Xero vs FreshBooks: Accounting Software Review

However, it is worth remembering that Xero’s plan prices are higher than FreshBooks’, and that its more advanced features come at a cost. Software that operates in the same category and industry is often very similar. However, in the case of FreshBooks and Xero, this is not necessarily the case. While both platforms cover essential accounting operations and offer modern features like reporting and BI analysis, each caters for different business needs. FreshBooks’ small business reporting tools allow users to know exactly how their business is performing. Using straightforward dashboards and reports, companies benefit from accurate and valuable information.

1. Once you’re done with a project, you can convert it into an invoice easily.
2. This site does not include all software companies or all available software companies offers.
3. NerdWallet independently reviews accounting software products before determining our top picks.
4. EOQ uses a formula to determine the most advantageous amount of stock for a business to order.
5. 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.

FreshBooks vs Xero: Pricing

In the battle of FreshBooks vs. Xero, we don’t think one is the ultimate winner. 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.

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Get a snapshot of your overall revenues so that you can properly report your business income. It categorizes expenses so you can run reports and get totals for your deductions. All this data is at your fingertips so that you can share it with your accountant. The higher-tiered plans do offer accountant access, making it even easier for a business owner to share necessary data with their tax preparer and reduce the chance of errors. Whether you are navigating from entering expenses to collecting payments, the sidebar is intuitive to use and doesn’t get lost in confusing jargon. Additionally, FreshBooks has a user-friendly mobile app that allows you to enter data as you need to while out of the office.

Accounts Payable

For instance, since Xero only includes project tracking with its most expensive plan, it’s a better pick for product-based freelancers and businesses than for service-based business owners. It also lacks multicurrency support for all but its most expensive plan. So if you’re selling products outside of the United States, FreshBooks or Zoho (which do have multicurrency support) will make your life a little easier. This kept our costs comparatively low as we tested the platform at different team sizes. We felt that each tier’s features justified its costs as did the automatically included (but optional) Gusto payroll integration. We’ve encountered few platforms that make it so easy and low-cost to automate your payroll accounting.

Ease of sharing with accountants

Xero’ business model is to get people ‘hooked’ and slowly up the price. Sometimes even charging for things that were already part of the product and calling it an add on feature. That’s why FreshBooks is built to save you time and effort with an interface that lets you efficiently manage your books and navigate tax time. And if you need support, our award-winning team always has your back. Hubdoc is included with all Xero plans, allowing you to capture, extract and store data from documents scanned using your smartphone. 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.

Even though it is a free option, Wave Accounting offers many of the features you need to run your business, including free invoicing, unlimited expenses and receipts. QuickBooks’ customization options are more elaborate than FreshBooks, but are also designed for larger companies and businesses that need more flexibility in their accounting systems. Have the reports that you need at your fingertips all the time with FreshBooks. In the Reports tab, you can access popular business accounting reports such as profit and loss, sales tax summary, aging accounts, invoice details and expense reports. Looking at these reports helps a business owner better understand their company’s financial health and is critical in the daily management of the organization. Global digital transformation has redefined the day-to-day operations of accountants as they increasingly transition to data-driven cloud accounting platforms.

Meanwhile, FreshBooks is perfect for freelancers and small businesses that want simplicity without sacrificing functionality. You don’t have time to spend figuring out how to use complicated accounting software. With FreshBooks, you’ll confidently create invoices, input expenses, and do your bookkeeping in half the time.

Whether you use the desktop software or the mobile app, you can detail expenses, send invoices and run reports. When it comes to features and capabilities, FreshBooks offers the commonly required features that all accounting software does. What sets it apart from the competition isn’t any one unique feature, but its simplicity. Accounting can be confusing and overwhelming for business owners who aren’t trained accountants. FreshBooks streamlines the dashboard, which makes it easy to toggle between certain functions and reports. We also recommend Xero for businesses that prioritize financial reporting tools in their accounting software.

All our plans are equipped with invoicing, expense, and project management features at no extra cost. 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.

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. Can support larger small businesses with dozens of employees; all three plans include an unlimited number of users. That said, Xero makes up for its user-friendliness shortcomings through tutorial videos and a demo company feature.

Accounting software adapts to these changes seamlessly, accommodating the evolving needs of the business. This scalability ensures that the software remains a valuable asset as the business changes. Navigating the small business accounting software https://www.simple-accounting.org/ offerings available today can feel like venturing into a maze – but don’t worry, you’re about to get a map. Accounting software options serve as the backbone of a small business, helping you manage every cent that comes in or goes out.

FreshBooks is a super-easy-to-use accounting software built specifically for small business owners, letting you easily do everything yourself. However, when it comes to using all the tools available to you as a small business owner, your accountant should definitely be part of your toolbox. The safety of your private data is our top priority, that’s why it’s protected by 256-bit SSL encryption—the gold standard sales revenue definition in internet security. You can even connect your bank accounts for automatic bank reconciliation trusting your data will always be private and secure. FreshBooks is a cloud accounting solution that uses industry-leading secure servers. You can import expenses from our expense tracker by uploading a CSV file as well as having FreshBooks automatically track them by connecting your bank accounts or credit cards.

Both FreshBooks and Xero have 14 out of 16 reports that we expect to see in an accounting software service. However, some of FreshBooks’ reports seem to lack expanded functionality. For example, the balance sheet of FreshBooks only shows the parent accounts and omits important details like subaccounts. However, missing features like purchase orders (POs) and https://www.quick-bookkeeping.net/labor-efficiency-variance-formula-cause/ vendor credits are forgivable for FreshBooks since it didn’t include inventory management as a feature. Therefore, we see a situational approach here wherein we see FreshBooks and Xero’s A/P management as the best in their respective fields. The only way to assign expenses to the appropriate checking account is by matching transactions in the bank feed.