To know which might be right for your needs, check out our FreshBooks vs. Xero comparison. Now that we’ve reviewed the details of both of these accounting software solutions, let’s discuss the significant ways in which FreshBooks vs. Xero compare against one another. Now that we know what the pricing and features look like for the different FreshBooks plans, let’s explore what Xero can offer. Xero, as we’ve mentioned, also has three plan options—Early, Growing, and Established. With the Plus plan, you also have the option to add FreshBooks advanced payments for a fee of $20 per month. As we mentioned earlier, however, FreshBooks and Xero have core similarities.

Features: FreshBooks vs. Xero

When it comes to small business accounting, creating invoices is one of the key accounting features that endear small business owners to an accounting provider amongst other providers. Both FreshBooks and Xero offer online services and are cloud-based accounting software that can be used on the go. If you send dozens of invoices a month to dozens of clients, accounting software with truly unlimited invoicing will be a better fit for you than either Xero or FreshBooks. In contrast, QuickBooks Online builds user limits into each plan. For instance, its cheapest plan allows for one user plus accountant access.

FreshBooks Review 2024: Features, Pros And Cons

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. Because of these restrictions on your accounting capabilities, Xero Early is geared towards very small businesses or sole proprietors. Salesforce is a prominent player in the CRM market, but there are several noteworthy alternatives that we’ve featured in our “best of” lists and reviews. These alternatives often receive praise for their unique features, pricing and suitability for different business sizes and needs.

Are FreshBooks and Xero cloud-based?

If you want to add team members to your account, you’ll need to pay $10 per month, per user. The final FreshBooks plan, Premium, is designed for larger, growing businesses. For $50 per month ($45 per month for the annual plan), you have access to all of the features of the previous two plans and you can accommodate 500 billable clients.

Trending Accounting Software News

Accounting and invoicing software performs a key role in tracking your business’s finances. It helps you keep an accurate record of your books, as well as get paid via invoices. Two popular small business accounting software programs are FreshBooks and Xero. Global digital transformation has redefined the day-to-day operations of accountants as they increasingly transition to data-driven cloud accounting platforms.

1. The software helps users to keep track of their finances, customers and vendors.
2. You’ll see prompts to add an existing client to the invoice, along with your product or service.
3. However, it is worth remembering that Xero’s plan prices are higher than FreshBooks’, and that its more advanced features come at a cost.
4. FreshBooks brings some serious pizzazz and excitement to accounting, while Xero takes a more polished, business-like approach.
5. These ratings are meant to provide clarity in the decision-making process, but what’s best for your business will depend on its size, growth trajectory and which features you need most.

Imagine doing this without invoicing software—dealing with paper invoices and receipts and having to keep track of phone and address records separately. With the ability to send unlimited, customizable invoices, payment reminders and proposals to clients, FreshBooks is the optimal solution for freelancers or solo entrepreneurs. It also lets you https://www.accountingcoaching.online/free-cpa-questions-6-sources-for-free-cpa-exam/ track time and billable hours so clients can see exactly what you’re charging for. We prefer Xero if you’re a larger business looking for more potent features, such as bank account reconciliation and Gusto payroll software. Xero also has robust file storage that lets you manage and share documents, bills, contracts and receipts on the cloud.

If you want three people to access your accounting software, you’ll have to choose the Essentials plan, which doubles your starting price from $25 to $50 a month. Xero offers a choice of three subscription plans, which range from $15 to $78 per month. Regardless of which subscription you choose, you’ll have access for unlimited users. At the very least, a good accounting system should include features for tracking project-related costs for labor, materials, services, and inventory items. Many businesses are involved in the sales of products, so it’s essential that the best accounting software has a dedicated inventory management system.

FreshBooks offers 60% off for the first six months and an additional 10% off if you take the annual billing option if you buy immediately. Otherwise, you can try FreshBooks for free for 30 days and choose a plan at regular prices. All FreshBooks plans, except for the highest-tier custom plan, come with one user.

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 offers many more discounts than Xero, and it wins here in terms of pricing since it offers significantly affordable pricing plans compared with Xero. However, since FreshBooks charges $10 per additional user, per month, it can quickly become more expensive than Xero if you need three or more users. FreshBooks focuses on being user-friendly and lacks some of the more sophisticated features included in Xero, such as inventory and fixed assets. The difficulty in using Xero compared to FreshBooks is compounded by a lack of customer service. QuickBooks Online is an industry standard for small-business accounting and delivers on its robust feature set, ease of sharing with accountants and range of integrations.

Still, if the pricing is unsuitable, it could be a barrier to getting on a plan. Like most accounting programs, FreshBooks’ expense tracking automatically syncs expenses to your FreshBooks account and helps categorize expenses by tax category. Xero is a strange outlier in that it doesn’t include basic expense tracking with every plan—instead, expense tracking only comes with Xero’s priciest plan, which starts at $62 a month. Plus, guide to taxes on dividends while Xero has thorough invoicing and receipt scanning capabilities, it doesn’t include business expense tracking with any plan except the most expensive. In our opinion, that’s a fairly glaring oversight—expense tracking is an incredibly common accounting feature that almost all of Xero’s key competitors include in their base plans. Starting at just $13 a month, Xero’s basic plan is one of the most affordable out there.

With Easy Switch, our specialists will handle the heavy lifting, moving all your important info (like expenses, invoices, and client details) from Xero to FreshBooks. Promotional offers for both monthly and yearly plans are for a limited period. No free trial period is included when availing this promotional discount. We especially like that FreshBooks includes in-house payment software that removes the friction of getting paid from invoices.

It certainly beats QuickBooks Online’s starting price ($30 a month) by a mile. Our evaluation was based on a rubric scoring methodology in six categories, each with a designated appropriate percentage. On the other hand, A/P management is one of the strongest points of Xero. https://www.intuit-payroll.org/ It showcases basic and advanced features like recording vendor credits and independent contractor billings. As a complete accounting software, we’re not surprised to see these features on Xero because they covered everything from vendor creation to billings management.

Its free plan allows for unlimited invoice creation and covers all basic accounting needs, making it a suitable choice for start-ups or small businesses on a budget. Look for more than just a bookkeeping solution; accounting software should include more detail and let you generate invoices and detailed reports. Xero and QuickBooks are both great accounting software options for small businesses. They both offer a wide range of features, an easy-to-use interface and competitive pricing. The Lite plan offers the essentials and is best for people who only have a couple of clients and do not have a business model that focuses on attaining more.

Number of users aside, Xero is a better fit for small businesses with multiple employees, whereas FreshBooks is more ideal for freelancers and independent contractors. 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. Entry-level plan limits bills and invoices to five and 20 per month, respectively.

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. If you didn’t receive an email don’t forgot to check your spam folder, otherwise contact support. As previously mentioned, FreshBooks treats bills as if they were an expense. To get the best possible experience please use the latest version of Chrome, Firefox, Safari, or Microsoft Edge to view this website.