QuickBooks vs Xero for dividends: how each records a UK dividend

This guide compares how Xero and QuickBooks Online handle a dividend and what Dividendly does in each. It is for information only and is not tax, legal or software-selection advice. Confirm the accounting treatment for your company with an accountant.

Both Xero and QuickBooks Online can record a UK dividend, and Dividendly works with both. With Xero, Dividendly posts one SPEND transaction per shareholder, paid to a Xero contact. With QuickBooks Online, it posts one Purchase per shareholder, with a No VAT line, paid to a vendor. The voucher, board minutes and declaration or resolution are the same either way.

If you have read that Xero is the only accounting package that can automate dividend vouchers, that is out of date. Dividendly connects to QuickBooks Online as well as Xero, with the same documents, the same plans and no extra charge for either.

The short answer: both work, and the bookkeeping differs

Choosing between Xero and QuickBooks Online is a bigger decision than dividends. Bank feeds, payroll, VAT returns and what your accountant already uses all matter more. This page does not pick one. It sets out how a dividend lands in each package, so you know what to expect from whichever one you run.

Some things are the same in both. With either package connected, Dividendly:

• allocates the total dividend across shareholders by the number of shares each holds,
• issues the full document bundle for each shareholder: a dividend voucher, board minutes, and a dividend declaration (interim) or shareholder resolution (final),
• runs each bundle through an e-signature acknowledgement step and emails it to the shareholder,
• applies the same plan limits, with the integration included on every plan and no surcharge.

The rules are also the same: one accounting connection per company at a time, UK companies only, and QuickBooks Online only (not QuickBooks Desktop). Dividendly also works with no accounting software at all, in documents-only mode.

Side by side: how each records a dividend

Each row describes what happens when Dividendly is connected to that package. Where a difference comes from the package itself, the row says so.

	Dividendly with Xero	Dividendly with QuickBooks Online
Transaction posted	One SPEND transaction per shareholder	One Purchase per shareholder, with a No VAT line
Coded to	The bank account and dividend account you choose	The bank account and dividend equity account you choose
Payee	The Xero contact mapped to each shareholder	The existing QuickBooks vendor mapped to each shareholder
Financial year	Read from Xero	You confirm the year-end when you connect, because QuickBooks stores only the start month
Staying connected	Rolling token	Intuit's refresh token lasts about 100 days; Dividendly prompts you to reconnect before it lapses
Deleting a voucher from an upcoming run	Voids the SPEND transaction	Permanently deletes the Purchase, because QuickBooks doesn't let apps void a Purchase
Deleting a back-filled or manual voucher	Nothing changes in Xero	Nothing changes in QuickBooks
Attachments	Generated PDFs attached to the SPEND transaction	Generated PDFs attached to the Purchase
Back-fill reads	Past SPEND transactions on the dividend account	Past Purchases on the dividend account, in a date window you choose
Signing in to Dividendly	Magic link, or Sign in with Xero	Magic link or Sign in with Xero; QuickBooks is connect-only

A few of those rows need a sentence more.

Purchase and "expense". Purchase is the name QuickBooks' API uses for money paid out. In QuickBooks it shows as an expense transaction. "Expense" describes the type of transaction, not where the dividend is coded: the line goes to the dividend equity account you chose. That matters because, as GOV.UK puts it, "You cannot count dividends as business costs when you work out your Corporation Tax."

Vendors and suppliers. Dividendly maps each shareholder to a QuickBooks vendor, and the UK version of QuickBooks lists vendors under Suppliers (All apps > Expenses & Bills > Suppliers, according to Intuit's UK help). Dividendly does not create vendors. If a shareholder has no supplier record, add one in QuickBooks before you map them. In Xero, each shareholder maps to the contact the payment is made to.

Void or delete. In Xero, Dividendly voids the SPEND transaction. Dividendly can't void a QuickBooks Purchase (QuickBooks doesn't let apps void one), so it deletes it permanently, together with its attachment. This applies only to vouchers from an upcoming run, because those are the only ones with a transaction Dividendly posted. Generated vouchers cannot be edited. To correct one, delete it and issue a new one, knowing what the delete does in your package.

What it asks for. Dividendly requests a single scope from Intuit, com.intuit.quickbooks.accounting. For Xero it requests the accounting scopes listed on the security page. It does not read payroll or payments from either.

Reconciliation. Neither connection reconciles anything. The transaction Dividendly posts sits in your books like one you entered yourself, and you reconcile it against the bank line in Xero or QuickBooks as usual.

Setting up the dividends account in each

Dividendly asks for two accounts when you connect: the bank account dividends are paid from, and the account they are coded to. It uses that pair for every posting, so set up the dividends account first.

In Xero. Xero's default UK chart of accounts has no dividends account. Dividends normally go to their own equity account rather than to 960 Retained Earnings, so the year's total shows as a separate figure. Add an equity account for dividends paid and agree its name and code with your accountant. The full steps are in how to record dividends in Xero.

In QuickBooks Online. Check your chart of accounts for an equity account for dividends. If there isn't one, add one. QuickBooks asks you to classify the account when you create it, so confirm the type with your accountant. Dividendly then codes each Purchase line to it. The full steps are in how to record dividends in QuickBooks Online.

In both packages, the bookkeeping depends on how the dividend was settled. A dividend paid from the bank is a payment out of the bank account. A dividend credited to a director's loan account is usually a journal, with no bank payment at all. Dividendly posts the bank payment version only.

Attaching vouchers and minutes

GOV.UK says that for each dividend "You must give a copy of the voucher to recipients of the dividend and keep a copy for your company's records." Attaching the voucher to the transaction in your books is a convenient place for the company's copy. It is not the shareholder's copy.

By hand. Both packages let you attach files to a transaction. In QuickBooks Online, expense transactions take attachments. In Xero, attach the file to the bank transaction. Attach the minutes and the declaration or resolution as well as the voucher, so the whole decision sits with the payment.

With Dividendly. On an upcoming run, Dividendly attaches the generated PDFs to the SPEND transaction in Xero or the Purchase in QuickBooks. Each shareholder also receives their documents by email, and a copy stays in voucher history. A back-filled voucher does not create a transaction. It is stored in voucher history, where you can download it.

Catching up on past dividends in each

Historical back-fill reads dividends that are already in your books and drafts a voucher for each one you select. It needs a connected Xero or QuickBooks account, so it is not available in documents-only mode. It is included on the Growth, Accountant and Enterprise plans, not on Starter.

• Xero: reads past SPEND transactions on your dividend account.
• QuickBooks Online: reads past Purchases on your dividend account, within a date window you choose.

In both, back-fill finds only SPEND transactions or Purchases coded to the dividend account. A dividend coded to another account won't appear until it is recoded. A dividend posted as a journal, such as one credited to a director's loan account, is neither, so back-fill won't find it. For those, use the manual voucher flow: enter the voucher fields, preview the PDF, then generate it.

A late voucher records the dividend as it happened, with its original date and amount. The guide to missing dividend vouchers covers how to catch up without backdating.

Accountants with clients on both

Plenty of practices have some clients on Xero, some on QuickBooks Online and some on spreadsheets. In Dividendly each company connects its own package, or none, and you switch between companies from one login. Each company's directors, vouchers and settings stay scoped to that company. The Accountant plan covers up to 10 companies and Enterprise is unlimited.

The workflow is the same for every client. Brief your team on four differences:

1. Payee records. QuickBooks clients need an existing supplier record for each shareholder before mapping. Xero clients map to existing contacts.
2. Deletes. Deleting an upcoming-run voucher voids the transaction in Xero but permanently deletes it in QuickBooks.
3. Reconnects. QuickBooks connections need re-authorising about every 100 days. Dividendly shows the prompt before the token lapses.
4. Year-end. For QuickBooks clients, someone confirms the financial-year end at connect. Xero supplies it.

For the practice side, see Dividendly for accountants, the accountants' guide to client dividends in Xero and the accountants' guide to client dividends in QuickBooks Online.

Switching a company between Xero and QuickBooks in Dividendly

A company in Dividendly connects to one accounting package at a time. To switch from QuickBooks to Xero, or the other way, disconnect the current package and then connect the other.

After you connect, work through the setup checklist for the new package: choose its bank account and dividend account, and map each shareholder to a contact (Xero) or supplier record (QuickBooks). Set up the dividends account in the new package before the first run.

Back-fill reads only from the package that is connected at the time. Bear that in mind when you choose the order of the move.

Moving the books themselves (opening balances, history, bank feeds) is a job for your accountant or a migration service. Dividendly does not move ledger data between packages. You can also revoke Dividendly's access from the "Manage connected apps" area in Xero or Intuit at any time.

What Dividendly does, and doesn't do, in either package

Dividendly drafts and issues the paperwork, posts the accounting record and files the PDFs against it. It also back-fills vouchers for dividends already in your books on Growth and above. Your accounting connection tokens are encrypted at rest (AES-256-GCM) and your voucher PDFs live in private storage behind expiring links. The security page has the full scope lists.

It does not move money, reconcile bank feeds or check that the company has distributable reserves. Those stay with the directors and their accountant. The Xero and QuickBooks integrations are included on every plan, and each paid plan starts with a 7-day free trial; see pricing. For the full walkthroughs, read the Xero integration guide or the QuickBooks Online integration guide.

FAQ: QuickBooks vs Xero for dividends

Does Dividendly work with QuickBooks Online, or only Xero?

Both. QuickBooks Online and Xero are both supported, with the same documents and plans. You can also use Dividendly with no accounting software in documents-only mode.

Which is better for dividends, Xero or QuickBooks?

This guide doesn't say. Both can record a dividend, and Dividendly produces the same paperwork with either. The differences are in the bookkeeping: SPEND vs Purchase, contact vs vendor, void vs permanent delete. Choose your accounting package for your wider needs, with your accountant.

Can one company be connected to Xero and QuickBooks at the same time?

No. Each company connects to one package at a time. An accountant can still have some client companies on Xero and others on QuickBooks Online.

Does connecting QuickBooks cost more than connecting Xero?

No. Both integrations are included on every plan with no surcharge, and plan limits are the same whichever way you work.

Does Dividendly work with QuickBooks Desktop?

No. It works with QuickBooks Online only, for UK companies.

Why does QuickBooks ask me to reconnect when Xero doesn't?

Intuit's refresh tokens expire after about 100 days. Dividendly tracks the expiry and shows a reconnect prompt before it lapses. Xero connections use a rolling token, so the roughly 100-day reconnect is specific to QuickBooks.

Can I sign in to Dividendly with my QuickBooks login?

No. You sign in with a magic link or with Sign in with Xero. QuickBooks is connected from inside the company once you are signed in.

Can I edit a voucher after it's generated?

No. Delete it and issue a new one. If the voucher came from an upcoming run, check what the delete does first: Xero voids the transaction, while QuickBooks deletes the Purchase permanently.

Does Dividendly reconcile the dividend against my bank feed?

No. It posts the transaction and attaches the PDFs. You reconcile it in Xero or QuickBooks as you would any other payment.