Xero vs Quickbooks vs Freshbooks: Best Software for Your Business

They are both strong options for freelancers and small teams. There are a couple of obvious differences, though, that may make this decision easier. Inviting clients into your virtual workroom keeps them in the loop, and makes communication more efficient. The first four QuickBooks Online plans are designed for businesses with employees.

• If you’re running a small business with simple finances, you might be able to handle it all on your own with Xero.
• While small businesses can use the software as well, the extra charge per team member could add up quickly.
• There weren’t tips guiding me through the process of adding clients and invoices or creating reports.
• However, accounting and bookkeeping is also a vital part of running a business if you want to abide by the law and track your finances.

You can accept credit cards, e-checks, and even bank transfers. Xero is one of the most complex accounting software options on the market. It’s designed for power users who need all the accounting software features.

What is the difference between Xero and FreshBooks?

Wave Accounting is free, but it doesn’t skimp on invoicing capabilities, making it a good solution for very small service-based businesses and consultants. However, due to its limited feature set and lack of audit trails and third-party integrations, it’s not ideal for small businesses that have the potential to grow. Xero only offers time tracking in its Established plan as part of the Expenses and Projects feature sets. FreshBooks doesn’t offer bank reconciliation with its least expensive option, FreshBooks Lite.

• It is difficult to migrate between the two, so it would be best to choose one and stick with it long-term.
• At $60 a month, you receive the same basic features as the Simple Start and Essentials plans with a few key differences.
• All in all, for the features you’re getting I’d say that QuickBooks does the best it can.
• But you can’t go from Self-Employed to a Small Business Plan.
• Noon can handle all of your bookkeeping in one place so that you can focus on running and growing your unique business knowing that we’ve got your finances handled.

Otherwise, you’ll need to upgrade to a heftier FreshBooks plan or consider invoicing software that doesn’t curtail the number of people you can charge each month. In stark contrast to FreshBooks, it also uses the double-entry accounting system for every plan, even the most basic. If you’re not sure what double-entry is, don’t worry too much.

If you think that Xero is exactly what you need to manage your financial details, you may want to check out the following available plans. Keep reading to find out the hits and misses with some of the most popular accounting software for freelancers. Katherine Haan, MBA is a former financial advisor-turned-writer and business coach. For over a decade, she’s helped small business owners make money online.

Xero Review: Features, Pricing & Alternatives

Xero also has robust file storage that lets you manage and share documents, bills, contracts and receipts on the cloud. Speaking of the cloud, both software earned a spot on our best cloud accounting software list. As two of QuickBooks Online’s biggest competitors in the small-business accounting software space, Xero and FreshBooks each have their own strengths.

FreshBooks vs. QuickBooks vs. Xero: What Are They?

QuickBooks is available both online and via desktop and is ideal for businesses that outsource their accounting tasks to a bookkeeper or accountant. This is because QuickBooks only allows up to 40 users for its highest-tiered plan, and even then, some plans require every user to pay for their own account. Xero is ideal for businesses that keep a team of salaries expense on balance sheet bookkeepers or accountants in-house. FreshBooks started out as invoicing software for small-business owners who wanted to bill clients quickly and efficiently. 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.

In need of professional bookkeeping services?

While the user is typically asked for more information or referred to an email address to continue the conversation, it’s once again good to see that QuickBooks are paying attention in this way. Other than that, the most common complaint is that FreshBooks doesn’t support dual-entry accounting. That in itself isn’t a massive issue (or even necessary at all), but it does mean that balancing your books is a little more difficult. In my experience there wasn’t anything wrong with the support team’s ability or speed, it’s just that I found the others to have a little more personality. Like it or not, that kind of thing can make the difference between a good support experience and one that’s rather forgettable.

Features

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. Another minor drawback with Xero would be the inability to enter the ending balance of the checking account in the bank statement.

FreshBooks is more intuitive, especially for freelancers

This feature is designed to automate the process of creating and sending invoices. For many businesses, these two features are the most important when it comes to accounting software. These plans differ based on the features you’ll need access to and the number of users you want to give access to your account. In general, the smaller your operation and the fewer employees you have, the cheaper the plan you’ll want to get. Expenses are also easy to log and track, as FreshBooks can be directly linked to your bank account. Once you’ve identified an expense, you can set FreshBooks to automatically recognize, pull in, and format future expenses from the same vendor.