This is the heavyweight title fight of small business accounting, and after years of watching both evolve, the honest summary is that they have converged on features and diverged on philosophy. Almost anything one does, the other does somewhere in its plan structure. What differs is how each behaves as your business and team grow.
Xero's defining decision is unlimited users on every plan. A founder, a bookkeeper, an accountant and an operations manager can all work in the file with no licence arithmetic, which is why accounting practices adore it and why collaborative businesses drift toward it. Its reconciliation remains best in class and its app marketplace is the largest in the category. QuickBooks Online counters with the strongest reporting engine at this price point, receipt capture that genuinely works, project profitability tracking that service businesses actually use, and the advantage of near universal accountant familiarity. Its weakness is the ladder: user limits and feature gates mean the plan you budgeted for is rarely the plan you end up on, and the renewal pricing after intro offers draws more complaints than the software itself.
Choose Xero if several people touch the books, if you value the connected app ecosystem, or if your accountant runs a Xero practice. Choose QuickBooks Online if reporting depth and project level profit visibility drive your decisions, and you are comfortable paying up a tier as you grow. Neither choice is wrong, one of them is simply wrong for how your particular business works, and the free trials exist to reveal which.