Xero vs QuickBooks Online: Features Comparison, Pros, Cons

Compared side by side, Xero is clearly the winner when it comes to features. Accounting and invoicing software performs a key role in tracking your business’s finances. It helps you keep an accurate record of your books, as well as get paid via invoices. Two 1099 vs w2 popular small business accounting software programs are FreshBooks and Xero.

Is FreshBooks or QuickBooks better for a small business?

Audit trails show all changes within the software, who made them and when they were made to help accountants track down errors or unauthorized entries. If you can’t justify the $99-per-month QuickBooks Online Plus plan, you won’t get inventory management, because QuickBooks Online’s lower-tier plans don’t come with it. This could be a real shortcoming for small online retail businesses, for instance, that need to keep track of their products and the materials used to make them. All of Xero’s plans come with inventory management so business owners can track what’s in stock and which products are selling. 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. Xero also offers two stand-alone apps — Xero Expenses and Xero Projects — for users on its Established plan.

Alternative Accounting Software Options

Xero’ business model is to get people ‘hooked’ and slowly up the price. Sometimes even charging for things that were already part of the product and calling it an add on feature. With current promotional pricing, FreshBooks starts at $7.60 per month while QuickBooks starts at $17.50 per month. Xero doesn’t offer the opportunity to call a representative directly for assistance. You can reach support by raising a case (similar to filing an IT ticket) on the Xero website.

Best Accounting and Bookkeeping Apps for Small Businesses

1. All Xero plans come with accountant access, but FreshBooks’ least expensive option does not.
2. Both Xero and QuickBooks Online include invoicing, but there are a few reasons why QBO has the edge.
3. Additionally, Xero’s customizable dashboard and global search function make the software easy to navigate.
4. It’s full of user guides, help articles and other learning tools so you can hopefully find answers to your questions faster.

Forbes Advisor compared Xero vs. QuickBooks when it comes to the key features, pricing, customer service and reviews to help you decide which is right for your business. With the ability to send unlimited, customizable invoices, payment reminders and proposals to clients, FreshBooks is the optimal solution for freelancers or solo entrepreneurs. It also lets you track time and billable hours so clients can see exactly what you’re charging for. We prefer Xero if you’re a larger business looking for more potent features, such as bank account reconciliation and Gusto payroll software. Xero also has robust file storage that lets you manage and share documents, bills, contracts and receipts on the cloud.

Invoicing

With its most basic plan options, it comes equipped with bank reconciliation, unlimited user access (for entire accounting teams to access company financials), and comprehensive accounts payable management. These features are either not as robust with FreshBooks or are only accessible by upgrading to a more expensive plan. FreshBooks cloud based accounting software is built for non-accountants running small and medium sized businesses – making it easy to create invoices and get paid. And you can always give your accountant immediate access to FreshBooks to get support during tax season and key financial decisions.

Speaking of which, Freshbooks’ invoicing feature is among the best in the business, letting you customise everything from your logo to the color scheme and font used. Not only that, but the same is true of estimates for projects – these can be created in the same way and then converted into invoices once the payment is due. Xero – while a little pricey compared to other options, Xero is a fantastic all-in-one accounting app for small-to-mid-sized businesses. Hell, even if you’re 36 synonyms of auditing self-employed and don’t have a team, you still need to log your clients’ payments, prepare your taxes, and create balance sheet statements. This easy-to-use and feature-rich software is ideal if you have no bookkeeping experience and want top-notch customer support. And if you find that neither company meets your needs, you may be better off with one of our top accounting software picks for small businesses.

You’ll need the Plus plan to access a general ledger, trial balance or chart of accounts and the Premium plan to create any accounts payable reports. Xero is an accounting powerhouse that can handle anything from freelancers to big-shot enterprises. With debt to equity d features like invoicing, payroll, and inventory management, it’s got all the bells and whistles. Meanwhile, FreshBooks is perfect for freelancers and small businesses that want simplicity without sacrificing functionality. Xero and QuickBooks Online are both powerful accounting software solutions for small businesses.

When it comes to accounting software, QuickBooks is the clear winner. It offers a wide range of features that can help small businesses keep track of their finances. From tracking income and expenses to creating invoices and paying bills, QuickBooks has everything you need to manage your books. If you want to add multiple users to your accounting software, Xero is likely a better choice than FreshBooks because it accommodates unlimited users in all plans. You can add new users via email and assign them one of seven different user roles, including “read only” and “advisor” access.

If you get paid for regular services then you can even set up recurring invoices to automatically generate and save yourself the trouble. First up, FreshBooks provides a handy dashboard with overview reports of your outstanding revenue, overall profit, and expenses. This lets you quickly see the big picture of your business’ finances without having to dig into individual reports or invoices. One of the more recent additions of QuickBooks Online is a mileage tracking feature. The biggest benefit of cloud-based apps is that you don’t need to install a desktop version of the software. FreshBooks currently offers four paid plans based on a business’s number of clients.