FreshBooks vs Xero

Both FreshBooks and Xero are cloud-based accounting software that operate under the software-as-a-service (SaaS) model. Freshbooks provides a software environment that blends accounting and project management, making it ideal for self-managed businesses. On the contrary, Xero integrates more accounting features, which makes it a great choice for a growing business.

When to Use FreshBooks

The best features of FreshBooks are its time management, invoicing, and accounting tools, which make it simple for you to track billable hours, bill clients using the invoice creator, and track your invoices until paid. These great invoicing features earned FreshBooks a spot in our Best Small Business Accounting Software. This is a great combination of tools for most service-based businesses, especially if they charge by the hour.

FreshBooks offers an easy-to-understand user interface. For those with little to no accounting experience, FreshBooks is designed to be accessible and easy to understand.

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When to Use Xero

Many users like Xero because of its intuitive and clean user interface. A major advantage of Xero over FreshBooks is Xero’s inventory tracking system. This makes Xero the clear choice for retailers or wholesalers that need to track inventory costs.

With Xero’s numerous integration features like PayPal and Square, businesses that rely on third-party software services will find it easy to work with Xero. Whether it’s a third-party invoicing or project management software, Xero’s capability to integrate with many third-party apps makes it versatile and easy to implement in existing businesses. Hence, Xero is a practical choice for established small to medium-sized businesses (SMBs) that need essential accounting tools coupled with a vast list of integration features for collaboration and a more efficient workflow.

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FreshBooks vs Xero At a Glance

FreshBooks vs Xero: Pricing

FreshBooks and Xero both offer various plans with different features and inclusions.

FreshBooks Pricing

FreshBooks has four different plans. Each plan has its specific inclusions with the option to purchase add-ons, such as additional team members, for an additional monthly fee:

• Lite: $15 per month with five billable clients
• Plus: $25 per month with 50 billable clients
• Premium: $50 per month with unlimited billable clients
• Select: Custom pricing option with unlimited billable clients and specialized features

FreshBooks offers 50% off on all plans for the first three months under a monthly billing option. In addition, if you choose the yearly billing option, which is paid at the point of purchase, you’ll get an additional 10% off.

Xero Pricing

Xero has three pricing plans which include different features. Users can also add features for an additional monthly fee:

• Early: $11 per month with five billable clients
• Growing: $32 per month with unlimited billable clients; best for growing small businesses
• Established: $62 per month with unlimited billable clients; best for established businesses of all sizes looking for accounting software that can automate most of the accounting and reporting functions

Takeaway: FreshBooks is significantly more affordable than Xero and has more flexible pricing options.

FreshBooks vs Xero: Features

FreshBooks Tiered Features Table

Xero Tiered Features Table

Takeaway: Xero focuses more on financial accounting and reporting that can help managers make informed decisions on the company’s internal processes while FreshBooks combines project management and accounting. If you want to streamline your accounting processes, Xero is the best accounting software for you since it caters more to accounting needs like variance analysis of income statements, inventory tracking, sales tax preparation, and many more. However, FreshBooks can still be a good choice if you’re self-managing a business or letting an outsourced accountant prepare the books for you.

FreshBooks vs Xero: Ease of Use

In terms of usage, it’s easy to learn and to get acquainted with the FreshBooks interface. Since its design extends to freelancers, people with little to no accounting background can navigate around the FreshBooks interface easily. On the contrary, Xero requires a lot more learning and exploration time. However, everything in Xero can be learned, and Xero Central provides technical guidance to assist you.

FreshBooks Ease of Use

Users of FreshBooks applaud the software for its user interface. It’s self-explanatory and straightforward at first glance. Here’s a snapshot of FreshBooks’ dashboard:

FreshBooks Dashboard.

The dashboard provides a snapshot of your business performance as it generates revenues and profits automatically. It also provides a revenue streams graph to present the percentage of sales according to its source like in-person sales, online sales, or rental income. If you want advanced reports like profit and loss, sales tax summaries, and accounts aging, you can generate them quickly by scrolling at the bottom of the dashboard.

To input new transactions quickly, you can click Create New at the upper right corner of the dashboard. Then, as seen in the screenshot above, you can add other income easily and fill in the required fields.

Xero Ease of Use

Xero shares the same dashboard concept with FreshBooks. Xero’s presentation is more comprehensive and detailed, making it useful for managers who need real-time financial information. The dashboard focuses more on the business’ vital signs like cash flows, expense tracking, receivables, payables, bank transactions, and many more:

Xero Dashboard.

By checking the individual tabs in the menu bar, you can see financial information in detail like the bank-to-book reconciling items, invoice details, and its other features:

Xero Invoice window.

The image above is its invoice window, wherein you can create an invoice. While the interface looks plain, you can also customize the invoice printout by adding the company logo or foreign currency conversion. It’s easy to fill in the fields, but it’ll take you quite some time to progress through Xero’s learning curve.

Takeaway: The ease of use for FreshBooks is better than Xero because it’ll take time before a new Xero user becomes familiar with the nooks and crannies of the software environment. FreshBooks is direct to the point while Xero is somehow complex and collective.

FreshBooks vs Xero: Integrations

Xero integrates with more third-party apps than FreshBooks. It has its own app marketplace wherein users can connect different third-party apps with Xero. However, FreshBooks also integrates with several apps that are commonly used by small businesses but not as vast as Xero’s integration features.

FreshBooks Integration

All of FreshBooks’ integrations are from third-party apps that can help you streamline your accounting and project management processes further. Here are the categories and some of the apps that belong to them:

• Accounts receivable (A/R): Fundbox and CollBox
• Analytics: Apipheny and Callexa
• Bookkeeping services: Bench and Mazuma
• Client scheduling: Acuity and Calendly
• Connector tools: Zapier and Syncberry
• Customer relationship management (CRM): HubSpot and Capsule
• Customer support: Freshdesk and Zendesk
• Ecommerce: Shopify and WooCommerce
• Education: Enlighten.Me and Teachable
• Event management: Eventbrite and Universe
• Expenses: Everlance
• File storage: Dropbox
• Ground mail: Mailform
• Inventory management: 2Ship and BarCloud
• Job board: Indeed
• Lead tracking: 123 Form Builder and POWR
• Marketing: OneLocal and Signpost
• Payments: Stripe and PayPal
• Payroll: Gusto and KeyPay
• Project Management: G Suite and Trello
• Proposal: Bidsketch
• Reviews: OneLocal
• Shipping & Tracking: 2Ship
• Tax help: Freshbooks MTD
• Team communications: Zoom and Slack
• Time tracking: Boomr and Teamwork
• Utilities: Todoist and WordPress
• Website management: Squarespace

Xero Integration

Xero’s App Marketplace showcases various third-party apps that integrate seamlessly with its environment. Here are the categories and some of the apps that belong to them.

• Accountant tools: Syft and G-Accon
• Bills & expenses: Dext Prepare and Xero Expenses
• CRM: HubSpot and Mailchimp
• Conversions: MMC Convert
• Custom integration: 3Bit Solutions
• Debtor tracking: Chaser and Satago
• Documents: Hubdoc and G Suite
• Ecommerce: Quaderno and Rocketspark
• Financial services: InvoiceInterchange
• Inventory: SaaSOptics and DEAR Inventory
• Invoicing and jobs: Xero Projects and WorkflowMax
• Payments: PayPal and Chargebee
• Payroll HR: Carbonate and HReasily
• Point of sale (POS): Bold Commerce and Cin7
• Practice manager: Spotlight Reporting
• Reporting: G-Accon for Xero
• Time tracking: Fergus and Deputy
• Xero HQ apps: Boma and SuiteFiles

Takeaway: Xero is integrated with more apps than FreshBooks. However, it doesn’t mean that FreshBooks is inferior to Xero. Although Xero has more app choices, the available apps to integrate with FreshBooks are still enough to give additional capabilities and functions.

FreshBooks vs Xero: Mobile App

Both FreshBooks and Xero have downloadable apps in App Store and Google Play that can be used on your phone, tablet, or mobile device. Internet connection is needed to use the app. Users can add, edit, or remove data through the app.

The FreshBooks app offers a convenient solution because of its invoicing on-the-go feature, which speeds up collections from clients. Moreover, FreshBooks lets you capture your receipts for easy organizing and documenting. The app also has time tracking for billable hours and a mileage tracker via GPS to track your automobile expenses.

The Xero app also has the basic features found in the cloud version like invoicing, bank reconciliation, cash flows, and profit and loss (P&L). A useful feature in the app is its contact management integration with invoicing. The app lets you add contacts, and Xero gives you useful information about the person automatically like the average days to pay and billing activity.

Takeaway: FreshBooks and Xero both have mobile apps that can allow you to manage your accounts wherever and whenever.

FreshBooks vs Xero: Customer Service

FreshBooks and Xero both have customer support features, a help center, and learning materials to acquaint and guide users in navigating the software.

FreshBooks Customer Service

The customer hotlines are open from 8 a.m. to 8 p.m. Eastern time. In addition, there are toll-free numbers in France, Australia, North America, United Kingdom, and Ireland. Finally, if you want quick help, FreshBooks has an online help center that contains informative articles and a frequently asked questions (FAQs) section.

Xero Customer Service

Xero has a dedicated Xero Central to attend to your needs. If you want to speak with an agent, any Xero user can contact its online support 24/7, included in all subscription plans. For quick solutions, Xero Central has in-store support articles, learning courses, and materials to help you use Xero properly.

Takeaway: Xero has better customer support because users of the software can call 24/7. It also has extensive articles that provide immediate solutions to common problems.

Bottom Line

FreshBooks and Xero have their strengths and uniqueness. They both have features that can help you and your business manage accounting transactions properly. The best software for you depends on your accounting needs and budget.

FreshBooks is the best software for freelancers and service providers. Its features combine project management and accounting to help professionals self-manage their business. It also has a flexible pricing plan which is cheaper than Xero. If you intend to expand your business, it also has a custom plan to match your needs.

Xero is a more popular name in this industry, and it is the best choice if you want to have comprehensive and dedicated accounting software for your company. It has a more comprehensive set of features than FreshBooks, including financial reporting and analysis. Choose Xero if your specific accounting needs are not present in FreshBooks, such as inventory tracking.