FreshBooks vs Xero: Choosing accounting software 2025

Xero accounting software is a cloud-based system that helps small businesses manage their finances. This means it can be accessed more detailed update from any internet-connected device. The software offers a variety of features, including invoicing, tracking expenses and creating financial reports. Xero also integrates with other business applications, such as payroll and inventory management systems. This makes it a versatile tool for small businesses that need to streamline their operations.

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However, you may be able to use a third-party app, such as Zapier, to connect the two. However, you may be able to use the AI chatbot and robust support center to get answers to your questions. Just search for your issue to see if there’s a support article about it.

Kristy Snyder is a freelance writer and editor with 12 years of experience, currently contributing to the Forbes Advisor Small Business vertical. She uses her experience managing her own successful small business to write articles about software, small business tools, loans, credit cards and online banking. Kristy’s work also appears in Newsweek and Fortune, focusing on personal finance.

Xero is cheaper when comparing the two base plans, but it quickly becomes more expensive in higher tiers. However, both Xero and FreshBooks are cheaper than the more popular QuickBooks software. Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. The vendors that appear on this list were chosen by subject matter experts on the basis of product quality, wide usage and availability, and positive reputation.

By providing feedback on how we can improve, you can earn gift cards and get early access to new features. Run payroll on any device with taxes, compliance & reporting built-in. If you don’t want to handle your books yourself, you can sign up for QuickBooks Live Bookkeeping. This add-on is available for an additional charge and assigns a professional bookkeeper to manage your books. Since Xero no longer has built-in payroll, its tax support is limited only to sales tax.

QuickBooks Online is full-featured accounting for purchases: how to find on an income statement accounting software that is easy to use, even if you’re new to accounting. In addition to the standard accounting features you’d expect, QuickBooks Online also has advanced features, exceptional invoicing automatizations and customizations, and built-in lending. It also has mobile apps that, according to users, outperform other popular accounting software apps. These features are either not as robust with FreshBooks or are only accessible by upgrading to a more expensive plan.

FreshBooks vs. Xero: Which accounting software is best?

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. It does have the option to input your inventory as invoicing items, but this is clunky voodoo accounting face tattoos and not as intuitive as Xero’s inventory process. Choosing the right accounting software can ensure your small business manages its finances well. If you’re searching for the best accounting software, you might be on the fence between FreshBooks and Xero. Both made our list of top QuickBooks alternatives, meaning they’re functional, powerful and easy to use.

1. If you don’t have the time to devote to learning the software, QuickBooks Online may be the better fit.
2. This service costs $20 per month plus 3.5 percent and 30 cents per transaction.
3. Speaking of pricing, QuickBooks Online can get a little expensive and may be out of budget for smaller businesses looking for a more cost-effective accounting solution.
4. The Online plans start at $35 per month while the only current Desktop version, Enterprise, must be paid annually and start at $1,922 per year.
5. This means you can build customized AI workflows to automate tasks, whether you’re team Xero or team FreshBooks.
6. For tracking your expenses, FreshBooks’ base plan comes with mobile receipt scanning and bill line item capture.

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You can even set up recurring invoices each month, late payment reminders and scheduled late fees for overdue invoices. For tracking your expenses, FreshBooks’ base plan comes with mobile receipt scanning and bill line item capture. For more advanced features, such as accounts payable and accountant access, you’ll need to upgrade to a higher plan. Neither Xero nor QuickBooks Online is lacking when it comes to features. Both have basic accounting features, including invoices, estimates, bank reconciliation, expense tracking, and journal entries. With both programs, advanced features like time tracking and inventory management are available on select plans.

It’s particularly well-suited for businesses who prioritize an all-in-one solution. The desktop version is installed on a computer, while the online version is accessed through a web browser. QuickBooks Online includes all the components of the desktop version, plus additional features such as more app integrations, a fully functional mobile app and more attractive pricing. The Online plans start at $35 per month while the only current Desktop version, Enterprise, must be paid annually and start at $1,922 per year. Plans start at $15 per month for up to 20 invoices, five bills, bank account reconciliation, receipt capture and short-term cash flow snapshots. Its $78-per-month plan also includes multiple currencies, project tracking, in-depth analytics and employee expense claims.

This eliminates the need for multiple platforms, reducing time and effort while empowering smarter business decisions. However, the layout and navigation may not be as intuitive for some users, especially those who are new to accounting software. All of your bank and credit card transactions automatically sync to QuickBooks to help you seamlessly track your income and expenses. You can do a lot with QuickBooks Online, but all the options may feel like information overload starting out.