Hey there, fellow business owners! I’m Harshal Katre, co-founder of ProfitBooks. After spending over a decade in the SaaS industry, I’ve learned that choosing the right accounting software can make or break your financial management experience.
Today, I’m diving deep into Xero vs Reckon—two platforms that dominate the Australian accounting software landscape.
I’ve had countless conversations with Australian business owners over the years, and the same question keeps popping up: “Which accounting software should I choose?”
With Xero’s 1.12 million users and Reckon’s 1 million users in Australia, it’s a heated battle. But is popularity the only metric that matters? Not by a long shot.
Why Use Accounting Software?
Let me share something I learned the hard way: as your business grows, managing finances with spreadsheets becomes a nightmare. I remember those early days of ProfitBooks when we tracked everything in Excel.
For many sole traders and small business owners, accounting might initially seem straightforward.
But trust me, once your business takes off, things get complex fast:
- Invoice management becomes time-consuming
- Expense tracking gets scattered
- Inventory management turns chaotic
- Tax compliance becomes stressful
That’s why good accounting software is essential. It’s not just about recording transactions; it’s about gaining clarity on your business’s financial health without needing an accounting degree.
Xero: Sleek Interface with Premium Pricing
Xero dashboard
Xero burst onto the scene 2006 from New Zealand and quickly gained traction in Australia. Having used it myself for a client project, I can see why it’s captured substantial market share.
What I Like About Xero
- Beautiful, Intuitive Interface: This is arguably Xero’s strongest selling point. The clean, modern dashboard makes financial management almost pleasant—something I’ve always strived to emulate when designing ProfitBooks’ interface.
- Cloud-Based Accessibility: In today’s remote work environment, being able to access your accounts from anywhere is crucial. Xero nails this aspect, allowing seamless collaboration between team members.
- Bank Reconciliation: Xero automatically categorizes transactions, making bank reconciliation relatively painless. This feature alone saves hours of manual work each month.
- Multi-Currency Support: For businesses operating internationally, Xero handles multiple currencies effectively with updated exchange rates—a feature many Australian businesses need when dealing with overseas clients.
- Extensive Integrations: With a robust API and app marketplace, Xero connects with numerous third-party tools. According to 6Sense market data, this integration ecosystem gives Xero a significant competitive advantage.
The Downsides of Xero
- Expensive Pricing Structure: Here’s where things get tricky. Xero’s entry-level “Ignite” plan starts at $35/month, but it’s severely limited. Need more than 20 invoices? That’ll be $70/month. Adding just one employee? Again, $70/month minimum. For 4 employees, you’re looking at $90/month according to Reckon’s comparison.
- Invoice Limitations: The basic plan restricts you to just 20 invoices and 5 bills monthly—a constraint I find particularly frustrating. Imagine telling a growing business they can only bill 20 clients per month!
- Add-On Costs Add Up: Those fantastic integrations? Many come with additional costs. I’ve seen businesses shocked by their total Xero-related expenses after adding necessary extensions.
- Support Limitations: Multiple user forums report challenges with Xero’s support. One Reddit user mentioned, “Support is primarily technical in nature,” rather than providing comprehensive assistance for business questions.
Who Should Use Xero?
Based on my experience, Xero works best for:
- Businesses are willing to pay premium prices for a superior user experience
- Companies requiring extensive third-party integrations
- Organizations with dedicated accounting staff who can maximize their features
Reckon: The Cost-Effective Australian Veteran
As an accounting software veteran launched in 1987, Reckon has deep roots in the Australian market. Many small businesses use Reckon specifically because it’s built with Australian tax compliance in mind.
Reckon One Dashboard
What Impresses Me About Reckon
- Affordability: Reckon’s pricing is substantially more budget-friendly, starting at just $22/month for their entry-level plan. This is a 37% savings compared to Xero. According to their comparison page, their payroll option for 4 employees costs just $28/month versus Xero’s $90/month, representing an 80% cost reduction.
- Unlimited Invoicing: Unlike Xero’s restrictive limits, Reckon offers unlimited invoices and bills across all plans. This is something many of my ProfitBooks clients cite as essential for growing businesses.
- Free Phone Support: Reckon emphasizes customer service, with most calls answered within 2 minutes. In my conversations with Australian business owners, this is a significant advantage.
- Strong Reporting: One expert source states, “Where it [Reckon] shines is in its reporting. If management reporting is the key thing you are looking for in your finance software, then Reckon is one of the best.” This aligns with what I’ve heard from businesses needing detailed financial insights.
- Payroll Management: Reckon’s payroll is specifically designed for Australian tax and labor regulations, making compliance straightforward for business owners.
Reckon’s Limitations
- Less Intuitive Interface: While functional, Reckon’s interface feels less modern than Xero’s. Several users report a steeper learning curve, especially when transitioning from other platforms.
- Limited Automation: Some processes that are automated in other platforms require manual intervention in Reckon, potentially increasing administrative time.
- Integration Restrictions: While Reckon does offer integrations, its ecosystem is more limited compared to Xero’s extensive marketplace of connected apps.
- Market Position Concerns: With just 0.05% market share compared to Xero’s 5.68% according to 6Sense data, some businesses worry about Reckon’s long-term development resources.
Who Benefits Most From Reckon?
In my assessment, Reckon is ideal for:
- Cost-conscious small and medium businesses
- Companies with multiple employees needing affordable payroll
- Australian businesses are prioritizing local tax compliance
- Organizations valuing direct customer support
Reckon Australia Pricing Plans
The Hidden Truth: What Most Comparisons Miss
Having analyzed hundreds of accounting platforms for my own business and clients, I’ve noticed several critical gaps in typical Xero vs Reckon comparisons:
Industry-Specific Suitability
Neither platform excels equally across all industries. Through my discussions with Australian business owners, I’ve found:
- Xero tends to work better for service-based businesses and e-commerce
- Reckon has advantages for retail and businesses with inventory management needs
- Neither offers specialized solutions for industries like construction or healthcare without expensive add-ons
Total Cost of Ownership
The sticker price rarely tells the full story. When calculating actual costs over 3 years of business growth, I typically see:
- Xero’s costs are escalating quickly as businesses add employees or exceed transaction limits
- Reckon on maintaining more predictable pricing, but potentially requiring third-party solutions that add expenses
- Training costs are higher for Reckon due to its less intuitive interface
Data Security and Compliance
As someone who’s had to navigate the complex world of financial data protection, I’m surprised how rarely this gets mentioned:
- Both platforms offer solid security fundamentals
- Neither provides detailed information about their security infrastructure
- Australian Tax Office (ATO) compliance is crucial, but rarely evaluated in comparisons
Why I Created ProfitBooks: A Better Alternative
After seeing these gaps in the market and hearing frustrations from countless business owners, I co-founded ProfitBooks to create something that addressed these pain points directly.
Our philosophy was simple: accounting software should be affordable, comprehensive, and designed for business owners, not accountants.
How ProfitBooks Outperforms Both Options
- Genuine Affordability: We offer a legitimate free plan (“Startup”) with no time limitations, and our paid plans start at just $20/month with no arbitrary transaction limits. This approach has made proper accounting accessible to over 100,000 businesses worldwide.
- Designed for Non-Accountants: I intentionally built ProfitBooks with a simple, intuitive interface after watching business owners struggle with complex accounting terminology. As one reviewer noted, “even my 70-year-old dad can create bills of his own” with our software.
- Unlimited Users Included: Unlike competitors that charge per user, all ProfitBooks plans include 10 free users. This eliminates the cost penalty for collaboration.
- Comprehensive Feature Set: Despite our affordable pricing, we include features that others charge premiums for:
– Professional invoicing with customization
– Complete inventory tracking and valuation
– Expense management with receipt attachment
– Over 40 built-in financial reports
– Multi-currency support for international businesses
Profitbooks – 45+ Filterable Reports & Statements
- Exceptional Support: Our customers consistently highlight our responsive support team. One reviewer specifically mentioned that “all requests or queries are taken as critical almost every time.”
Feature Comparison: Xero vs Reckon vs ProfitBooks
| Feature | Xero | Reckon | ProfitBooks |
| Starting Price | $35/month | $22/month | FREE (Startup plan) |
| Invoice Limit (Basic Plan) | 20 per month | Unlimited | Unlimited |
| Users Included | Limited by plan | Limited by plan | 10 free users on all plans |
| Payroll for 4 Employees | $90/month | $28/month | Included in the $20/month plan |
| Phone Support | Limited | Yes (within 2 min) | Yes (priority support) |
| Learning Curve | Moderate | Steep | Minimal (designed for non-accountants) |
| Mobile Access | Yes | Yes | Yes (optimized interface) |
| Free Trial/Plan | 30-day trial | Limited trial | Forever free Startup plan |
Frequently Asked Questions
Based on my conversations with Australian business owners, here are the questions I’m most commonly asked:
- Which accounting software offers the best value for small businesses?
For pure value, ProfitBooks delivers the most comprehensive feature set at the lowest price point. Reckon offers good value with unlimited invoicing at a moderate price, while Xero’s premium pricing makes it less cost-effective for budget-conscious businesses.
- How much can I save by choosing alternatives to Xero?
Based on our analysis, businesses can save approximately:
- 37% by choosing Reckon over Xero for basic accounting
- 80% on payroll functionality with Reckon compared to Xero
- Up to 100% with ProfitBooks’ free Startup plan or 43% with our full-featured plan compared to Xero’s equivalent
- Which platform has the best reporting capabilities?
Reckon is frequently cited for its strong reporting features, particularly for management reporting. As one expert states, Reckon “shines in its reporting” capabilities. ProfitBooks offers over 40 customizable reports designed specifically for business decision-making, while Xero provides solid reporting but may require add-ons for advanced analytics.
- Is it easy to migrate data between these platforms?
Migration options exist for all platforms:
- Reckon offers free data migration from Xero when signing up for Plus or Premium plans
- ProfitBooks provides comprehensive migration assistance for new customers
- Third-party services like MMC Convert facilitate transitions between platforms, with positive reviews for handling complex migrations.
- Which software has the best customer support?
Based on user reviews and my testing:
- ProfitBooks integrates support directly into the application with immediate chat assistance
- Reckon offers free phone support, with most calls answered within 2 minutes
- Xero’s support is primarily online-based, which some users find less responsive
- Which platform works best for Australian tax compliance?
All three platforms support Australian tax requirements, but with different approaches:
- Reckon was built specifically for the Australian market with localized tax features
- Xero has strong compliance capabilities, but at a higher price point
- ProfitBooks offers GST compliance with automated tax calculations and reporting
- How does the user experience compare between these platforms?
- Xero is known for its beautiful, intuitive interface, but it can slow down with larger data sets.
- Reckon has a functional but less modern interface with a steeper learning curve.e
- ProfitBooks was designed specifically for non-accountants with simplicity as the primary goal
Comprehensive Feature Comparison: Xero vs Reckon vs ProfitBooks
| Feature | Xero | Reckon | ProfitBooks |
| Pricing | |||
| Starting Price | $35/month | $22/month | FREE (Startup plan) |
| Mid-tier Plan | $70/month | $16.50/month | $20/month |
| Premium Plan | $90-115/month | $31.50/month | $20/month (all features) |
| Payroll for 4 Employees | $90/month | $28/month | Included in the $20/month plan |
| Core Features | |||
| Invoice Limit (Basic Plan) | 20 per month | Unlimited | Unlimited |
| Bill Limit (Basic Plan) | 5 per month | Unlimited | Unlimited |
| Bank Reconciliation | Automated | Manual with some automation | Automated |
| Users Included | Limited by plan | Limited by plan | 10 free users on all plans |
| Multi-Currency Support | Yes (higher plans) | Limited | Yes (all plans) |
| Reporting & Analytics | |||
| Custom Reports | Limited in the basic plan | Strong reporting features | 40+ customizable reports |
| Management Dashboards | Yes (higher plans) | Yes | Yes (all plans) |
| Cash Flow Forecasting | Short-term only | Basic | Comprehensive |
| Support & Usability | |||
| Interface | Modern, intuitive | Functional, steeper learning curve | Simple, designed for non-accountants |
| Customer Support | Email only, limited hours | Phone support (2-min response) | In-app chat + email support |
| Mobile App | Yes | Yes | Yes (optimized interface) |
| Learning Resources | Extensive | Good | Comprehensive + free training |
| Additional Features | |||
| Inventory Management | Add-on required | Yes | Yes (all plans) |
| Project Tracking | Add-on required | Limited | Yes |
| Third-party Integrations | Extensive | Limited | Growing marketplace |
| Australian Tax Compliance | Yes | Yes (specialized) | Yes |
| Free Trial/Plan | 30-day trial | Limited trial | Forever free Startup plan |
| Data Migration | Paid service | Free from Xero | Free comprehensive assistance |
My Honest Recommendation
After a decade in the accounting software space and countless conversations with Australian business owners, here’s my straightforward advice:
If you’re an established business with complex needs and budget isn’t a concern, Xero offers a polished experience with extensive integrations.
If you’re a growing business needing solid Australian-focused accounting at midrange pricing, Reckon provides reliable functionality with better support.
If you want comprehensive features without the premium price tag, ProfitBooks delivers the best overall value with no hidden costs or arbitrary limits.
I created ProfitBooks because I believe you shouldn’t need an accounting degree to manage your finances, and you shouldn’t have to pay premium prices for essential business tools.
If you’re looking for a simpler, more affordable way to handle your accounting, sign up for our free Startup plan and experience the difference yourself.
Your business deserves accounting software that works for you, not the other way around.
Have you tried any of these platforms? What’s been your experience? I’d love to hear your thoughts in the comments below!
Key Takeaways
- Pricing Winner: ProfitBooks – Offers the most competitive pricing structure with a genuine free plan and all features accessible at $20/month.
- Feature Accessibility Winner: ProfitBooks – Provides unlimited invoicing, 10 users, and comprehensive features without tiered restrictions.
- User Experience Winner: Xero – Offers the most modern and intuitive interface, though at a significant price premium.
- Reporting Winner: Reckon – Excels in management reporting capabilities, particularly valued by established businesses.
- Support Winner: ProfitBooks & Reckon (tie) – Both prioritize responsive customer service, with Reckon offering quick phone support and ProfitBooks providing integrated assistance.
- Australian Compliance Winner: Reckon – Built specifically for the Australian market with deep compliance knowledge.
- Scalability Winner: Xero – Despite high costs, it provides the most robust platform for rapidly growing businesses with complex needs.
- Best Value Overall: ProfitBooks – Delivers the optimal balance of features, usability, and affordability for most small and medium businesses.
Also Read:
What is Cloud Accounting, and How Will it Help Your Business
Tips To Migrate From QuickBooks To Another Accounting Software
How To Select A Perfect Accounting Software- 8 Tips
Free accounting software for small businesses
Top 8 Alternatives to Zoho Books Accounting Software
