FreshBooks vs Xero: Choosing accounting software 2025

Vrijeme čitanja:4 min, 27 sec

freshbooks vs xero

You can reach support by raising a case (similar to filing an IT ticket) on the Xero website. Intuitive, customizable invoicing capabilities compete with those of more robust accounting solutions. Katherine Haan is a small business owner with nearly two decades of experience helping other business owners increase their incomes.

FreshBooks invoicing capabilities

Includes project tracking tools in most expensive plan; limited transaction tracking tags; lacks industry-specific reports; users with multiple businesses must pay for separate subscriptions. Another option is Wave, which is a free accounting software program that includes invoicing, payroll, double-entry and sales tax tracking. Whatever your needs, there’s sure to be an accounting software program that’s a perfect fit. FreshBooks is one such option that has gained popularity in recent years. It’s designed specifically for small businesses and offers invoicing, time tracking and expense management. Xero’s app includes the basics, like sending invoices and assigning expenses, but its capabilities are a bit limited.

Xero vs. FreshBooks: Key basic plan features

In our opinion, that’s a fairly glaring oversight—expense tracking is an incredibly common accounting feature that almost all of Xero’s key competitors include in their base plans.
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QuickBooks offers receipt and document organization with its mobile app as well as the online version.
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You can add new users via email and assign them one of seven different user roles, including “read only” and “advisor” access. If you want to further customize a user profile, you can give users additional permissions to particular features, like reports, projects and new expenses. Given that it is a more comprehensive accounting software, we see it as a well-rounded solution. Whether you’re a service provider or retailer, it can adapt to your business needs. FreshBooks, in comparison, offers a simpler and more intuitive experience while sacrificing some advanced features.

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. The Xero app has the basic features found in the cloud version, such as invoicing, bank reconciliation, cash flows, profit, and loss. A useful feature is its contact management integration with invoicing.

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. This saves you from repetitive clicks by automatically identifying business names and common expenses. 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.

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freshbooks vs xero

FreshBooks is a freelancer’s dream accounting software, as it comes with unlimited invoicing, estimates and time tracking. 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. Xero accounting software cash flow statement indirect method is a cloud-based system that helps small businesses manage their finances.

Our editorial team independently evaluates products based on thousands of hours of research. Learn more about our full process and see who our partners are here. Eric is an accounting and bookkeeping expert for Fit Small Business.

How do FreshBooks and Xero compare with QuickBooks?

Ya know who always picks up and never transfers you when you call FreshBooks? At 91%, FreshBooks has the best rating for customer support among all competitors. Our simple yet robust interface has accrued expenses a very short learning curve, so you and your team can hit the ground running. Plus, with automations that reduce your workload, you’ll be saving time in no time.

And Xero doesn’t limit your billable clients, but it does limit you to sending just 20 invoices a month with the cheapest plan. Unlike both FreshBooks and QuickBooks Online (and, frankly, nearly every other accounting tool), Xero includes inventory management with each plan. Xero is a more popular name in this industry, and it’s the better choice if you deal with inventory. It has a more comprehensive set of features than FreshBooks, including financial reporting and analysis.

Importantly, FreshBooks allows you to send unlimited invoices to five clients on its entry-level plan, while Xero caps you at 20 monthly invoices. Xero comes with built-in payroll capabilities, allowing users to handle payroll tasks directly without needing to rely on a third-party solution. FreshBooks doesn’t offer built-in payroll current portion of long term debt cpltd features and requires integration with Gusto for payroll services, which may involve additional costs.