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Microsoft Dynamics 365 vs Xero

Microsoft Dynamics 365 logo

Microsoft Dynamics 365

Software

AI-powered business applications for intelligent enterprise

From
$50/month
Rated
-
Full reviewWebsite
Xero logo

Xero

Software

Beautiful accounting software

From
$13/month
Rated
-
Full reviewWebsite

The short version

  • Each has a real cost: Microsoft Dynamics 365 business Central Essentials is $80 per user per month and Premium is $110 per user per month, both requiring annual billing to get that rate; 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: Microsoft Dynamics 365 covers Financial management, Xero covers Bank reconciliation.

Where they differ

Only the attributes on which Microsoft Dynamics 365 and Xero actually diverge.

Attributes where Microsoft Dynamics 365 and Xero differ
AttributeMicrosoft Dynamics 365Xero
Starting price$50/month$13/month
PlatformsCloud, Web, MobileWeb, Ios, Android, Api
Founded19752006

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

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 Microsoft Dynamics 365

  • Financial management
  • Supply chain
  • Manufacturing
  • Project operations
  • Customer service
  • Microsoft 365
  • Power BI
  • Power Apps

Only in Xero

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

Both cover

  • Data encryption

What people use each for

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

Microsoft Dynamics 365

  • Mid-market ERP and CRM suite licensed per named user across separate app modulesnot Xero

Xero

  • Small business bookkeeping, invoicing and bank reconciliationnot Microsoft Dynamics 365
  • Bill payment and purchase order managementnot Microsoft Dynamics 365
  • Sharing books with an accountant or bookkeepernot Microsoft Dynamics 365

Where each one falls short

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

Microsoft Dynamics 365

  • Business Central Essentials is $80 per user per month and Premium is $110 per user per month, both requiring annual billing to get that rate
  • Sales Order Agent and Payables Agent features require separately purchased Copilot Credits on top of the per-user license
  • Agent features additionally require a linked Azure subscription

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

Microsoft Dynamics 365

$50/month
  • Finance$135/month
    • Financial management
    • Accounting
    • Budgeting
  • Supply Chain Management$165/month
    • Supply chain planning
    • Inventory management
    • Demand forecasting

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 Microsoft Dynamics 365 if

  • You need financial management.
  • You work on Cloud, Web, Mobile.
  • You also want supply chain.
Microsoft Dynamics 365 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 Microsoft Dynamics 365 or Xero better?
Neither clearly leads. Microsoft Dynamics 365 starts at $50/month and Xero at $13/month, and user ratings are close enough to be indistinguishable. Choose on capability and platform support.
Which is cheaper, Microsoft Dynamics 365 or Xero?
Microsoft Dynamics 365 starts at $50/month and Xero at $13/month.
Does Microsoft Dynamics 365 or Xero run on more platforms?
Microsoft Dynamics 365 runs on Cloud, Web, Mobile. Xero runs on Web, Ios, Android, Api.
What is Microsoft Dynamics 365 best used for?
Microsoft Dynamics 365 is most often used for mid-market erp and crm suite licensed per named user across separate app modules. Of those, mid-market erp and crm suite licensed per named user across separate app modules is not what Xero is typically brought in for.
What can Microsoft Dynamics 365 do that Xero cannot?
Microsoft Dynamics 365 covers Financial management, Supply chain, Manufacturing, Project operations. Xero covers Bank reconciliation, Invoicing, Bill payment, Expense claims. Both handle Data encryption.
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Related pages

More on Microsoft Dynamics 365

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