FreshBooks vs Xero: Choosing accounting software 2024

We’ve analyzed and rated the best online bookkeeping services to help you make the best decision when choosing the right one. The Xero app also has the basic features found in the cloud version, such as invoicing, bank reconciliation, cash flows, profit, and loss. A useful feature is its contact management integration with invoicing. The app also lets you add contacts, when are expenses credited and Xero gives you useful information about the person automatically, such as the average days to pay and billing activity. FreshBooks integrates with several apps commonly used by small businesses, but its integration options aren’t as vast as Xero’s. All are third-party apps that can help you further streamline your accounting and project management processes.

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Add-Ons

In addition, the client chatting and sharing capabilities make FreshBooks an appealing and personable software solution for freelancers who depend on relationships with their clients. With a fee, you can also allow your clients to pay with credit cards through FreshBooks’ online payment processing. Both QuickBooks and Xero excel at helping small businesses keep track of financial details. But if you are a freelancer, neither plan may make financial sense because they are based on the number of users or people under your employ.

• When setting up a project estimate in both FreshBooks and Xero, you have the option to add sales taxes, inventories, and labor.
• If you’re not comfortable using the software, you’re not going to get the most out of it.
• Includes tools that help automate the reconciliation process, along with a global search function; has a simple layout and a customizable dashboard.
• Between the three options – Xero vs Quickbooks vs Freshbooks, Freshbooks is likely the least expensive for small businesses because it bases pay on the number of clients.

You have a lot of control over the look of the invoice templates to make them match your brand. Key available apps through MYOB App Marketplace include Fathom, Lightyear, ServiceM8, KIM, Magento Connector, Calxa Express, Common Ledger, Receipt Bank, and Spotlight Reporting. QuickBooks is a great product, but it tries to be something for everyone, which means it’s a bigger tool than most people need.

Xero vs. FreshBooks: Key basic plan features

Integrating with third-party apps is important in today’s marketplace to ensure that your accounting software works with the other tools your company is using. This helps workflows move smoothly and prevents users from having to constantly toggle between two programs when working. A big comparison between FreshBooks vs. QuickBooks is the number of billable clients you can have on the lower-tiered plans. Where FreshBooks limits the number of clients to five on its Lite plan, QuickBooks is unlimited on all its plans. For FreshBooks users who don’t have a large book of business, this could be a non-issue, but for small business owners who must invoice a large number of clients, QuickBooks is the better solution.

Written by back office accountants

Some also praised its fixed assets manager and project accounting capabilities. However, its inability to reconcile transactions without bank feeds and its lack of live phone and chat support are its biggest drawbacks. Xero is a business accounting software that is designed for small- to medium-sized businesses.

Fit Small Business Case Study

Even if you’ve never used accounting software before, you should be able to get started with FreshBooks without any problems. One of the most important factors to consider when choosing accounting software is how easy it is to use. If you’re not comfortable using the software, you’re not going to get the most out of it. You will also find Quickbooks Online’s payroll management feature helpful if you have employees. You can integrate a payroll software you are using on Quickbooks or use Quickbooks Payroll itself.

At the end of the day, weigh your needs and your budget, and if all else fails, flip a coin. FreshBooks’ reports may be more aesthetically pleasing and easier to navigate, but Xero’s include the level of detail needed to stay organized as your company grows. When comparing the reports generated by FreshBooks vs. Xero, I found Xero’s to consistently provide more detail and offer more flexibility with data presentation than FreshBooks’. Coming from someone who’s not a numbers person, anyone who does accounting is a brave and admirable soul, and I’m glad that there are excellent tools out there to make your job easier. Kelly Main is a Marketing Editor and Writer specializing in digital marketing, online advertising and web design and development.

Reporting and Analytics Capabilities

FreshBooks keeps the dashboard clean with limited summaries so that you aren’t overwhelmed with the data, whereas QuickBooks gives you the option of seeing everything from the onset. However, this plan is exclusively for sole proprietors who file Schedule C. If you have any other type of business, you may need to check out the other plans. Also, you can’t upgrade from a Self-Employed plan to a Small Business plan. And you don’t need to give your credit card info to give it a spin.