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Accounting & Finance · head to head

Avalara vs Xero

Avalara logo

Avalara

Accounting & Finance

Tax compliance done right

From
$29/month
Rated
-
Full reviewWebsite
Xero logo

Xero

All industries

Beautiful accounting software

From
$13/month
Rated
-
Full reviewWebsite

The short version

  • Each has a real cost: Avalara plans start at $699 per state per year, so multi-state sellers multiply that figure rather than paying one subscription; Xero the Early plan caps you at 20 invoices and 5 bills per month, and the invoice limit counts both approving and sending
  • They diverge on capability: Avalara covers Tax calculation, Xero covers Bank reconciliation.

Where they differ

Only the attributes on which Avalara and Xero actually diverge.

Attributes where Avalara and Xero differ
AttributeAvalaraXero
Starting price$29/month$13/month
PlatformsWeb, ApiWeb, Ios, Android, Api
CategoryAccounting & FinanceAll industries
Founded20042006

Identical on both: pricing model (subscription), free tier (No), user rating (Not yet rated).

What each one covers

Drawn from each product's published feature list. An absence here means we hold no record of it - not that the product lacks it.

Only in Avalara

  • Tax calculation
  • Returns filing
  • Exemption management
  • Document management
  • Real-time rates
  • QuickBooks
  • NetSuite
  • Magento

Only in Xero

  • Bank reconciliation
  • Invoicing
  • Bill payment
  • Expense claims
  • Financial reporting
  • Inventory tracking
  • Project tracking
  • Mobile apps

Both cover

  • Shopify

What people use each for

The jobs each tool is most often brought in to do.

Avalara

  • Real-time sales tax calculation at checkoutnot Xero
  • Multi-state and multi-jurisdiction tax determinationnot Xero
  • VAT, lodging, communications and excise tax calculationnot Xero
  • Feeding tax results into an ERP or ecommerce platform through the APInot Xero

Xero

  • Small business bookkeeping, invoicing and bank reconciliationnot Avalara
  • Bill payment and purchase order managementnot Avalara
  • Sharing books with an accountant or bookkeepernot Avalara

Where each one falls short

Documented limitations, not opinions. Every one is a constraint you would hit in normal use.

Avalara

  • Plans start at $699 per state per year, so multi-state sellers multiply that figure rather than paying one subscription
  • Billed by transaction, where one API call is one transaction, so cost tracks invoice volume
  • The free option is limited to the Streamlined Sales Tax programme, in up to 25 states and only for qualifying businesses

Xero

  • The Early plan caps you at 20 invoices and 5 bills per month, and the invoice limit counts both approving and sending
  • Invoices created by connected app partners count against the Early plan invoice limit
  • Multiple currencies, project time and cost tracking, employee expense and mileage claims and industry benchmarking are restricted to the top Established plan at $90 per month
  • Cash flow forecasting is capped at 30 days on Early and 60 days on Growing, with 180 days only on Established
  • Payroll is not included in any plan and costs an extra $36 a month plus $6 per employee or contractor through Gusto
  • Inventory Plus is a paid optional add-on rather than part of any plan
  • The advertised 90% off applies only to the first 6 months, after which the regular $25, $55 or $90 monthly price auto-renews
  • The introductory discount excludes add-ons, usage charges and payment fees
  • Payment fees apply to online invoice payments and to bill payments other than standard domestic ACH, and are billed on top of the subscription
  • Subscriptions are billed monthly with no annual payment option, and after upgrading you must wait one month before downgrading to a cheaper plan
  • Xero states subscription prices are increasing from October 1, 2026

Pricing, plan by plan

Avalara

$29/month
  • AvaTax$50/month
    • Tax calculation
    • Exemption certificates
    • Returns filing

Xero

$13/month
  • Early$13/month
    • Send 20 invoices
    • Enter 5 bills
    • Reconcile bank transactions
  • Growing$37/month
    • Unlimited invoices & bills
    • Bulk reconcile transactions
    • Short-term cash flow
  • Established$70/month
    • Everything in Growing
    • Use multiple currencies
    • Track projects

Which should you pick?

Choose Avalara if

  • You need tax calculation.
  • You work on Web, Api.
  • You also want returns filing.
Avalara review

Choose Xero if

  • You need bank reconciliation.
  • You work on Web, Ios, Android, Api.
  • You also want invoicing.
Xero review

Questions people ask

Is Avalara or Xero better?
Neither clearly leads. Avalara starts at $29/month and Xero at $13/month, and user ratings are close enough to be indistinguishable. Choose on capability and platform support.
Which is cheaper, Avalara or Xero?
Avalara starts at $29/month and Xero at $13/month.
Does Avalara or Xero run on more platforms?
Avalara runs on Web, Api. Xero runs on Web, Ios, Android, Api.
What is Avalara best used for?
Avalara is most often used for real-time sales tax calculation at checkout, multi-state and multi-jurisdiction tax determination, vat, lodging, communications and excise tax calculation, feeding tax results into an erp or ecommerce platform through the api. Of those, real-time sales tax calculation at checkout and multi-state and multi-jurisdiction tax determination are not what Xero is typically brought in for.
What can Avalara do that Xero cannot?
Avalara covers Tax calculation, Returns filing, Exemption management, Document management. Xero covers Bank reconciliation, Invoicing, Bill payment, Expense claims. Both handle Shopify.
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