8 Best Competitors & Alternatives to Xero in 2023 (Free & Paid)
Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.
Eric is a staff writer at Fit Small Business and CPA focusing on accounting content. He spends most of his time researching and studying to give the best answer to everyone.
This article is part of a larger series on Accounting Software.
The best alternatives to Xero are QuickBooks Online and Zoho Books for similarities in features and functionality. Other Xero competitors include Sage 50cloud for consolidating multiple companies and FreshBooks for simplicity. Here’s the complete list of providers that we believe are worthy Xero alternatives:
- QuickBooks Online: Best overall Xero alternative
- Zoho Books: Best for mobile app accounting
- QuickBooks Desktop Premier: Best desktop software alternative to Xero
- Sage 50cloud Accounting: Best for consolidating multiple companies
- FreshBooks: Best for very small service-based businesses
- Wave: Best free Xero alternative
- QuickBooks Self-Employed*: Best alternative for freelancers who need simple expense tracking
- Quicken*: Best alternative for individuals with a few rental properties
*QuickBooks Self-Employed and Quicken weren’t scored as part of the Fit Small Business (FSB) Case Study because they aren’t double-entry bookkeeping systems. However, they do provide the best solution for certain users.
Comparison of Top Xero Alternatives
Pricing | Users Included | Mobile App Score | Great Invoicing | Solid Inventory Accounting | Good Project Accounting | |
|---|---|---|---|---|---|---|
 | $13 to $70 per month | Unlimited | 2.6 / 5 | ✓ | ✓ | ✓ |
 | $30 to $200 per month | 1 to 25 | 3.5 / 5 | ✓ | ✓ | ✓ |
 | $0 to $275 per month | 1 to 15 | 5.0 / 5 | ✓ | ✓ | ✓ |
 | $799 to $1,999 per year | 1 to 5 | 0.5 / 5 | ✓ | ✓ | ✓ |
 | $57.17 to $389.67 per month | 1 to 10 (Custom prices for 11–40 seats) | 0.5 / 5 | ✓ | ✓ | ✓ |
 | $15 to $55 (custom pricing available) | 1 (Additional $10 per new member) | 3.4 / 5 | ✓ | ✕ | ✓ |
 | Free | Unlimited | 1.8 / 5 | ✓ | ✕ | ✕ |
 | $15 to $35 per month | 1 | Not scored* | ✕ | ✕ | ✕ |
 | $3.99 to $9.99 per month (billed annually) | Unlimited | Not scored* | ✕ | ✕ | ✕ |
*QuickBooks Self-Employed and Quicken weren’t scored as part of the FSB Case Study because they aren’t double-entry bookkeeping systems. However, they do provide the best solution for certain users.
QuickBooks Online: Best Overall Xero Alternative
Overall Score:
4.40 / 5
Pros
- Similar features to Xero
- Ability to track activity by class and location
- Robust mobile app
- Live customer support is available
- More than 130 customizable reports
Cons
- Requires a separate subscription for each company file
- Cannot compare estimated to actual project costs
- Limitations on the number of users
Features
- Vast Network of ProAdvisors: Since QuickBooks is more popular in the United States, most certified public accountants (CPAs) and bookkeepers are knowledgeable of QuickBooks. If you plan to outsource bookkeeping, you’ll have no problem finding a QuickBooks ProAdvisor.
- Manual reconciliation: You can reconcile your checking account without connecting a bank feed or uploading a bank statement
- Inventory management: Set up and track inventory items and calculate the cost of goods sold (COGS).
- Check printing: Print checks through the program instead of writing by hand.
- Income tracking by class: Set up classes and locations for tracking profit and loss (P&L).
Explore our Xero vs QuickBooks comparison to learn more.
Zoho Books: Best for Mobile App Accounting
Overall Score:
4.40 / 5
Pros
- Offers a competitive free plan
- Phone support and live chat included in all paid plans
- Capable mobile app that can perform almost all accounting functions
- Integrates with Zoho Inventory for detailed inventory tracking
Cons
- Cannot manage and track fixed assets
- Limitation on the number of invoices you can send
- Requires subscription to Professional plan to track unpaid bills
- Unable to manage multiple companies
Features
- Invoicing: Zoho Books offers plenty of design options and templates to create unique invoices.
- Bank reconciliation: Reconcile bank accounts by connecting your bank account (live bank feeds) or manually importing bank statements.
- Inventory management: Even without the Zoho Inventory integration, you can track the cost of inventory on hand and allocate that cost between ending inventory and the COGS.
- Mobile app: The unbeatable Zoho Books app contains all the essential features of mobile accounting, including invoicing, online payments, receipt capture, time entry, and reporting.
Check out our Zoho Books vs Xero guide for a detailed comparison of the two software
QuickBooks Desktop Premier: Best Desktop Alternative to Xero
Overall Score:
4.10 / 5
What We Like
- Manage the books for an unlimited number of companies
- Large network of independent QuickBooks ProAdvisors
- Manage inventory and calculate COGS using the average cost method
- Perceived to be safer than cloud-based software
What's Missing
- Very limited mobile app
- Each user requires a separate subscription fee
- Cannot manage and track fixed assets
- Harder to share your books with an external accountant than cloud-based software
Features
- Industry-specific editions: QuickBooks Desktop Premier offers five industry-specific versions for nonprofits, manufacturers and distributors, professional service firms, contractors, and retailers. Each edition has features that cater to your industry’s accounting needs.
- Excellent project accounting: QuickBooks Desktop Premier offers more project accounting features than QuickBooks Online. You can compare budget-to-actual information in QuickBooks Desktop and assign costs to projects which QuickBooks Online can’t do.
- Subscription-based program: QuickBooks Desktop Premier now offers subscriptions instead of licenses. It means that you can get the latest features of QuickBooks Desktop while you are subscribed.
- Inventory tracking: QuickBooks Desktop Premier has more inventory features than QuickBooks Online, especially if you select the retailer edition.
Visit QuickBooks Desktop Premier
Sage 50cloud: Best Alternative for Consolidating Multiple Companies
Overall Score:
3.30 / 5
Pros
- Create consolidated financial statements from multiple company files
- Strong inventory management capability
- Powerful reporting tools
- Payroll integration available
Cons
- Limited integration options
- Only available for Windows machines
- No mobile app
Plans & Pricing
- Multiple companies: Sage 50cloud allows you to manage multiple company files and even create consolidated financial statements.
- Bank reconciliation: Reconcile bank accounts through a bank feed or by manually uploading your files of statements.
- Time tracking: Enter billable hours manually or use its built-in time tracker.
- Job costing: Track the revenue, cost, and profit per job to improve efficiency in using resources with each job.
FreshBooks: Best for Very Small Service-based Businesses
Overall Score:
3.20 / 5
Pros
- Excellent customer service
- All plans include unlimited invoices
- Includes time tracking and team collaboration tools
- Mobile app has GPS mileage tracker
- Client self-service portal available
Pros
- Not able to track activity by class and location
- Only one user is included with each plan—additional users can be added for a fee
- Plans limit the number of billable clients
- Cannot track inventory
Features
- Invoicing: Create and design unlimited customized invoices in all its plans. Invoice customization is FreshBooks’ best feature because it lets you add a logo, change the style and color, and include other elements in invoices.
- Phone support: You can talk to an agent over the phone.
- Time tracking: Track employee time and expenses and quickly add them to customer invoices.
- Job costing: Compare your budget costs to actual time and expenses.
Check out our comparison of FreshBooks vs Xero.
Wave: Best Free Alternative to Xero
Overall Score:
2.60 / 5
Pros
- Accounting software is free forever
- Able to manage multiple businesses under a single account
- Supports unlimited users and transactions
- Can handle multi-currency transactions
Cons
- No time tracking feature available
- Inventory tracking is not available
- Unable to track by class
Features
- Unlimited invoices and estimates: Create and customize unlimited invoices for free and send them on a recurring basis.
- Expense tracking: Wave lets you capture expense receipts for efficient expense tracking.
- Bill management: Enter a new bill and record an expense without paying and track outstanding bills until they are paid.
Read our Xero vs Wave comparison for a more in-depth discussion of the key differences between the two software.
QuickBooks Self-Employed: Best Alternative for Freelancers Who Need Simple Expense Tracking
Pros
- Client portal to track and send invoices
- Automatically track expenses
- Easy to set up and use
- Access to the mobile app with GPS mileage tracker
- Estimate and pay quarterly taxes
Pros
- Invoice items cannot be saved and must be retyped for each invoice
- Doesn’t track assets and liabilities
- Difficult to upgrade to other versions of QuickBooks Online
- No integrated payroll
- Only allows one user, plus an accountant user
Features
- Basic invoicing: While not very advanced, you can create and send basic invoices to your clients in any language or currency.
- Mileage tracking: The mobile app logs your travel automatically and keeps a record of your business miles.
- Expense categorization: Set up user-defined categories to separate personal and business expenses as they flow through from your bank feed.
- Receipt capture: The mobile app captures a photo of your receipt and creates a transaction out of it.
Visit QuickBooks Self-Employed
Quicken: Best Alternative for Individuals With a Few Rental Properties
Pros
- Powerful budgeting capability
- Able to manage both personal finances and rental properties
- Easy to use with a robust feature set
- Bill pay feature available
Cons
- Only available as a download for your computer
- Not a double-entry accounting system
- No way to track and manage payroll
Features
- Tenant management: Track everything related to rentals, such as bank accounts, documents, loans, and income and expenses.
- Contact management: Manage all your contacts, including rental agreements, security deposits, and lease start and move-out dates.
- Document storage: Store all documents related to your rentals in one place.
How We Evaluated Xero Competitors
We evaluated Xero alternatives using a case study we developed to objectively assess the products we recommend. There are 12 categories in this case study:
- Pricing (5%)
- General features (7%)
- Banking (7%)
- A/P (7%)
- A/R (7%)
- Inventory (10%)
- Project accounting (10%)
- Tax (4%)
- Reporting (4%)
- Ease of use (30%)
- Mobile app (5%)
- User reviews (4%)
5%
Pricing
7%
General Features
7%
Banking
7%
A/P
7%
A/R
10%
Inventory
10%
Project Accounting
4%
Tax
4%
Reporting
30%
Ease of Use
5%
Mobile App
4%
User Reviews
5% of Overall Score
In evaluating pricing, we considered the billing cycle (monthly or annual) and number of users.
7% of Overall Score
This section focuses more on first-time setup and software settings. The software must be quick and easy to set up for new users. Even after initial setup, the software must also let users modify information like company name, address, entity type, fiscal year-end, and other company information.
7% of Overall Score
The banking section of this case study focuses on cash management, bank reconciliation, and bank feed connections. The software must have bank integrations to automatically feed bank or card transactions. The bank reconciliation module must also let users reconcile accounts with or without bank feeds for optimal ease of use. Lastly, the software must generate useful reports related to cash.
7% of Overall Score
The A/P section focuses on vendor management, bill management, bill payments, and other payable-related transactions. A/P features include creating vendors and bills, recording purchase orders and converting them to bills, creating service items, and recording full or partial bill payments.
7% of Overall Score
This takes into account customer management, revenue recognition, invoice management, and collections. The software must have A/R features that make it easy for users to collect payments from customers, remind customers of upcoming or overdue invoices, and manage customer obligations through analytic dashboards or reports.
10% of Overall Score
Businesses with inventory items should choose accounting software that can track inventory costs, manage COGS, and monitor inventory units.
10% of Overall Score
Service or project-based businesses should choose accounting software that can track project costs, revenues, and profits. The software must have tools to track time, record billable hours or expenses, send invoices for progress billings, or monitor project progress and performance.
4% of Overall Score
In this section, we’re looking at sales tax features. The software must have features that allow users to set sales tax rates, apply them to invoices, and enable users to pay sales tax liability.
4% of Overall Score
Reports are important for managers, owners, and decision-makers. The software must have enough reports that can be generated with a few clicks. Moreover, we’d also like to see customization options to enable users to generate reports based on what they want to see.
30% of Overall Score
Ease of use gets the highest weight in this case study because we want to give more credit to easy accounting software. For this section, we considered customer service, support network, and a subjective expert opinion score. Users must have easy access to customer service channels in case of problems, questions, or assistance.
Support network refers to a community of software users that can extend professional help to businesses. Having an independent software expert perform the bookkeeping is good for overall ease of use. And lastly, our expert opinion score is our subjective rating based on our experience in trying the software.
5% of Overall Score
The software must also have a mobile app to enable users to perform accounting tasks even when away from their laptops or desktops.
4% of Overall Score
We went to user review websites to read first-hand reviews from actual software users. This user review score helps us give more credit to software products that deliver a consistent service to their customers.
*Percentages of overall score
Frequently Asked Questions (FAQs)
Is Xero popular in the US?
No, QuickBooks is far more well-known and popular than Xero in the US. Xero is more popular than QuickBooks in New Zealand, Australia, and the United Kingdom.
What is the main advantage of Xero?
Xero includes unlimited users in all of its plans. If you need to add many people to the software but don’t want to pay per user, Xero is the most flexible option.
Bottom Line
In our Xero review, we highlighted its powerful features like inventory and project accounting. However, there are many other areas of accounting and business where Xero isn’t the best option. For instance, if customer service is important to you, choose FreshBooks. If you want a mobile app that’s better than Xero, pick Zoho Books.
If you have trouble finding a Xero Advisor, it might be time to switch to QuickBooks Online. If you want a free alternative, there’s Wave. Overall, the best alternative to Xero depends on your budget, the intricacies of your industry, and the specific features you need.
