Best Accounting Software for 2025?

Here’s my comparison of Xero vs Sage and determine which software suits your business’ accounting and financial reporting needs.

Xero and Sage are both cloud-based accounting software that help small businesses and accountants manage invoicing, bank reconciliation, financial reporting, and day-to-day bookkeeping. Xero is known for its modern, intuitive interface and wide range of third-party app integrations, while Sage is favored for its strong compliance features, built-in support for VAT and payroll, and familiarity among traditional accountants.

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Xero vs Sage: Comparison table

Xero vs Sage: Pricing

Sage Accounting is the more affordable pick in this comparison but it’s limited upto five users only. Xero is a much pricier option but it offers more advanced features and unlimited seats.

Xero

• Xero Early: $20 per month for unlimited users; five bills and 20 invoices only
• Xero Growing: $47 per month for unlimited users; unlimited bills and invoices
• Xero Established: $80 per month for unlimited users; unlimited bills and invoices

Sage

• Accounting Start: $12 per month for one user
• Accounting Standard: $23 to $32 per month for two to five users

Xero vs Sage: Feature comparison

In my expert opinion, Xero wins when it comes to features, but that doesn’t mean Sage is an inferior pick. Both have their strengths and weaknesses, and my Xero vs Sage comparison really comes down to what your business needs most. I see Sage Accounting as a better fit for users with basic to intermediate needs, while Xero is ideal for those with basic to advanced accounting workflows. If you’re unsure whether to go with Sage or Xero, consider how much flexibility and automation your operations require.

Accounts receivable

Winner: Xero

Xero gives you more control over how you manage receivables. You can automate reminders, set up recurring invoices, and even add late fees—features that help you stay ahead without chasing payments manually. The “Pay Now” option through Stripe or GoCardless makes it easier for clients to pay on time. I’ve found this combo of automation and payment integration especially helpful for improving cash flow, and it’s a key reason I lean toward Xero in my Xero vs Sage comparison.

Sage Accounting keeps things much simpler, and that’s its biggest strength. You can create and send invoices quickly using saved customer and product details, and the customization options make your invoices look polished without extra effort. But you won’t get automatic reminders or deep integration with payment platforms, which can slow things down if you’re managing a growing list of receivables.

For businesses deciding between Sage vs Xero, Sage is a better fit if you just need the basics done well without too many moving parts.

Accounts payable

Winner: Xero

Xero handles accounts payable with more automation and flexibility. You can upload bills or forward them by email, and Xero will auto-fill the details using OCR. I like that you can schedule payments, set up approval workflows, and batch-pay multiple bills at once — it saves time and cuts down on errors. If you’re managing a high volume of payables, these features make a real difference in the overall Xero vs Sage comparison.

Sage Accounting takes a more basic approach, with fewer automation tools on the accounts payable side. Most of its focus is on receivables, but it does let you record and track bills manually. The Debtors Manager module is helpful for chasing payments, but doesn’t do much for managing what you owe. For businesses weighing Sage vs Xero, it’s clear Sage works best when simplicity is the top priority.

Project accounting

Winner: Xero

Xero really gets what project accounting needs to look like. You can build estimates, track labor and materials, and see how each project is performing in real time. The ability to compare actuals to estimates is especially useful when you’re managing budgets closely. If project profitability matters to you, Xero gives you the tools to stay in control.

Sage Accounting takes a broader, less detailed approach. Its Project Tracker uses Analysis Codes to track performance across divisions, locations, or jobs, which is helpful for high-level comparisons. But it doesn’t offer the same granularity as Xero — no labor tracking, no real-time costing. For businesses comparing Sage vs Xero, Sage works if you just need to segment reports, but not if you’re tracking project-level profit.

Inventory management

Winner: Sage

Sage Accounting’s inventory tools are built for efficiency and accuracy. With Advanced Inventory, quantities and values update automatically after every sale — no manual journal entries needed. You get a real-time view of stock levels, which helps reduce errors and save time. Everything you need for stock management is centralized, which makes it easier to stay organized as your business grows.

Xero covers the basics well but falls short on more advanced inventory features. You can track quantities, costs, and COGS using a perpetual system, and it integrates smoothly with payables and receivables. But you can’t view inventory on purchase orders, and it lacks flexibility in inventory valuation methods.

If you’re weighing Xero vs Sage for inventory management, Xero is solid for simple needs — Sage is the better fit when inventory is core to your workflow.

Xero pros and cons

Pros of Xero

• Has unlimited users
• Offers automated invoice reminders and recurring billing
• Has fixed asset tracking features
• Includes project tracking and job costing in higher plans
• Provides strong mobile app functionality for invoicing and expenses

Cons of Xero

• Lacks telephone support — email and chat only
• No inventory tracking on purchase orders
• Limited payroll availability (only in select regions)
• Doesn’t support multiple inventory valuation methods (e.g., FIFO/LIFO options)
• Advanced features locked behind higher-tier plans

Sage pros and cons

Pros of Sage

• Has built-in cash flow forecasting
• Offers customizable invoice templates
• Includes bank reconciliation and transaction matching
• Supports multi-currency transactions (in higher-tier plan)
• Provides simple, intuitive dashboard for small businesses

Cons of Sage

• Limits to one user on the entry-level plan
• Fewer third-party integrations compared to Xero
• Lacks automated invoice reminders
• No dedicated project tracking tools (only basic segmentation with Analysis Codes)
• Limited reporting customization without upgrading

Should your organization use Xero or Sage?

Choose Xero if

• You need more than five users: Xero allows unlimited users on all plans, with customizable user roles.
• You want to track fixed assets: Xero includes built-in fixed asset management, so you can track depreciation and asset value over time.
• You manage multiple projects: Xero’s project tracking features help you monitor job costs, profitability, and time spent across projects.

Choose Sage if

• You’re a solo user or small team: The entry-level plan is affordable and built for one user, with straightforward tools for daily tasks.
• You want simple invoicing: Sage makes it easy to send professional invoices using saved customer and product details.
• You need basic reporting by project or department: With Analysis Codes, Sage lets you track performance across locations, jobs, or categories.

My methodology

When I compare accounting software, I focus on features that actually impact day-to-day operations, especially for small businesses and accountants who need practical, reliable tools.

• Pricing: Affordable yet functional. I look at how pricing scales with features and whether the number of users offers flexibility as your business grows.
• Invoicing and billing: A/R and A/P are central to managing cash flow. I prioritize tools that streamline billing, automate reminders, and simplify payments on both sides.
• Project accounting: Tracking income and expenses by project is critical for service-based businesses. I assess whether the software offers clear, useful project-level reporting and controls.
• Inventory: It’s not just about stock levels — it’s also about knowing inventory costs and syncing them with your financials. I look for real-time tracking, automated updates, and integration with sales and purchasing.
• Ease of use: Software should be intuitive, not something you need a manual to figure out. I look at how easy it is to navigate, get set up, and complete core tasks without unnecessary friction.
• Expert opinion: My reviews focus on helping you find software that supports your workflow, not one that gets in the way of it. Whether you’re just starting out or scaling fast, the right accounting system should grow with you. I aim to highlight the real trade-offs so you can make a smarter, faster decision.

Frequently asked questions (FAQs)

Which software is easier to learn: Xero or Sage?

Sage has the edge when it comes to ease of learning. The interface is simple, and the setup is geared toward users with little to no accounting experience. Xero is still user-friendly, but its wider feature set means there’s a bit more to navigate upfront. If you want something intuitive right out of the gate, Sage is the more approachable choice.

Which is better for small businesses: Xero or Sage?

For small businesses that need room to grow, Xero is usually the better fit. It offers more advanced features like project tracking, integrated payroll (in some regions), and unlimited users. Sage, on the other hand, works well for businesses with simpler needs or tighter budgets. If you’re weighing Xero vs Sage for a small business, it depends on how complex your workflows are and how much automation you need.

Can I switch from Xero to Sage (or vice versa)?

Yes, you can switch between Xero and Sage, but it takes planning. Both platforms allow data exports, and there are migration tools and services that can help with the process. Just be aware that historical data like transactions and attachments may not transfer perfectly. Whether you’re moving from Sage to Xero or Xero to Sage, it’s best to make the switch at the start of a new fiscal period if possible.