Though the service also has an aged receivables report, it can’t be customized and you can’t sort or filter by customer. Once you’ve sent invoices, it’s important to stay on top of collecting on them. FreshBooks and Xero give you several ways to monitor your aged receivables balances.
- There’s a reason FreshBooks made it on Zapier’s list of the best self-employed accounting software, while Xero made it on the list of the best accounting software for bigger businesses.
- Our partners cannot pay us to guarantee favorable reviews of their products or services.
- You’ll find both FreshBooks and Xero useful if you’re a service-based business that works on projects or bills clients by the hour.
- Blockberger worked in a bank’s data processing center, and has sold and installed accounting software to clients, while also providing consultation to those wanting to learn more.
- Both made our list of the top invoicing software, however, so you really can’t go wrong with either.
- Xero’s app includes the basics, like sending invoices and assigning expenses, but its capabilities are a bit limited.
While you do get two of the most important reports for keeping a small business afloat, accounts aging and expense reports, they can’t be customized. It’s easier to setup time-saving functions, late payment reminders are individualized and it includes hourly billing. To get the same feature in Xero, you’ll need a third-party app. When setting up a new account, you can upload existing inventory spreadsheets, including SKUs and quantities on hand. Once an items is sold, pick from its inventory on the invoice’s drop-down menu. Mobile apps are evaluated based on their ability to perform certain tasks like invoicing, online payment processing, and expense receipt capture.
Best for Accounting Features: Xero
FreshBooks is an accounting software program geared toward small businesses and independent contractors. In addition to standard double-entry accounting and report functions, FreshBooks specializes in generating invoices. The ability to get paid on the go by converting an estimate and/or billable hours into an invoice makes FreshBooks a particularly appealing option for service-based businesses. 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.
That said, if your business doesn’t need to track inventory or fixed assets, but does want to manage projects, we suggest going with FreshBooks. If it’s a project for which you’re billing time, FreshBooks has time tracking in its software and app. You can even assign different hourly rates for different employees. Xero is a more popular name in this industry, and it’s the better choice if you deal with inventory.
You can sign up and pay for a separate app, but you can’t book a journal entry like you can with QuickBooks Online because FreshBooks isn’t a double-entry accounting system. You can read more about how the two compare in our FreshBooks vs. QuickBooks Online piece. Bills in Xero can be paid by check or bill.com, neither of which is as convenient as paying from a bank account or credit card in the software. FreshBooks doesn’t include robust inventory management in its product suite. If you want to know more about the individual programs, we recommend that you check out our FreshBooks review and Xero review.
During sales, you get 50% off for the first 3 months after which normal rates apply for each plan. TurboTax is owned by Intuit, the company that created QuickBooks—which means the software syncs with QuickBooks, but not with Xero, FreshBooks, or most other players in the game. And if you’re on the fence, you should definitely give both of them a whirl as they both offer a 30-day free trial, so you can get a hands-on feel of both before committing to one. Xero has a somewhat similar pricing structure to FreshBooks, with three tiers of pricing starting at $20/month.
95% of users agree that FreshBooks makes it easy to work with your accountant. 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. Integrates with more than 100 third-party apps; limited social media choices for direct payroll and point-of-sale integrations. The biggest benefit of cloud-based apps is that you don’t need to install a desktop version of the software. Hubdoc is included with all Xero plans, allowing you to capture, extract and store data from documents scanned using your smartphone.
- Xero offers a choice of three subscription plans, which range from $15 to $78 per month.
- On the downside, it can be expensive compared to other options like FreshBooks and Xero.
- The monthly fee of $50 a month covers that, plus all the features available at cheaper price points.
- We especially like that FreshBooks includes in-house payment software that removes the friction of getting paid from invoices.
- We’re committed to making accurate verdicts at Tech.co, so when comparing accounting software our research team measures a number of metrics including ease of use, advanced features, and support tools.
Additionally, as with FreshBooks, Xero includes a Gusto integration ― however, this integration doesn’t incur extra fees. Across the board, we found Xero’s built-in integrations ― and roughly 100 additional integrations ― to be approachable and powerful. With FreshBooks you can send unlimited invoices to up to 5 clients and still pay a fraction of that.
And we do more than just invoicing and payments – we have award-winning support, are twice as easy to use, and cost half the price. Over the years, Xero built a very robust—and complex—accounting software. When reviewing a product, users are asked to assess the product’s overall quality, which includes assigning specific ratings for ease of use, value for money, customer support, and functionality.
From Xero to Hero: 95% Of Small Businesses Say FreshBooks Is Easier to Use
That said, we have to conclude that FreshBooks is generally a better choice than Xero. It’s simpler and more intuitive to perform basic functions, such as setting up a recurring bill. Its pricing makes more sense than Xero’s and it gives you more options for customer support. FreshBooks scatters hints and tips for new users throughout its platform, along with links to “help” articles relevant to the screen you’re on. While that gives you more choices as far as fees go, it’s less convenient for you and your customers.
Integrations: FreshBooks vs. Xero
FreshBooks integrates with a number of payment processors so that you can choose the payment method that works best for you and your business (and can deal with multiple currencies). Whether you want to accept online credit card payments, set up bank transfers, or get paid through FreshBooks Payments, you can easily set up the method you prefer. You can also set up different payment methods for different clients, depending on what suits them best. Both FreshBooks and Xero have a hearty number of apps you can integrate for further functionality. Xero offers built-in integrations for superior connections, including Shopify, Hubdoc, Stripe and HubSpot. You can also browse the Xero App Store to connect to over 1,000 third-party apps.
Xero vs. FreshBooks: Key basic plan features
You can also snap and store pictures of receipts in the FreshBooks mobile app (touched upon later). FreshBooks enables you to connect your self-employed bank account to the tool so it will be updated with your most recent spending and thus, your business is always automatically up-to-date. You don’t have to manually track your expenses on spreadsheets.
Inventory management
Check out our other picks for the year’s best small-business accounting software. With plans starting at $15 a month, FreshBooks is well-suited for freelancers, solopreneurs, and small-business owners alike. While FreshBooks lets you send an unlimited amount of invoices each month, it restricts the number of clients you can invoice per plan. And Xero doesn’t limit your billable clients, but it does limit you to sending just 20 invoices a month with the cheapest plan. Nevertheless, both are similarly priced and have three different plans to choose from. Both are user-friendly and may work well for your business — and the answer to FreshBooks vs Xero really comes down to what you’re looking for.
In reality, it’s almost impossible to run a business on the lower plans. After booking an invoice, FreshBooks asks if you want to send automatic payment reminders. This takes the burden of remembering to follow up off your shoulders. You can set the follow-up times and customize them by customer, too. If someone says they don’t want to be bothered until they’re 30 days past due, you can change their settings without affecting other customers. To save time, FreshBooks puts “make recurring” on the screen after you hit “save” on an invoice.
All Xero plans come with accountant access, but FreshBooks’ least expensive option does not. Working with an accountant is beneficial, regardless of your business’s size, because they can help ensure you’re interpreting your financial data correctly and provide assistance come tax season. In the same vein, FreshBooks does not provide audit trails for accountants.