker.
Which Platform Has Better Bank Rules and Automation: QBO or Xero?
Xero is cleaner here. You can set up bank rules that auto-categorize based on vendor name, amount, or description. It’s more flexible than QBO’s rules engine, which sometimes misfires on partial matches.
QBO has rules too, but they’re buried in the settings. Once you set them up, they work fine. Xero just makes it easier to build and edit them.
How Do QBO and Xero Handle Billable Expenses?
If you track billable expenses (common for consultants, agencies, and contractors), QBO handles this natively on all plans. You mark an expense as billable, assign it to a client, and it flows into your next invoice.
Xero requires the Growing plan or higher for billable expense tracking. It works similarly but you need to enable “Projects” to assign expenses to clients. If you’re on the cheapest Xero plan, you’re out of luck.
How Do QBO and Xero Compare for Expense Claims and Reimbursements?
QBO includes expense claims on all tiers. Employees submit receipts through the mobile app, you approve, and QBO creates a bill or check for reimbursement.
Xero’s expense claim feature is also available across all plans. It’s actually smoother than QBO in our experience. Employees can submit claims, attach receipts, and you approve in one click. The integration with Xero payroll makes it easy to reimburse through the next pay run.
Which Platform Handles Multi-Currency Expenses Better: QBO or Xero?
If you pay international vendors or travel abroad, both platforms support multi-currency. QBO includes it on Plus ($100/month) and Advanced ($235/month). Xero includes it on all plans, which is a nice touch for startups working with overseas contractors.
How Do QBO and Xero Handle Sales Tax Tracking on Expenses?
QBO handles sales tax natively. You can track which expenses include sales tax and pull reports for quarterly filings. Xero also tracks sales tax but it’s more manual. You assign tax codes to each transaction.
For California businesses, we recommend QBO if you’re dealing with complex sales tax scenarios (multiple jurisdictions, partial exemptions). Xero works fine for straightforward retail or SaaS.
We do not provide income tax advice. All sales tax and payroll tax questions should be confirmed with your CPA. We set up the tracking, they file the returns.
The Real Question: Which One Saves You Time?
If you’re doing your own bookkeeping, Xero’s interface feels faster. It’s less cluttered. Bank reconciliation is smoother. The mobile app is snappier.
If you outsource to a bookkeeper (like us), QBO’s deeper feature set means fewer workarounds. We can automate more of the tedious stuff without duct-taping third-party apps.
For LA-based businesses, we see more QBO implementations because CPAs prefer it for year-end handoff. Xero is growing fast, especially with tech startups and creative agencies.
Here’s how we think about it:
Choose QBO if:
- You need receipt capture on a budget tier
- You bill clients for expenses regularly
- Your CPA already uses QBO for tax prep
- You want all features unlocked at the $100/month tier
Choose Xero if:
- You’re cost-sensitive and don’t need advanced expense features
- You want unlimited users without paying per seat
- You prefer a cleaner, more modern interface
- You’re okay with fewer integrations
What Happens When You Work With Us
We handle both platforms daily. If you’re not sure which one fits, we’ll ask about your transaction volume, team size, and whether you need job costing or project tracking.
Then we’ll recommend the right tier and set it up in under a week. You’ll get a clean chart of accounts, automated bank feeds, and a system that actually saves you time instead of creating weekend homework.
Want to talk it through? Book a quick call, and we’ll walk you through your options.
FAQ: QBO vs Xero for Small Business Bookkeeping
Does Xero have receipt capture like QuickBooks?
Yes, but only on the Established plan ($90/month). QBO includes receipt capture on all tiers starting at $38/month. If you snap a lot of receipts, QBO is more cost-effective.
Can I set up automatic bank rules in both systems?
Yes. Both QBO and Xero support bank rules that auto-categorize transactions based on vendor name or amount. Xero’s rule builder is easier to use, but QBO’s works just as well once it’s configured.
Which platform handles multi-currency expenses better?
Xero includes multi-currency on all plans. QBO requires the Plus plan ($100/month) or higher. If you pay international vendors regularly, Xero saves you money here.
Is the mobile app better on QBO or Xero?
Xero’s mobile app is faster and cleaner for basic tasks like receipt capture and expense approval. QBO’s app has more features but feels clunkier. For on-the-go expense tracking, Xero wins on user experience.
How do QBO and Xero handle payroll tax integration?
Both integrate with their own payroll add-ons (QBO Payroll and Xero Payroll). If you use a third-party payroll provider like Gusto or ADP, QBO has more native integrations. Xero works but often requires Zapier or manual journal entries. We do not provide payroll tax advice. Confirm all payroll tax treatment with your CPA.
Can I track sales tax on expenses in both systems?
Yes. QBO tracks sales tax natively, making it easier to pull reports for quarterly filings. Xero requires manual tax code assignment on each transaction. For California businesses with complex sales tax needs, QBO is smoother. Always confirm sales tax filing requirements with your CPA.
What’s the real cost difference for a small business?
Xero’s Growing plan ($55/month) with unlimited users often costs less than QBO Essentials ($75/month) with 3 users. But if you need receipt capture or advanced expense features, you’ll pay $90/month for Xero Established versus $100/month for QBO Plus. The gap is smaller than it looks.
Do CPAs prefer QBO or Xero for year-end collaboration?
Most LA-based CPAs prefer QBO because it integrates directly with ProConnect Tax and Lacerte. Xero works fine but requires more manual export steps. If your CPA already uses one platform, stick with that to avoid conversion headaches at tax time.
Disclaimer: We do not provide income tax advice. This post covers bookkeeping and expense tracking only. All income tax, sales tax, and payroll tax questions should be reviewed with your CPA. We coordinate with your tax preparer to ensure clean records and accurate filings.
