FreshBooks vs Xero: 2023 Accounting Software Comparison

Xero offers a well-stocked marketplace of 500+ native add-ons for payment processing, customer management, e-commerce, data analysis, POS, and document management. Popular add-ons include Salesforce, Shopify, PayPal, ADP, and Zendesk. For any other integration needs, you can use Xero’s REST API service or consult a developer in their partner network. If you’re managing project-based work, you can also draw up estimates and easily convert them to invoices when the project is completed. FreshBooks offers native mobile apps for iOS and Android devices and is compatible with almost any currency.

As a more robust solution, Xero is a better choice for whole-business financial management or independent accounting. In some ways, an accounting solution’s utility depends on how well it can exchange data with other back-end systems. Integrates with more than 750 apps and offers live, in-house bookkeeping add-on.

You can set up different cash accounts, reconcile book and bank statements, and print checks. We compare FreshBooks and Xero across 11 key areas that we want to see in an accounting software program. You can check out our detailed case study analysis by reading our FreshBooks review and Xero review. If you need both strong inventory accounting and a mobile app, we recommend QuickBooks Online.

Best third-party app integrations: Xero

On the other hand, Xero works well with startups that have hit the ground running and possibly have an employee with a good grasp of accounting. FreshBooks is ideal for the freelancer or solopreneur just coming to terms with budgeting, amongst other financial knowledge needed to run a small profitable business. FreshBooks comes with this option, and you can match your FreshBooks account to your Bank Account and monitor entry for entry.

Moving beyond the basics (invoicing, expenses, and payments), Xero also provides out-of-the-box features for bank reconciliation, inventory, and purchase ordering. If you can’t justify the $90-per-month QuickBooks Online Plus plan, you won’t get inventory management, because QuickBooks Online’s lower-tier plans don’t come with it. This could be a real shortcoming for small online retail businesses, for instance, that need to keep track of their products and the materials used to make them. All of Xero’s plans come with inventory management so business owners can track what’s in stock and which products are selling.

Services for Accountants

If you only send out an invoice or two each month, the Early plan is an affordable option at $13 per month. Otherwise, you’ll have to bump up your subscription or consider QuickBooks Online plans. So, the next best option is to have that kind of luxury at my fingertips using full-service accounting software. In this article, I’ll compare Xero and FreshBooks, two of the most popular entry-level accounting software platforms for digital businesses today. My review is based on the experience of actual users, industry experts, and my experience with one of their major competitors.

Xero is the second-most popular accounting software program in the U.S. after QuickBooks, and is the market leader in several countries, such as Australia. The different features included in Xero’s tiered pricing make it ideal for growing businesses. The FreshBooks app offers a convenient solution because of its invoicing on-the-go feature, which speeds up collections from clients.

1. You can even monitor your company’s performance by customizing and measuring specific KPIs.
2. The FreshBooks app is considered among the best iPhone apps to get you through the workday, helping you create invoices, accept payments, track time and record expenses from your smartphone.
3. FreshBooks gives a fresh, clean look at accounting software — something that’s usually quite complicated to use.
4. For expediency, we’d prefer just to enter the bank statement balance and reconcile directly.

ET, so if you’re having a late-night issue trying to sort out an invoice, you’ll have to wait until morning for in-person help. Since FreshBooks is mainly software for freelancers who often don’t follow traditional working schedules, this could be a drawback, especially if you’re working in a https://accountingcoaching.online/ remote time zone. Xero’s app includes the basics, like sending invoices and assigning expenses, but its capabilities are a bit limited. Plus, Xero doesn’t seem to care to consolidate its mobile experience into one app—there are different Xero apps for managing expenses, projects, and more.

With FreshBooks, you get simplified and automated accounting, invoicing, project management, and more. Plus, with industry-leading customer support, you’ll never struggle alone. FreshBooks has four pricing packages, though the base prices only comprise part of your payments. The Advanced Payments add-on for storing your clients’ payment details and automating recurring payments costs $20 monthly. Each transaction you make through this add-on will cost you 3.5 percent plus 30 cents every time a client makes a payment.

Inventory Management

FreshBooks integrates with a number of payment processors so that you can choose the payment method that works best for you and your business. Whether you want to accept credit card payments, set up bank transfers, or get paid through FreshBooks Payments, you can easily set up the method you prefer. At $20/month, this plan is suitable for freelancers, sole traders, and new businesses. You can send up to 20 invoices and quotes, schedule up to 5 bills, reconcile up to 20 bank transactions, and capture bills and receipts with Hubdoc. Now, we bet you’ve come across the names FreshBooks and Xero in most, if not all, of your search results.

Talk to your accountant and start a free trial to see how easy it is to work together. And if you need a hand our phone support with a live inventory and cost of goods sold rep extends to both you and your accountant with no additional fees. Xero and QuickBooks offer similar features at mostly similar prices.

FreshBooks is the go-to solution for freelancers and solopreneurs who want freedom with managing and billing their clients. While small businesses can use the software as well, the extra charge per team member could add up quickly. It does have the option to input your inventory as invoicing items, but this is clunky and not as intuitive as Xero’s inventory process. 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. For example, Xero allows you to view accounting reports and specific budgets for any time period.

It is fast, secure, and has no hidden fees, similar to Stripe and PayPal. You can post-checkout links on your website, social, or anywhere else online to allow customers to click and pay easily with their credit card. FreshBooks Payments lets your clients pay directly through invoices and automatically records each payment in your account.