While Xero remains one of the best accounting software options for small business, there are plenty of Xero competitors that might be a better fit for you, whether you need a more affordable or easier-to-use solution. We look at some of the big names in accounting and bookkeeping to help you find the best choice.
Top 4 Competitors to Xero
|QuickBooks Online||(Best Overall) Small businesses that need a complete accounting solution that’s affordable|
|FreshBooks||Micro- and small businesses that require an easy to use, flexible platform|
|Wave||Budget-minded businesses that need the most features for free — tax services optional|
|Zoho Books||Business owners who want to integrate lots of other programs with accounting software|
Which Xero Competitor Is Right For You?
How We Evaluated Xero Alternatives
Xero is often seen by small business owners as an alternative to QuickBooks Online. But when Xero isn’t a good fit, companies it’s often because they’re looking for accounting software that’s more affordable or will pair well with other business software they’re already using, such as CRM and project management software. Many of these alternatives to Xero offer similar or better features, are easier to use or customize and don’t put limits on what you can do.
We reached our conclusion regarding the best Xero competitors by considering these criteria:
- Price: The cost-to-feature set ratio is comparable to or more affordable than Xero
- Ease of use: Onboarding and ongoing use of the features of the accounting software is simple or includes good training
- Multi-user access: Accounting software should allow you to add users to the program, such as an accountant, for reviewing your financial information
- Accounts receivable: You should be able to track outstanding invoices for your customers
- Accounts payable: The accounting software should allow you to track vendor payments
- Reporting: Basic reports should be included in each accounting app, including cash flow statements, profit & loss and balance sheets
- Invoicing: You should be able to create and send invoices from your accounting software
- Integration: Xero competitors should offer multiple proprietary or third-party add-ons to help round out your accounting solution
When you look at how robust Xero accounting software is and the extras that are included at no added cost, it’s easy to see why so many small businesses choose it. However, if you’re looking for a cleaner user interface (UI), more affordable accounting software or better training and documentation, you may want to look elsewhere.
Best Overall Xero Competitor: QuickBooks Online
QuickBooks Online offers a similar feature set to Xero but, as accounting software, it manages to pull ahead of Xero thanks to unlimited features like invoicing. It’s also one of the oldest names in accounting software, which means you’re going to get the benefit of lots of documentation and training tools. As the most popular accounting software available, QuickBooks Online is known by many, which means when you hire someone new or invite your accountant or financial advisor to look at your business’ finances, he or she is likely to be familiar with the platform. In fact, often the hardest choice a business owner will have to make about QuickBooks is between QB Desktop vs QB Online.
QuickBooks Online Pricing
The three plans offered by QuickBooks Online range in price from $20 to $60, which is comparable to Xero, especially when you consider some ancillary yet useful features that QuickBooks Online offers that Xero doesn’t. The low-priced tiers of both offer basic accounting features, such as tracking expenses and reporting, but QuickBooks Online doesn’t limit the number of invoices you can create and send.
QuickBooks Online Tiered Features
|Integration with Apps|
Pricing: QuickBooks Online vs. Xero
|QuickBooks Simple Start|
QuickBooks Online Simple Start
The entry-level plan for QuickBooks Online offers enough functionality for solopreneurs and microbusinesses that need to keep an eye on their finances. You can track expenses and income, create invoices and accept payments and run basic reports to get a visual glance of your business’ financial health. The $20 monthly fee also gives you the ability to take photos of receipts and attach them to transactions.
QuickBooks Online Essentials
QuickBooks Online Essentials is the mid-level pricing plan that costs $35 per month and nets you all the features in the Simple Start plan, plus a handful of other helpful features. This plan gives you accounts payable features, so you can manage and pay bills and create and print checks. This plan also lets you add up to three other users, and you can track billable hours.
QuickBooks Online Plus
The most expensive plan from QuickBooks Online is the same as Xero’s high-tier plan. However, Xero Established plan gives you more multi-user access and includes access to custom reports. The Plus plan lets you track inventory and manage projects. You also get a feature that lets you manage, prepare and file 1099s for contractors.
What QuickBooks Online Is Missing
The most noticeable feature that QuickBooks Online is lacking is payroll as a standard feature. However, you can easily add payroll to any of QuickBooks Online’s plans for and additional cost of $35 per month plus $4 per employee.
What Users Think About QuickBooks Online
Many of the user reviews cite QuickBooks Online as a nearly complete accounting system that’s useful for any small business. It allows you to manage various aspects of the finances of your business, from what you owe others and what’s owed to you to tracking expenses, billable hours and organizing receipts. There’s some question about functionality and bugs, such as having to refresh every time something changes in the platform to get a real-time view, however.
Who Is QuickBooks Online for?
QuickBooks Online is the best accounting solution for small business owners who want a comprehensive view of their finances. It offers more features than Xero for managing inventory, sales, bills, cash flow and billable hours. It’s a robust accounting program that requires you to put in some time to learn it, but that’s why we have this QuickBooks Online training course to help you get all you can out of it.
Best Xero Competitor for Ease of Use: FreshBooks
FreshBooks is for small business owners and solopreneurs who want an easy-to-use platform that helps with almost every aspect of the daily accounting process. The focus of this Xero alternative is expense tracking, invoicing, and time tracking. Although FreshBooks is lacking a few accounting basics that Xero has, there are plenty of integration options, and you can’t get an easier-to-use software than this.
FreshBooks kicks off its offerings at $15 for its Lite plan and ramps up to $50 for the Premium plan. All the plans from FreshBooks come with customized invoices, ability to accept payments and a fantastic time-tracking feature. Xero limits the number of invoices and quotes you can create in its lowest-tier plan, but FreshBooks only limits the client count. Plus, as you move up FreshBooks’ pricing ladder, it becomes more affordable than Xero.
FreshBooks Tiered Features
Pricing: FreshBooks vs. Xero
At $15, FreshBooks Lite is a great accounting solution for a freelancer or solopreneur who needs to track everything from billable hours to expenses to invoices. The reporting feature can give you an overview of your finances, which helps you see how your small business is doing. For more functionality, consider add-ons or moving up a level to the Plus plan.
FreshBooks Plus costs $25, which is $10 less than Xero at a similar level. You’ll get the ability to set up automatic payment reminders, charge late fees when invoices are overdue and schedule recurring invoices, which frees your time up for the actual work you need to do.
At the top of the pricing tier is FreshBooks Premium, which will set you back $50 per month, $10 less than Xero. All this level gives you extra is the ability to manage projects and invoices for up to 500 clients.
FreshBooks Select has customized pricing and is ideal for users who have more than 500 clients or bill over $150,000/year. This plan is not different from a feature perspective – the benefit of it is lower payment processing fees (which is why it’s better for high volume clients) and white glove customer support.
What FreshBooks Is Missing
Although FreshBooks is feature-rich and easy for anyone to use, it’s obviously missing accounts payable. Unlike QuickBooks, Freshbooks doesn’t offer a way to track inventory, so if you sell products, you might need to find a suitable app to integrate with this software.
What Users Think About FreshBooks
Hands down, users who have reviewed FreshBooks love how simple it is to navigate the clean interface, create invoices and track expenses and billable hours. Some say it’s less accounting software and more invoicing software. However, for a single user, it’s an ideal product.
Who Is FreshBooks for?
Even with the lack of accounting basics, FreshBooks makes it easy for those running a super-small operation to track hours, expenses, bill clients and run helpful reports to keep their fingers on their business’ financial pulse. Integrate some third-party apps for bill management and payroll to your FreshBooks plan, and you’ll get something akin to Xero, but with more business management features built-in.
Best Xero Competitor for Affordability: Wave
What’s better than free accounting software? Free accounting software that offers nearly every feature you need to track the finances of a small business or multiple businesses like Wave. It’s split into three types of apps: Accounting, Invoicing and Receipt Scanning, but they’re all free and work seamlessly together. The features included with Wave’s software are comparable to Xero, and some of the functionality, such as its mobile app, is better.
Yes, Wave really is free. In fact, there’s only one tier for Wave, and you won’t see any surprise fees after you create your free account. Additionally, you’ll be getting features not typically found even on some paid plans, such as unlimited users and support for unlimited businesses. Add-on payroll and tax services are available from Wave for $20 per month for self-service states and $35 per month for states where taxes can be handled by a third-party company.
Wave vs. Xero: Tiered Features & Pricing
|Automatically Recorded Receipts|
Pricing: Wave vs. Xero
From double-entry accounting to unlimited invoicing, Wave stands tall next to the big names of accounting software at zero monthly cost to you. You’ll get the reporting features you need to stay on top of your small business’ finances, you can accept payments in any currency, and you can handle reconciliations easily. It’s important to note that Wave acts as your payment processor for online purchases, and the rates — 2.9 percent plus 30 cents per transaction — are higher than most others.
The only monthly paid service Wave offers is its payroll add-on. It’ll handle the taxes for your employees if you live in a state where it’s allowed for $35 per month plus $4 per employee. In self-service states where you are required to file the tax paperwork yourself, you’ll pay $20 per month plus $4 per employee, but Wave will handle the calculations for you.
What Wave Is Missing
When you compare Wave’s feature set to the more robust accounting services, like Xero, it’s clear that there are some things missing. Most notably, Wave’s servers aren’t always stable, and customer support seems to be lacking. Email support is available for those with the free software, but live chat support is only available to those who use the paid payroll services. This is why many small business owners will choose QuickBooks vs Wave if they aren’t using Xero.
What Users Think About Wave
Overall, user reviews are positive for Wave. Although Wave is a powerful accounting solution for small businesses, there’s still a bit of manual data entry you’ll have to do. Users largely agree that Wave is easy to learn and use, and its value is unsurpassed.
Who Is Wave for?
Freelancers and small business owners can save a fistful of dollars by using Wave over Xero or any other of the paid accounting software. It’s an excellent — if simple — solution for those who want to track expenses, scan receipts, send invoices and accept payments online.
Best Xero Competitor for Integration: Zoho Books
Zoho Books is one of the best Xero competitors for small business owners who are looking for a way to create an all-in-one solution for accounting, project management, inventory management and time tracking. If there isn’t a feature built into Zoho Books, chances are there’s a Zoho app for it, such as Zoho CRM for managing your customer relationships and Zoho Desk for customer support. Plus, Zoho Books works well with third-party app integrations like Zapier and Slack.
Zoho Books Pricing
Zoho Books starts its pricing at $9 for the low-tier plan, which is exactly the same price as Xero. The monthly cost goes up from there to $25 and $50 for the other two plans, which are more affordable than Xero. Some of the core features of all Zoho Books’ plans include invoicing, banking, expense tracking and project management while Xero doesn’t offer project management in its core offerings.
Zoho Books Tiered Features
Pricing: Zoho Books vs. Xero
|Zoho Books Lite|
|Zoho Books Plus|
|Zoho Books Premium|
Zoho Books Basic
Just as the title states, Zoho Books Basic offers you the basics of accounting, and it’s the same price as Xero. The difference is that in addition to time and expense tracking, reports and invoices, you also get multicurrency functionality, project management and the ability to integrate with the Zoho suite of apps.
Zoho Books Standard
For $25, Zoho Books Standard allows you to add up to 500 contacts to the app, three users for the software, bill management and the ability to print checks. It’s also at this level that you can set up recurring payments for vendors.
Zoho Books Professional
Zoho Books Professional is the top tier for this accounting software and costs $50 per month. Contacts are unlimited, and you get all the accounting features Zoho Books offers, inventory management and sales and purchase orders.
What Zoho Books Is Missing
Although it seems Zoho Books is a complete accounting solution for small businesses, it is lacking one of the most important features for most businesses: built-in payroll. You have two options when it comes to payroll integrations, so it’s still a viable choice for your small business.
What Users Think About Zoho Books
Zoho Books gets good marks in user reviews for being an easy-to-use program that is an ideal solution if you also use other Zoho products. It doesn’t offer as many integrations as other accounting software, but that may be because Zoho is still a smaller player. Still, customers who like Zoho Books are happiest with the responsive customer service, features like invoicing and reporting and that the product is always being improved.
Who Is Zoho Books for?
Zoho Books is an excellent standalone accounting software solution, but when you pair it with other Zoho products, it becomes even more powerful for small business owners. By itself, it can help you track expenses, clients, take care of billing and invoicing and reconcile your accounts. It’s also more affordable than Xero by $5 to $10 per month on the high-tier plans, which can add up.
The Bottom Line
While Xero is a great accounting software solution for many small business owners, there are many alternatives that are better equipped to handle your business’ financial affairs that are easier to use, more robust, and more affordable. The standout Xero competitor is QuickBooks Online. You get more features with each plan QuickBooks Online offers, and you have the option of adding on payroll services, rather than paying for something you don’t need. Plus, for a limited time only, you can get 50% off a paid subscription for QuickBooks Online. Get started today and find out for yourself if it truly is the best overall Xero alternative.