8 Best Competitors and Alternatives to Xero in 2021 (Free & Paid)

Xero is robust cloud-based accounting software with sophisticated features that can scale to your business. It also has an intuitive user interface and an affordable subscription cost. However, it does have its limitations, such as the fact that it is single-entity accounting software and can’t track expenses by class or location. We evaluated Xero’s competitors and came up with a few to consider, including a couple of free alternatives.

Read our Xero review for a more in-depth examination of its features and pricing.

Best Xero Competitors

• QuickBooks Online: Best overall alternative to Xero
• FreshBooks: Best Xero competitor for professional-looking invoices
• QuickBooks Self-Employed: Best alternative for freelancers and self-employed
• Wave: Best free alternative to Xero
• Zoho Books: Best Xero competitor for Mac users
• Sage 50Cloud: Best alternative for consolidating multiple companies
• Quicken: Best alternative for individuals with rental properties
• Sage 100 Contractor: Best alternative for construction companies

How We Evaluated Xero Competitors

First, we looked at some of the features that Xero is lacking or could be improved upon to evaluate how the alternatives compare.

• Multibusiness accounting: Because Xero can only accommodate single entities, you need to create a separate account for each of your companies, and there is no option to consolidate subsidiary and parent corporations
• Tracking: Xero has limited tracking categories and inventory tracking by location requires a third-party app.
• Customer service: Xero does not have phone and chat support available, which limits contact options especially for urgent requests.

We also evaluated whether these Xero competitors contain the features that you would come to expect with accounting software, and their cost.

• Price: We evaluated the price based on features and users included to determine if the software was a good value.
• Accounts receivable (A/R): You should be able to create invoices, send them to customers, and track them until they are paid easily.
• Accounts payable (A/P): Bills should be entered when received and tracked until paid.
• Reports: Basic reports, such as an income statement and balance sheet, should be available. Better software also can customize reports or access to more advanced reporting.
• Bank account: You should be able to connect your bank account and download transactions to the software automatically.
• Integrations: There should be third-party and direct integrations available, such as for payroll and online payments.
• Mobile app: We looked at whether a mobile app is available, and whether it has any useful features like GPS mileage tracking.

QuickBooks Online: Best Overall Xero Alternative

We selected QuickBooks Online as the best overall Xero alternative because it offers many of the same features and has a robust mobile app, just like Xero. They also both offer multiple plans and scale well in terms of depth of functionality. QuickBooks Online also can track activity by class and location, and it has more advanced A/R capabilities than Xero. We also ranked QuickBooks Online as the best small business accounting software.

For more information about the key differences between Xero and QuickBooks, check out our article on this topic.

Our Expert Opinion

With QuickBooks Online you must upgrade to the most expensive Advanced plan if you have more than five users. In comparison, Xero includes an unlimited number of users with any subscription. However, QuickBooks has several features that Xero lacks, such as the ability to track activity by class and location and to create sales orders.

FreshBooks: Best Xero Competitor for Professional-looking Invoices

FreshBooks is an ideal choice for freelancers and service providers because of its powerful time tracking and invoicing tools. The software allows you to easily track billable hours and add them to great-looking invoices, and then track the invoice’s status until paid. With its intuitive and uncluttered user interface, FreshBooks is also easier to use than Xero. Its mobile app has a built-in mileage tracker, which makes it easy to add these expenses to client invoices. However, FreshBooks cannot track and manage inventory, a feature where Xero excels.

For a complete comparison with Xero, read FreshBooks vs Xero.

Our Expert Opinion

While FreshBooks combines time tracking, project management, and accounting to accommodate the needs of freelancers and service providers, Xero focuses more on the complex areas of financial accounting and reporting. This is important to keep in mind if you have specific needs, such as tracking inventory or preparing sales taxes, as they are features that FreshBooks lacks.

QuickBooks Self-Employed: Best Alternative for Freelancers and Self-employed

QuickBooks Self-Employed is a cloud-based accounting system that is designed for freelancers and self-employed. Unlike Xero, QuickBooks Self-Employed is a single-entry accounting system which means that you’re not tracking assets and liabilities and won’t be able to generate a balance sheet for your business. Therefore, you won’t have access to the type of complex reports that you would with Xero. It is also not possible to upgrade to a double-entry accounting system, such as QuickBooks Online. But with all of these considerations, QuickBooks Self-Employed has many attractive features, such as the ability to pay estimated quarterly taxes and to track expenses and mileage automatically with the robust mobile app.

Our Expert Opinion

If you’re a freelancer or sole proprietor with basic accounting needs, then QuickBooks Self-Employed is a great option. However, it does have its limitations, such as the inability to enter unpaid bills and track assets. But one of its most attractive features is the ability to track your quarterly estimated income tax payments. You also have access to QuickBooks Self-Employed’s mobile app which has a built-in GPS tracker as compared to Xero, which only lets you enter the start and end addresses to determine the mileage. QuickBooks Self-Employed also tracks your estimated quarterly taxes, simplifying the payment process. This is not a feature that is currently available with Xero.

Wave: Best Free Alternative to Xero

Wave accounting software is absolutely free, which makes it an attractive option for businesses on a tight budget. It also allows for multiple businesses under the same account, a feature that Xero lacks. Wave also supports multicurrency transactions and unlimited users and transactions. Because of these capabilities, we ranked Wave as the best overall free accounting software. However, unlike Xero, you are not able to track inventory or time, and there is no link to export your information to tax software. Read our Xero vs. Wave article for a more in-depth discussion of the key differences between the software.

Our Expert Opinion

While Wave may not offer as extensive a feature set as Xero, it has many attractive features, such as unlimited invoices and estimates, with every plan. Wave is best if you are a very small business with basic needs like tracking income and expenses. Another great use for Wave is to catch up on prior-year accounting, in which case you’re not as interested in using advanced features to manage your business.

Zoho Books: Best Xero Competitor for Mac Users

Zoho Books is cloud-based accounting software that is included in the Zoho suite, along with Zoho CRM, Zoho Inventory, and Zoho Projects. As compared to Xero which does not have a similar option, Zoho Books offers a free plan for businesses that generate less than $50,000 in annual revenue. We selected Zoho Books as the best accounting software for Macs, and for a good reason. Unlike Xero, the software has been optimized for iOS users and allows you to send invoices, estimates, and account statements to customers within an iMessage, and there is an app for the Apple Watch. Read Zoho Books vs Xero for a detailed comparison.

Our Expert Opinion

One of the most attractive features of Zoho Books is that it offers live and unlimited customer support, as compared to Xero which does not have phone or chat support available. Even its paid plans are an affordable monthly fee, but there are limited third-party integrations available, and no integrated payroll option. However, because of its features that have been optimized for Mac users, it is worth considering especially if you don’t have employees or want a more affordable plan than Xero.

Sage 50Cloud: Best Alternative for Consolidating Multiple Companies

Sage 50Cloud is desktop accounting software that offers limited remote data access through Sage Drive. One of the largest distinctions between Sage 50Cloud and Xero is its ability to support multiple companies with the Premium Accounting plan, which allows you to set up, manage, and consolidate an unlimited number of companies. Like Xero, it has strong inventory management and job costing capabilities, but it lacks a mobile app for users on the go. It is also only available for Windows devices.

Our Expert Opinion

Sage 50Cloud has solid features and is very customizable, and although it lacks such features as a mobile app which Xero does have, its strong inventory management capability and powerful reporting tools make this an attractive option for users that prefer desktop software. Unlike Xero, it also can to support multiple companies.

Quicken: Best Alternative for Individuals With Rental Properties

Unlike the other entries on this list, Quicken is personal finance management software that allows you to create a budget, track personal expenses, and manage investments. The Home & Business version is well-suited for rental property owners because it allows them to keep track of tenants, rental rates, and lease terms. However, if you have a large number of rental properties, you might want to look into software that allows for automation and advanced functionality. Quicken differs from Xero in that it is not a double-entry accounting system and, therefore, cannot track assets and liabilities or generate a balance sheet.

Our Expert Opinion

Quicken differs from Xero in that there are multiple customer support options, such as phone or chat. But because it is only available as a download for your computer, it is not as accessible as Xero. It does have a bank feed integration and a bill management solution via Quick Pay for digital bills and Check Pay for physical checks. If you’re a landlord looking to manage a few units, Quicken Home & Business is an affordable option.

Sage 100 Contractor: Best Alternative for Construction Companies

Sage 100 Contractor is an accounting and enterprise resource planning (ERP) software that is ideal for small and mid-size contractors. We included it in our list of best construction accounting software because you can use it to perform tasks such as accounting, estimating, scheduling, and service management. Sage 100 Contractor is best suited for construction companies that are seeking a single solution to handle all of their business needs. Unlike Xero, it has strong project management features. However, it has a few drawbacks such as the lack of a mobile app and no client portal.

Our Expert Opinion

Because of its basic ERP features like data analysis, automation, job orders, and inventory management, Sage 100 Contractor is a better option than Xero for contractors seeking an affordable solution. However, if you have teams that work in the field, it might not be the best option since it doesn’t track employee locations. Unlike Xero, it lacks a mobile app, which prevents the ability to access data while on the road. Sage 100 Contractor is also much stronger than Xero with its project management capabilities.

Bottom Line

While Xero is an excellent accounting software package with its advanced feature set, such as sophisticated invoicing and unlimited users available on all plans, there are many other options to consider. Based on your budget, the intricacies of your industry, and specific features desired, you may want to consider other accounting software that could be a better fit for your business.