Xero -- better than QuickBooks for start-up company?

I like Xero. I use Xero. Whether it is the right choice for you is another matter altogether (too many variables and not enough information in your post).

But before you pick any system you need to know where you think you'll be in the mid and long term and plan accordingly or at least realize that you will end up implementing another system I. The near future; a costly and time consuming process.

Wayne is correct. Xero is a solid, cost-effective system for a small business, however, think about three things before you decide which system to start with: 1) Does the software give me everything that I need now and as I grow? (e.g., can I track project costs, revenue and costs/expenses by customer, product, sales or distribution channel, etc); 2) How far can this software take me (i.e., what level of transactions or customers or revenue growth will it let me grow to before I have to change?); and 3) "What's next"? (e.g., when you make the move to another ERP system, how easy or difficult will it be to get the data out? What system looks like it will be the best fit in the future).

If any of this is beyond your expertise or knowledge, find a knowledgeable advisor who can help you make a good decision now that won't hurt you in the future.

I agree with Len. If you're managing multiple legal entities and you need to do cross-entity reporting or transactions on a frequent basis, Intacct can definitely be a better choice. The choice, however, comes with definite downsides, which you need to be aware of.

As an operational CFO, user and implementer of many of these systems including Xero, Intacct, Netsuite, QB etc I think there are many that would agree that there is no perfect solution and each has pros and cons. I agree very much with prior comments that a thoughtful and methodical approach to an implementation is key to success. Feel free to message me privately if you would like some personal insights.

Start cheapest, move up later. Maybe spend some time to investigate how easy it is to export all of your transactions from whatever system you start on to whatever the more mature health services companies are using in your industry. Xero and QB probably suffice.

Echoing a lot of the prior;
Xero is fantastic, cheap, easy, and has a really big plus: they're focused on partners and open APIs. This means, for example, instead of having consolidations baked in, you use a Xero partner (like Fathom) for consolidated planning, KPIs, reporting, tax, etc. Using Xero means "do your homework" on the partner apps appropriate to your business (inventory, timecards, etc) before implementing. They are (apparently) deliberately avoiding stepping on partner developer toes. This means they've got the best ecosystem in their class.
QB is catching up. They are less partner friendly, less open, etc. That being said, if they fit your needs, it scales pretty well, and the modules you need are mostly already there.
Sage and Intaact are both much more robust. They are designed to be more customizeable. That means investment, but it also means a more scale-able solution. I've had to migrate companies off of Sage because they do tend to trail in the partner arena, but if you don't have early-adopter needs, they could be a good fit.
Finishing with a shout out to Mr. Scott; you likely don't know what your GL and processes are going to look like a year from now if you are growing rapidly. Take the easy path (Xero, imho), and then as you scale past that, migrate over time. Migration from Xero is, happily, incredibly easy, especially compared to the competition, so you won't have over-invested and won't be trapped.

A last comment: I'm a big fan of the decentralized model. The next time a cool new app comes out (lets say, automated sales tax optimization, rev rec, sales force comp...make a list), it won't come from any of the major players. It will come from someone trying to be disruptive. The less "shrink-wrapped" your GL is, the more likely it will be that you'll be able to adopt the new software.

I can speak to the utility of setting up Xero but have limited experience on the Quickbooks side. The embedded tax tables in foreign entities (UK and AUS) were simple to use and easy to ramp up for a SaaS based revenue company. Based on the healthcare business I believe you could set up item codes to facilitate invoicing for most any billable item. When it comes to other forms of revenue recognition i.e, subscription revenue there are limitations. The cash reconciliation and vendor payment modules are straightforward and intuitive. In terms of consolidations and viewing activity in multiple entities it's easy to view and pull data out of the multiple entity structure but rolling up into a consolidated set of financials can be difficult with the off the shelf product.

The benefit of Xero is that it is fully cloud based as was developed as such from the start. A lot of the other accounting packages such as quick books have work arounds so that they can be used on the cloud but they are not properly cloud based.

Xero is very good at taking feedback and developing their software in accordance with user's wish lists and respond quickly to queries. The online tutorials make it very easy to learn the features.

I particularly like the multi currency and payroll features and the tracking option works well for me as I have to track costs against projects. A lot of developers are developing bolt on packages too so you can get quite specific with your requirements

I understand that they are about to go live with a Spanish version too and will be developing other languages in the future.

I think it will overtake Quick Books in the US in the next year or two

This post is a little old, but Xero has done quite a bit in the upgrade department.

From a very expansive API to new reports and report generator. They also have increased the number of 3rd party add-ons.

It deserves a second look at least.