Updated Checked by the Tax-Services.ca editorial team How we check
Nobody can honestly say that QuickBooks or Xero is better for every Canadian business, and we won’t pretend otherwise. Both handle invoices, bank feeds and GST/HST. What matters is whether the one you pick fits how your books actually work. We couldn’t verify current prices or feature lists for either product, so this page shows you how to test them yourself in an afternoon.
Which questions decide between QuickBooks or Xero?
Start with the people, not the features. Who will enter the data, and who will look at it? If your bookkeeper or accountant already works in one product, that usually settles it. They’ll be faster, and you won’t pay for someone to learn a tool you chose on a hunch.
Next, ask what you sell. A freelancer sending ten invoices a month has different needs from a shop with inventory, staff and sales in three provinces. Write down your five busiest tasks and confirm each one works in the free trial, using your own real data. A demo with sample data proves very little.
Then the tax side. You need to be sure the program can charge the right tax for each customer’s province, separate GST/HST from provincial sales tax and produce the numbers for your return. That’s the test that matters most in Canada.
What should a Canadian file handle?
The table lists the tax points we’d test in any package. The rates come from the CRA table that our GST/HST calculator uses.
| Test | What you should see |
|---|---|
| Ontario sale | One 13% HST line |
| Nova Scotia sale | One 14% HST line (down from 15% on 1 April 2025) |
| Alberta sale | 5% GST only |
| British Columbia sale | 5% GST plus 7% PST, where PST applies |
| Quebec sale | 5% GST plus 9.975% QST, tracked apart |
| Purchases | Tax paid on expenses tracked for input tax credits |
If a tool can’t do these six things for your mix of customers, drop it. Everything else is preference.
A test that takes ten minutes
Enter one invoice for $1,000 before tax to an Ontario customer. You should get $130 of HST and a $1,130 total. Try the same invoice for Quebec. Our GST and QST calculator gives $50.00 GST and $99.75 QST, so $149.75 of tax and $1,149.75 in all. Then a British Columbia sale of the same size: $50 GST, $70 PST and $1,120 total.
If the program’s figures differ, find out why before you trust it with a year of sales. Sometimes it’s a setting you missed. Sometimes it’s a real limit.
One warning. Our own BC tool treats everything at 12%, which overstates tax on goods that carry GST only, like restaurant food. Software should let you set tax per item. A single rate for the whole province isn’t enough.
What does switching cost you later?
People forget this part. Moving from one product to the other means exporting customers, suppliers, the chart of accounts and opening balances, and some history rarely comes across cleanly. The CRA expects you to keep your records, generally for six years from the end of the last tax year they relate to, so ask how you’d get a full export if you leave. Pick the option that lets you take your data with you.
Also check how bank feeds and payroll work for your bank and your province. Payroll is often a separate add-on, and if you have staff, the payroll remittance calculator shows what you’ll owe the CRA each period no matter which program you use.
Who should make the call in a small business?
Whoever lives in the books most weeks, with a nudge from the accountant. Say Alex runs a small renovation company in Moncton. Alex’s bookkeeper uses one of the two and charges less when the file is in a program she knows. The accountant can read both. In that case the choice is already made, and the useful work is making sure Alex owns the login and can export a full copy once a year. Fighting it to chase a feature rarely pays off.
How do you run a fair trial of both?
Pick one real month and enter it twice, once in each program, on the same day. Use the same bank transactions, the same five invoices, the same two bills. Time yourself, and write down every moment you got stuck or had to search for something. Then run the sales tax report in each and compare the totals with your own tally. After a month of weekends you’ll know a lot more than any comparison chart can tell you. If the trial is only two weeks, ask the vendor to extend it; a few bucks of goodwill on their side beats a wrong choice on yours.
Mistakes that cost real money
The common one is choosing on the monthly fee alone. A cheaper plan that forces you to key in every bank line by hand costs more in your own time than a dearer plan that matches transactions for you. The second is not checking who owns the file. Keep the login in your name, not your bookkeeper’s.
The third is skipping the tax setup. A wrong rate on the first invoice repeats on the hundredth. Not sure you must charge tax at all? The CRA’s guide for GST/HST registrants defines a small supplier as a business whose taxable revenue was $30,000 or less in a single quarter and over the last four quarters in a row. Go past that and you must register. Below it you can still register voluntarily.
Software can’t fix your tax bill either. Use the self-employed tax calculator or the corporate tax calculator for that, and note that the self-employed tool leaves out EI and that deductions lower its income tax but not CPP.
Sources, and how we checked them
Sales tax rates and the small supplier threshold come from the Canada Revenue Agency‘s GST/HST pages, checked in September 2026. The record-keeping period comes from the CRA’s business records guidance. We didn’t check any software vendor’s prices, plans or features, so look at each company’s own page on the day you buy. This site has no connection with the CRA or any vendor.
Frequently asked questions
Is QuickBooks or Xero better for a small Canadian business?
We couldn't confirm that either is better for everyone. Choose the one your bookkeeper already uses, then test your own invoices in the free trial.
Do both handle GST/HST?
You need to check this yourself. Enter sales for Ontario, Alberta, British Columbia and Quebec and compare the tax lines with the official rates.
Can I switch later?
Yes, but history often doesn't move cleanly. Ask how to export customers, suppliers and opening balances before you commit.
How long do I have to keep my records?
The CRA generally asks for six years from the end of the last tax year the records relate to.
Do I need accounting software at all?
Not always. A spreadsheet can work at low volume, but you still must track sales tax and keep records the CRA can read.
- Self-employed taxes in Canada: income, CPP and GST
How tax works when you are self-employed in Canada: reporting income and expenses, paying both halves of CPP, instalments and when to register for GST