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April 17, 2024

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FreshBooks vs Xero: Which Accounting Software is Right for You?

Internet connection is needed to use the app, and users can add, edit, or remove data through the app. When setting up a project estimate in both FreshBooks and Xero, you have the option to add sales taxes, inventories, and labor. You can also compare cost estimates to actual costs, which is useful for contractors. The only project accounting feature lacking in FreshBooks is the ability to assign actual inventory cost to a project, which is expected since FreshBooks doesn’t provide inventory accounting. FreshBooks falls behind Xero in terms of general features because it trades advanced features in favor of ease of use.

FreshBooks customers that we spoke to emphasized that FreshBooks is simple with limited functionality. It lacks inventory management features, which will limit the types of businesses that will find significant value in the platform. Overall, FreshBooks is a solid starting option for those who need to get up and running with accounting software in just a few minutes. Both have features that can help you and your business manage accounting transactions properly. FreshBooks is the best software for freelancers and service providers.

  • FreshBooks has significantly reduced the amount of time I spend on the administrative front, while making it easier for my clients to pay me.
  • FreshBooks started out as invoicing software for small-business owners who wanted to bill clients quickly and efficiently.
  • Accounting software adapts to these changes seamlessly, accommodating the evolving needs of the business.
  • At 91%, FreshBooks has the best rating for customer support among all competitors.

Meanwhile, users who left Xero reviews said that the software is easy to set up and use, adding that it has a simple and clean user interface along with intuitive features. Some also praised its fixed assets manager and project accounting interest income is what type of account capabilities. However, its inability to reconcile transactions without bank feeds and its lack of live phone and chat support are its biggest drawbacks. Our overview of FreshBooks’ A/P management is basic and direct to the point.

Best Accounting Software for Small Businesses

For a full description of Xero’s features, check out the full Xero review. With inventory management features that FreshBooks lacks, this tool is ideal for those that sell physical goods, though companies that require the utmost detail may find that it falls short. Xero is extremely well-priced for the functionality that you get, and we found it very easy to use in spite of it being one of the more advanced tools on the market.

FreshBooks users appreciate that it’s one-stop accounting software that’s easy to set up and use. Reviewers also praised its project tracking features and how easy it is to invoice clients if you use the project feature. The software’s biggest drawback is its inability to manage inventory, and users wished that FreshBooks had a live chat feature.

All-In-One Business Software

At the very least, a good accounting system should include features for tracking project-related costs for labor, materials, services, and inventory items. As a full-featured accounting software program, there are many features to explore. However, once you get the navigational flow, it’s a matter of remembering where to find specific accounting information based on the menu categories.

Transparent Pricing and Plans

She has owned Check Yourself, a bookkeeping and payroll service that specializes in small business, for over twenty years. She holds a Bachelor’s degree from UCLA and has served on the Board of the National Association of Women Business Owners. She also regularly writes about business for various consumer publications. Web pages aren’t cluttered, and Xero uses a lot of negative white space so that the web page window can adjust when opening two web browsers during multitasking. It utilizes the tabular format in most of its modules, making it easy for users to pick up important information without clicking further. Meanwhile, Xero’s banking and cash management system allows but doesn’t require a bank feed connection.

Time Tracking

The software has a broad range of features, including bill payment, inventory management, and the ability to integrate with numerous apps like HubSpot and DocuSign. The platform has a user-friendly interface, making it ideal for small business owners without extensive accounting knowledge. FreshBooks is a freelancer’s dream accounting software, as it comes with unlimited invoicing, estimates and time tracking. You can even set up recurring invoices each month, late payment reminders and scheduled late fees for overdue invoices. For tracking your expenses, FreshBooks’ base plan comes with mobile receipt scanning and bill line item capture.

More advanced features are reserved for more expensive plans. The accounting software that fits your business could be the difference in a better CRM direction for your business. FinancesOnline is available for free for all business professionals interested in an efficient way to find top-notch SaaS solutions.

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Xero offers three paid plans based on the various stages of a business’s growth. FreshBooks doesn’t offer bank reconciliation with its least expensive option, FreshBooks Lite. And while the software automatically suggests some transaction matches for you during the reconciliation process, you cannot create your own custom bank rules. Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence.

FreshBooks offers online accounting software designed specifically for small- to medium-sized businesses, with features accessible via desktop or mobile. The customizable “Let’s Talk” plan stands out as a unique option, allowing users to select the features they want. However, limitations in features, inefficiencies, and bugs hinder its scalability and overall user experience, making it seem fairly average in terms of usability and other aspects. Xero is cloud-based accounting software for small to medium-sized businesses with a subscription model offering three plans priced between $15-$78/month.

Xero integrations

And with the best customer support in the industry, it’s easy to see why Xero customers switched to FreshBooks. All businesses should use an accounting software to manage and track their finances. As a business owner, you’ll use the software to send invoices to clients, upload receipts, and input general financial information into the database. Your bookkeeper or accountant will likely be given access to the platform and will likely do most of the heavy lifting regarding the reporting, tax forms, and more.

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