BookKeeper vs Xero

The Hidden Cost of Xero's Tiers

Xero Starter looks affordable at $25 CAD/mo, until you hit its monthly limits:

• 20 invoices per month
• 5 bills per month
• 20 bank reconciliations per month

Most active freelancers blow through these in the first week. To remove limits, you need Xero Standard at $55 CAD/mo — nearly 4x what BookKeeper Solo costs.

Need multi-currency support? That requires Xero Premium at $75 CAD/mo. And Xero has announced price increases for Standard and Premium plans effective April 2026.

BookKeeper has no such transaction caps on any paid tier. Solo at $14/mo includes 200 credits per month with full AI scanning on every one.

AI Receipt Processing vs Manual Reconciliation

Xero includes Hubdoc on all plans for document capture, which uses traditional OCR to extract basic data from receipts and bills. It works, but it is the same generation of technology that has been around for a decade.

BookKeeper uses Gemini 2.0 Flash — a modern large language model that understands receipt context, not just characters. It handles faded thermal paper, crumpled receipts, and multi-language text that trips up traditional OCR.

The key difference: BookKeeper's AI learns from your corrections. Miscategorize a gas station receipt? Fix it once, and the AI remembers for next time. Xero's bank rules require you to manually create matching rules for every pattern.

BookKeeper also auto-matches receipts to bank transactions based on amount, date, and vendor. Xero's auto-reconcile feature is still in Beta and only available on Standard ($55/mo) and above.

Where Xero Wins

Xero is a solid general accounting platform with real advantages:

• Unlimited users on all plans — If you have a team, Xero's pricing model is generous. Even the $25 Starter plan includes unlimited users. BookKeeper charges per-tier.
• App ecosystem — Over 1,000 integrations covering invoicing, payments, inventory, and CRM.
• Live bank feeds — Direct connections to all major Canadian banks (TD, RBC, Scotiabank, BMO, CIBC). BookKeeper imports bank statements as PDF files.
• Accountant network — Strong advisor ecosystem, especially outside North America. Many Canadian accountants support Xero alongside QuickBooks.
• Reporting — Real-time financial dashboards, KPI analysis, and performance tracking on Standard and Premium plans.

If you need a full accounting system for a team-based business, Xero's unlimited-user model is hard to beat.

Who Should Choose Which?

Choose BookKeeper if you are a solo freelancer or small business owner who needs to capture receipts, categorize expenses, and prepare for tax season. You want AI-powered automation without paying $55/mo to escape Xero's Starter limits.

Choose Xero if you have a team that needs shared access to accounting (unlimited users), you work with an accountant who prefers Xero, or you need full double-entry accounting with a rich integration ecosystem.

Canadian Tax: AI Detection vs Manual Setup

Xero supports Canadian GST/HST and provides sales tax tracking, but it relies on you to configure tax rates and assign them correctly.

BookKeeper's AI reads the tax amounts directly from your receipts. A receipt from Alberta gets tagged as 5% GST. A receipt from Quebec gets split into GST and QST automatically. This matters because:

• PST in BC, Saskatchewan, and Manitoba is not recoverable as an Input Tax Credit
• QST requires separate registration with Revenu Québec
• HST provinces combine federal and provincial tax into one rate

BookKeeper separates recoverable from non-recoverable tax automatically, so you know exactly what you can claim back from the CRA.

Frequently Asked Questions

Is Xero Starter usable for a real business?

Barely. With only 20 invoices, 5 bills, and 20 bank reconciliations per month, Xero Starter is essentially a trial. Most businesses need Standard ($55/mo) to function. BookKeeper Solo ($14/mo) has no such limits.

Does Xero have better reporting than BookKeeper?

Yes. Xero offers real-time financial dashboards, profit-and-loss statements, and KPI tracking. BookKeeper focuses on receipt and expense reporting with tax summaries. If you need full financial reporting, Xero is more comprehensive.

Can I use BookKeeper and Xero together?

Yes. Some businesses use BookKeeper for AI receipt scanning and export the data to Xero for full accounting. BookKeeper's CSV export is compatible with Xero imports.

Does Xero handle Canadian payroll?

Not natively. Xero requires a third-party payroll provider like Wagepoint or Rise People, which adds $20-40 CAD/mo to your costs. BookKeeper does not offer payroll either.