Start-up Size:
Small, 2 person business (Software Design & Development)
What we looked at:
Sage One
The Price:
Going with the most basic level pricing plan, all 3 come in between 12 to 14 Euro per month, with ‘Sage One Accounts’ being the cheapest and ‘Xero Small’ marginally more expensive than ‘Quickbooks Simple Start’ (had to do a little currency conversion for Xero as they do not have an Irish/Euro price on their site). All 3 offer a generous, no commitment, free trail period.
The Package:
In terms of what you get for that price, Quickbooks has laid out, in much more transparent terms than the other two, what you get and what you’re not getting. Xero has the most basic package in that it only allows 5 invoices per month, while the other two allow an unlimited amount. I’m aware that this could be a major factor when choosing your package, 5 really isn’t many, and won’t be enough for the vast majority of businesses out there. These people will be forced to go with a more expensive package if you want to stick with Xero.
However, we can only speak for our company, where we don’t expect to go above 5 invoices per month, at least for the first 6-9 months. We would like to see Xero maybe double that number to 10 per month, just to give us a bit of breathing room, I don’t think it would be too much to ask considering Quickbooks and Sage One offer unlimited invoices for the same price. As mentioned, 5 per month for now should suffice, but we would like to think we could grow our business to a level that would make this number insufficient, we may then need to reconsider which software to go with, in terms of value for money.
Really only 5 invoices per month!?
Yes, Xero say its an ideal package for freelancers or small property investors. Most freelancers, and I can only speak for our fellow web designer and developers, would likely only have around 5 jobs per month on average, if they are lucky, so they are probably about right. I’m sure there are plenty of super successful freelancers doing more than this, and if they are then they should be easily able to afford to paid for the slightly more expensive package! I guess this is how Xero see it anyway. If you are receiving more than 5 invoices per month you should be well able to buy our more expensive package. The problem as I see it is there are other very widely used software packages such as Quickbooks and Sage One offering unlimited transactions for the same price, so it seems inevitable to me that Xero are going to lose some customers if they do not up that limit a small bit. Saying all that, while we are are limited company, our current workload is comparable to a freelance web developer, so 5 invoices per month should suffice, if only for the short term.
(Edit: I’ve since been contacted by the Xero support team with the following:
If you have a big month, and exceed the transaction limits for the small plan you can upgrade to the medium plan, reconcile the transactions / create the additional invoices, then downgrade again. Please note that you will need to wait for 30 days until you can downgrade plans again.)
The Software:
All three solutions are cloud-based solutions that run in your browser. Out of the three, Quickbooks probably has the cleanest and most modern-looking user interface with flat UI design and colours and full use of the available screen space. Sage One for me has the cheapest looking design of the three and isn’t very pleasing on the eye. In terms of usability, Quickbooks has a lot going on, and for me was the least intuitive of the three. I would often find myself searching the screen for the cancel or save buttons for example, sometimes fields that were mandatory came across as being optional. It all just gave the impression that they spent too much much time making it look nice and not enough time actually making it useable.
On the other hand Xero was the most easy to use of the three, especially coming from a small micro business perspective. We are primarily worried about sales, purchases and expenses. In particular we found the way Xero handles expenses to be the best of the three. Maybe its because Xero were themselves a small company not so long along that they seem to get, much more than the other two, what’s important to a small start-up business. Of the three Xero seems to suit new start ups best, the other two seemed more interested in helping existing businesses looking to move existing offline accounts to the cloud, as opposed to a new business starting out on day one using the cloud. Quickbooks in particular seemed very keen to help you transition your existing accounts and balances, they didn’t have an “Actually we are a new company, stop reminding us about last year accounts” option!
Recording Expenses:
Taking out expenses is a key part of any small business where money for wages is hard to come by in the first few months. For us, running a small business, we had to learn to see ourselves as both the business and also as employees of the business. This can be a tricky thing to get your head around at first, especially when you are just used to being an employee for many years. Sometimes when we have expenses, they are expenses that we the employee’s have. In that we spend our personal cash then expense it back to the company. There are other times when we the business spend money on something using the company’s money that we expense. Of the three software packages, Xero is the only one that seems to get this concept. Both Sage One and Quickbooks have an expenses system that seems to only take into account the expenses of the company as opposed to the expenses of the employee. Both these software packages have been around a long time, and I’m certain that they have some way to handle both these types of transactions, however it really isn’t clear how. I’ve spent several hours using both trying to create both types of expenses and I’m still none the wiser. I don’t want to have to contact support or take an online class to figure out how to do this, it should be a simple process.
Thankfully as I’ve said, with Xero, it is. I definitely had a “thank God someone gets it” moment when using Xero for the first time. I had started to think from using the other two that it just wasn’t going to be possible to enter this data in. WIth Xero, I was easily able to enter details of some of my start up expenses for example, i.e. expenses that I incurred before the company was set up or had made any money. Quickbooks and Sage just didn’t seem to get this concept, but I mean it must be a pretty common one, right?
What we went with:
In the end, based on the easy to use and intuitive user interface, the straightforward yet comprehensive expenses system and the way in which it seemed to fit our company best, both in terms of size and in terms of us being a new start-up, we went with XERO. Both Sage One and Quickbooks Simple Start are great products, but they just seem to be aimed at companies a little older and a little bigger than ours. If that is you then certainly look at these other products or perhaps at Xero Medium or Large. If you are however, like us, a small company or sole trader starting out, then we would highly recommend at least taking a free trail of Xero to see if it suits you also.
– DK