Our partners cannot pay us to guarantee favorable reviews of their products or services. One thing we recommend while comparing Xero vs FreshBooks is to learn all about the FreshBooks Accountant Partner Program. It’s a unique part of FreshBooks that you won’t get from other cloud based accounting solutions. You can easily test out expense tracking, team expense claims, and expense importing during your 30-day free trial. So either you have to plan to cancel 2 months in advance or you have to plan to pay an additional month of service after you actually cancel.

If using how to deduct personal appearance expenses multiple currencies is a priority to you, consider other platforms that offer this capability at a lower cost. Zoho, for example, is accounting software with a free invoice platform that allows you to bill in multiple currencies. The Early subscription is tailored for solopreneurs and business owners who are just getting started.

Best Free Accounting Software of 2024

The only project accounting feature lacking in FreshBooks is the ability to assign actual inventory costs to a project, which is expected since FreshBooks doesn’t provide inventory accounting. When it comes to AI, Xero has a few tricks up its sleeve that FreshBooks currently lacks. The bank reconciliation predictions help make those tedious end-of-month tasks a little easier by using past transaction data to suggest matches for your bank statements. contribution margin income statement This saves you from repetitive clicks by automatically identifying business names and common expenses. In addition to its more robust reports, Xero proves itself to be the better fit for established and growing organizations with its bank reconciliation feature.

Can I pay for Xero annually?

The app also lets you add contacts, and Xero gives you useful information about the person automatically, such as the average days to pay and billing activity. NerdWallet’s accounting software ratings favor products that are easy to use, reasonably priced, have a robust feature set and can grow with your business. The best accounting software received top marks when evaluated across 10 categories and more than 30 subcategories. Has robust reporting tools and report customization options, basic inventory tracking in all plans and a capable mobile app; Early plan limits the number of invoices and bills.

1. We recommend it to freelance service providers who only need to track income and expenses for projects.
2. With the ability to send unlimited, customizable invoices, payment reminders and proposals to clients, FreshBooks is the optimal solution for freelancers or solo entrepreneurs.
3. The lowest price tier costs $4.25 per month for your first three months, then $17 per month thereafter, but is limited to five clients.
4. FreshBooks’ unlimited time tracking feature and invoicing capabilities are better-suited for freelancers, independent contractors and other self-employed professionals.
5. She uses her experience managing her own successful small business to write articles about software, small business tools, loans, credit cards and online banking.
6. Stay in touch with clients through the FreshBooks mobile app and get notified when invoices have been viewed or become overdue.

FreshBooks is better geared toward freelancers and very small businesses that need to send a lot of invoices to clients. Though they have different functionalities, both made our list of the best accounting software. Xero, on the other hand, is best for small businesses that want to take the step up from tracking expenses in Excel. It has all the functionality you need to manage transactions, calculate payments and consider the profit potential of international expansion track projects at an affordable entry point. It allows three users for its Essentials plan ($55 per month) and 25 users for its top plan, the Advanced ($200 per month). This can be helpful if your company is growing fast, or you simply want the reassurance that there’s no limit to how many people can be part of the team.

Payments

It’s available online 24/7, which is great for businesses that have unusual operating hours. You’ll just submit a support ticket, where you can attach any files that may make things easier to troubleshoot. If necessary, you can also give a Xero support person access to your account so they can take a closer look. Xero doesn’t have a phone number customers can call, but it can provide a callback if necessary. Comparing FreshBooks and Xero side by side shows that their starting prices aren’t bad—though Xero is the cheaper option for both the introductory and regular offers. If you’re looking to pay bills regularly, it makes more sense to Xero, as you can pay five of them on the base plan.

Both services let you track time for a project, meaning you’ll know exactly how long a certain job takes. However, FreshBooks seems to have more in-depth client features, as it lets you store their contact info, communications and any internal notes you might have about them. Xero may be harder to learn than a simpler invoicing platform like Square Invoices or Zoho Invoice. All three plans come with an optional add-on for payroll with Gusto for $40 per month plus $6 per month per person. Xero’s accounting software is highly rated among small businesses.

However, time tracking and invoicing lean in favor of FreshBooks, which offers unlimited use compared to Xero’s restrictions. Both made our list of the top invoicing software, however, so you really can’t go wrong with either. While both software programs offer all the bells and whistles you need to manage your business’s finances, Xero limits the number of quotes and invoices you can send each month. The maximum is 20, which can be quite limiting to a busy professional. Overall, FreshBooks is easier to use but limits the number of billable clients to five. So it will be up to the business owners to determine which limit will be more detrimental to business needs.

We saw that it’s impossible to combine payments received from customers into a single deposit entry, even if they’re all checks or all cash. The problem this creates is, your Xero check register will show multiple deposits while your bank statement will show the actual deposit amount, which has all the amounts combined. We are driven by the Fit Small Business mission to provide you with the best answers to your small business questions—allowing you to choose the right accounting solution for your needs. Our meticulous evaluation process makes us a trustworthy source for accounting software insights. We don’t just scratch the surface; we immerse ourselves in every platform we review by exploring the features down to the finest nuances. Xero also offers Analytics Plus, available on the Established plan, to analyze your cash flow.