Xero vs FreshBooks

When it comes to managing your business finances, two popular cloud accounting software options are Xero and FreshBooks. In this article, we’ll take an in-depth look at the features, pricing, ease of use, customer support, integrations, security, mobile apps, accounting capabilities, invoicing, expense tracking, time tracking, reporting, and user reviews to help you decide which is the better option for your business.

Introduction to Xero and FreshBooks

Let’s start with introductions to each software. Xero is a cloud-based accounting software founded in New Zealand in 2006. It is designed for small to medium-sized businesses and offers a wide range of features, including invoicing, payroll, inventory management, and more. FreshBooks, on the other hand, is a cloud-based accounting software founded in 2003 in Canada. It is targeted towards self-employed individuals and freelancers and offers features like invoicing, time tracking, project management, and more.

One of the key differences between Xero and FreshBooks is their pricing models. Xero offers a tiered pricing system based on the number of employees, with plans starting at $20 per month. FreshBooks, on the other hand, offers a flat monthly fee based on the number of clients, with plans starting at $15 per month. This makes FreshBooks a more affordable option for freelancers and small businesses with a limited number of clients.

Another difference between the two software is their user interface. Xero has a more complex interface with a steeper learning curve, but offers more advanced features for larger businesses. FreshBooks, on the other hand, has a simpler and more user-friendly interface, making it easier for self-employed individuals and small business owners to navigate and use.

Features and Benefits of Xero

Xero offers a range of useful features for small to medium-sized businesses. Its invoicing feature allows you to create and customize invoices, set up automatic payment reminders, and track when invoices are paid. Xero also offers a payroll feature that allows you to manage your employees’ paychecks, taxes, and benefits. Additionally, Xero has a project management feature that helps you track time and expenses for specific projects. Other features include inventory management, purchase orders, financial reports, and more.

One of the key benefits of using Xero is its cloud-based platform, which allows you to access your financial data from anywhere with an internet connection. This means you can easily collaborate with your team and advisors, and stay up-to-date on your business’s financial health in real-time. Xero also offers bank feeds, which automatically import your bank transactions into the software, saving you time and reducing the risk of errors. With Xero’s mobile app, you can even manage your finances on-the-go, making it a convenient and flexible solution for busy business owners.

Features and Benefits of FreshBooks

FreshBooks is designed for self-employed individuals and freelancers, so its features are more geared towards that audience. One of its standout features is invoicing, which allows you to create and customize invoices, set up recurring invoices, and automate payment reminders. FreshBooks also has a time tracking feature that allows you to track your billable hours and even allows clients to see the progress of a project in real-time. Other features include project management, estimates, proposals, and more.

In addition to its core features, FreshBooks also offers integrations with other popular business tools such as PayPal, Stripe, and G Suite. This allows you to streamline your workflow and easily manage your finances and communications all in one place.

Another benefit of using FreshBooks is its user-friendly interface and mobile app. You can access your account and manage your business on-the-go, making it easy to stay organized and productive no matter where you are. Plus, FreshBooks offers excellent customer support, with a dedicated team available to answer any questions or concerns you may have.

Pricing Comparison: Xero vs FreshBooks

When it comes to pricing, Xero offers plans starting at $20 per month for its Starter plan, which includes invoicing, expense tracking, and 5 bills and quotes per month. For $30 per month, Xero’s Standard plan includes payroll for up to 5 employees, quotes and bills, and more. Their Premium plan starts at $40 per month and includes advanced features like multi-currency support. FreshBooks, on the other hand, offers plans starting at $15 per month for its Lite plan, which includes invoicing and expense tracking for up to 5 clients. Their Plus plan is $25 per month and includes features like proposals and estimates, while their Premium plan is $50 per month and includes time tracking and project management.

It’s important to note that both Xero and FreshBooks offer a free trial period for new users to test out their software before committing to a paid plan. Xero’s trial period is 30 days, while FreshBooks offers a 7-day trial. This can be a great way to determine which software is the best fit for your business needs.

Another factor to consider when comparing Xero and FreshBooks is their customer support. Xero offers 24/7 support via phone, email, and live chat, while FreshBooks offers support during business hours via phone and email. Both companies also have extensive knowledge bases and online resources available to their users.

Ease of Use: Xero vs FreshBooks

Both Xero and FreshBooks are relatively easy to use. Xero has a modern interface that is easy to navigate, with a dashboard that displays key financial information, such as cash flow and expenditures. FreshBooks has an intuitive interface that is easy to use, with a dashboard that displays an overview of your business, including outstanding invoices and expenses.

However, Xero offers more advanced features for managing inventory and tracking time, which may require a bit more time to learn. On the other hand, FreshBooks is more focused on invoicing and time tracking, making it a great choice for freelancers and small businesses that don’t need advanced inventory management. Overall, both Xero and FreshBooks offer user-friendly interfaces and are great options for managing your business finances.

Customer Support: Xero vs FreshBooks

When it comes to customer support, both Xero and FreshBooks offer a range of options. Xero offers 24/7 email support, phone support during business hours, and an online help center. FreshBooks offers email and phone support during business hours, an online help center, and live chat support.

However, there are some differences in the quality of customer support provided by Xero and FreshBooks. Xero has been praised for its prompt and helpful responses to customer queries, with many users reporting positive experiences with their support team. On the other hand, some FreshBooks users have reported longer wait times for responses and less helpful support staff.

Integrations with Other Apps: Xero vs FreshBooks

Xero and FreshBooks both offer integrations with a range of other apps to help streamline your business processes. Xero offers integrations with over 800 apps, including CRM, payment gateways, and project management tools. FreshBooks offers integrations with over 100 apps, including popular tools like Stripe, PayPal, and Shopify.

However, it’s important to note that while Xero offers a wider range of integrations, FreshBooks focuses on integrating with apps that are specifically tailored to small business needs. For example, FreshBooks offers integrations with Gusto for payroll management and HubSpot for marketing automation.

Another key difference between the two is that Xero offers an open API, which allows developers to create custom integrations with other apps. FreshBooks, on the other hand, does not offer an open API, but does have a developer program that allows for more limited integrations.

Security Features Comparison: Xero vs FreshBooks

Both Xero and FreshBooks take security seriously and use industry-standard encryption to keep your data safe. Xero offers two-factor authentication, data backups, and a secure login process. FreshBooks also offers two-factor authentication, SSL encryption, and data backups.

Mobile App Comparison: Xero vs FreshBooks

Xero and FreshBooks both have mobile apps that allow you to manage your finances on the go. Xero’s mobile app allows you to create and send invoices, track expenses, and reconcile transactions. FreshBooks’ mobile app allows you to create and send invoices, track time, and manage expenses.

Accounting and Bookkeeping Capabilities: Xero vs FreshBooks

While both Xero and FreshBooks have strong invoicing features, Xero is more robust when it comes to accounting and bookkeeping. Xero offers features like accounts payable and receivable, bank reconciliations, and financial reporting. FreshBooks, on the other hand, is more focused on simplifying the invoicing and billing process for self-employed individuals.

Invoicing and Payment Processing: Xero vs FreshBooks

Both Xero and FreshBooks have strong invoicing and payment processing features. Xero allows you to create and customize invoices, set up automatic payment reminders, and track when invoices are paid. FreshBooks offers similar features, along with the ability to accept online payments through popular payment processors like PayPal and Stripe.

Expense Tracking and Management: Xero vs FreshBooks

Both Xero and FreshBooks offer expense tracking and management features. Xero allows you to track expenses by category, set up automatic expense categorization, and reconcile transactions. FreshBooks offers similar features, along with the ability to scan receipts and add expenses directly from your phone.

Time Tracking and Billing: Xero vs FreshBooks

FreshBooks is more focused on time tracking and billing than Xero. FreshBooks allows you to track billable hours, send invoices based on those hours, and even allows clients to see project progress in real-time. Xero also has a time tracking feature, but it is less robust than FreshBooks and is more geared towards tracking time and expenses for specific projects.

Reporting and Analytics: Xero vs FreshBooks

Xero offers strong reporting and analytics features, with the ability to generate financial reports like profit and loss statements, balance sheets, and cash flow statements. FreshBooks offers basic reporting features, but they are less robust than Xero’s and are more geared towards giving you an overview of your business’s financial health.

User Reviews and Ratings Comparison: Xero vs FreshBooks

Overall, Xero and FreshBooks both have strong user reviews and ratings. On G2, Xero has a rating of 4.3 out of 5, while FreshBooks has a rating of 4.6 out of 5. However, Xero has significantly more reviews than FreshBooks, with over 2,000 reviews compared to FreshBooks’ 400+ reviews.

Final Verdict: Which is Better, Xero or FreshBooks?

When it comes down to it, the answer to this question really depends on your business’s individual needs. If you’re a self-employed individual or freelancer that primarily needs invoicing and time tracking features, FreshBooks might be the better option for you. However, if you’re a small to medium-sized business that needs more robust accounting and bookkeeping features, Xero is likely the better choice. In terms of pricing, Xero is more expensive but offers more features, while FreshBooks is more affordable but is geared towards a more specific audience.

Overall, both Xero and FreshBooks are solid cloud accounting software options that offer a range of features to help manage your business finances. By considering the factors outlined in this article, you can make an informed decision on which software is the best fit for your business.