FreshBooks vs. Xero: How They Compare in 2022

This is the key question that most people are asking themselves when it comes to deciding which accounting software platform to use. With both FreshBooks and Xero having such a large market share, there’s no shortage of opinions about who has the better features for your business. Let’s take a closer look at how these two platforms compare in 2022 so you can make an informed decision!

The “freshbooks vs xero reddit” is a comparison of the two accounting software companies, FreshBooks and Xero. The article discusses how they compare in 2022.

FreshBooks and Xero are both cloud-based accounting applications that use the software-as-a-service (SaaS) concept to function. FreshBooks is a piece of software that combines accounting with project management, making it perfect for small enterprises and freelancers. Xero, on the other hand, has additional accounting tools, making it a good solution for developing firms, particularly product-based organizations.

When Should You Use FreshBooks?

FreshBooks’ strongest features are its time management, invoicing, and accounting capabilities, which make it easy to monitor billable hours, charge customers using the invoice generator, and follow invoices until they’re paid. FreshBooks won a position in our list of the best small company accounting software because to its outstanding invoicing tools. FreshBooks’ capabilities are an excellent set of tools for most service-based companies, particularly those who bill by the hour.

FreshBooks has a user interface that is simple to use, making it a good choice for folks with little or no accounting knowledge.

FreshBooks is a better option for you if you want to keep track of your finances.

• Customer Service at FreshBooks is excellent since it is simpler for consumers to contact the support staff for help than Xero. For a fast answer to frequent questions, you may contact FreshBooks, have them call you, utilize a chatbot, or go to their self-help section. As a result, if you’re prepared to give up certain accounting capabilities, we prefer FreshBooks for superior customer service.
• FreshBooks has a mobile app, which is one of its main advantages over Xero. You may use FreshBooks to monitor miles, make invoices, and connect directly with customers. These capabilities aren’t available in the Xero mobile app, therefore we suggest FreshBooks to customers who are always on the go.
• Individuals with minimal accounting expertise: Although FreshBooks is a “accounting” program, it is also built for those without accounting experience, so you won’t have a hard time learning how it works. You may hire an accountant to handle your books if you don’t want to manage them yourself.
• FreshBooks allows users to set up automated recurring billings for their clients. It’s our best recurring billing software overall, and it allows service providers to charge clients without having to do it manually each billing cycle.
• Freelancers who provide personal and professional services: FreshBooks is a suitable accounting solution for freelancers since it includes time tracking capabilities that allow users to simply monitor billable hours and add them to invoices.

Go to FreshBooks.com.

When Should You Use Xero?

Because of its excellent inventory accounting, which FreshBooks lacks, Xero is our best overall alternative to QuickBooks.

Businesses that depend on third-party software services will find it simple to operate with Xero because to its various connectivity possibilities, such as PayPal and Square. Xero’s ability to interact with numerous third-party applications makes it adaptable and straightforward to adopt in current organizations, whether it’s third-party invoicing or project management software. As a result, it’s a viable option for established small and medium-sized companies (SMBs) that need key accounting capabilities as well as a diverse set of integration options to facilitate cooperation and streamline workflow.

Xero Is A Better Option For

• Banking: FreshBooks’ banking component is only functional if your bank account is linked to the system. You may opt to connect your bank accounts and cards to Xero, or you can manually account for cash transactions. Despite the difficulty of manual cash accounting, some customers are hesitant to provide their software supplier access to their bank account.
• Xero’s inventory management system allows you to generate inventory items, monitor POs, examine inventory expenses, account for cost of goods sold (COGS), and check inventory levels. FreshBooks doesn’t have this functionality, therefore if you’re selling inventory, we prefer Xero.
• Fixed asset management: Xero includes a fixed asset manager that tracks your fixed assets, calculates depreciation, and tracks fixed asset disposals. If your company has a lot of fixed assets, we suggest Xero.
• Companies with a huge accounting staff: Unlike FreshBooks and other accounting software, Xero can handle an infinite number of users. As a result, we suggest Xero to companies with accounting staffs of more than ten people.

Go to Xero’s website.

When Should You Use Alternate Software?

FreshBooks and Xero both provide features that are tailored to certain purposes. FreshBooks offers superior customer service, whereas Xero excels in inventory management. In the following cases, however, we suggest using another software:

• Inventory management with more features and better customer service: The inventory tools in Xero are excellent, but the program lacks the client care that we expect from an accounting software provider. Instead, we advocate using software that offers both, and the best option is QuickBooks Online. It offers live chat help and the option of having a person contact you. Aside from that, QuickBooks includes a wealth of self-help resources. For a more in-depth look at QuickBooks Online, check out our review.
• Inventory management with all the bells and whistles, plus a killer mobile app: Our top pick for mobile app functionality is FreshBooks, but it lacks inventory management tools. Zoho Books is our top pick if you want inventory accounting plus a solid mobile app in one package. In our review of mobile app functioning, it received flawless marks. For additional details, see our Zoho Books review and case study.

Case Study of a Fit Small Business

FreshBooks vs Xero are compared in 11 major areas that we look for in an accounting software product. Read our FreshBooks and Xero reviews for more information on our extensive case study analysis.

Unlike Xero, FreshBooks isn’t a full-featured accounting platform. FreshBooks underperformed in certain crucial areas, including as inventories and fixed assets, as a result of this. Xero, on the other hand, is an accounting software provider that falls short in two crucial areas: customer service and mobile app capability. In the sections below, we’ll go further into FreshBooks and Xero.

At a Glance: FreshBooks vs. Xero

FreshBooks vs. Xero: What’s the Difference?

FreshBooks and Xero both have multiple plans with distinct features and inclusions.

Pricing for FreshBooks

FreshBooks offers four distinct pricing options. Each plan comes with one user and has its own set of features, such as the ability to add more team members for $10 per month.

• Lite: $15 per month for a maximum of five billable customers
• Plus, with 50 billable clients, you may earn $25 per month.
• Premium: $50/month with an unlimited number of billable clients
• Choose between a custom pricing option with limitless billable clients and customized features and a standard price option.

FreshBooks provides a 60% discount for the first six months and an extra 10% discount if you choose the yearly billing option and purchase right away. Otherwise, you may test FreshBooks for 30 days for free and then upgrade to a paid account.

Xero Costing

Xero has three price options, each with its own set of features:

• Early on, with five billable clients and 20 bids and bills, it was $12 per month.
• Growing: $34 each month for an infinite number of billable clients, quotes, and bills
• $65 per month for unlimited billable clients, quotes, and invoices

Takeaway: Compared to Xero, FreshBooks gives a lot more savings. In terms of cost, FreshBooks comes out on top since its plans are substantially less expensive than Xero’s.

FreshBooks vs. Xero: Advantages and Disadvantages

Table of FreshBooks Tiered Features

Table of Xero Tiered Features

FreshBooks vs. Xero: Key Differences

Because FreshBooks isn’t a full-featured accounting software program in the first place, it lags behind Xero in terms of general functionality. Although FreshBooks supports double-entry accounting, it lacks key functionality such as modifying and closing entries, liability categorization (current and long-term), importing a chart of accounts and starting balances, and entity type selection.

As a full-featured accounting solution, Xero contains the bulk of general accounting capabilities we’d want to see, including the ones we highlighted above that FreshBooks lacks. However, there are a few small features on Xero that we didn’t observe, and these features are related to note payable amortization. Although it would have no impact on the overall user experience, it would be beneficial if Xero could automatically construct an amortization plan for long-term debts.

Takeaway: In terms of general accounting functionality, we’d give Xero the edge. FreshBooks, on the other hand, has a lot of promise. Its basic approach is a good step to enable freelancers self-manage their finances without going too deeply into the complexity of accounting since it caters mostly to persons without bookkeeping skills.

Banking and Cash Management: FreshBooks vs. Xero

FreshBooks’ financial functions are a little convoluted and limiting, particularly when it comes to bank reconciliation. FreshBooks deducts all manually entered costs from the Petty Cash account, as we discovered. Only by matching transactions in the bank feed can costs be correctly assigned to the relevant checking account. As a result, if you don’t have a bank feed, you won’t be able to choose which accounts to deduct expenditures from, rendering FreshBooks useless if you have many bank accounts and no live feed.

Unlike FreshBooks, Xero’s banking and cash management solution permits but does not need a bank feed connection. You can create several cash accounts, reconcile book and bank statements, and generate checks using Xero.

We’ve seen a few Xero impediments that aren’t necessarily significant, and these setbacks mostly concentrate on practical practicality. We discovered that combining checks and cash into a single deposit entry is difficult. This implies you’d have to keep track of different deposits for cheques and cash. This shouldn’t be an issue as long as you separate checks and cash in your real bank deposits. This way, you’ll be able to track deposits from your books to your bank statement.

Another small flaw with Xero is the inability to put the checking account’s final balance in the bank statement. We’d rather simply input the bank statement balance and reconcile it immediately for speed. Xero, on the other hand, asks customers to provide a bank statement prior to reconciling their accounts.

Takeaway: We suggest Xero because of its cash accounting and banking flexibility. FreshBooks, on the other hand, can only be recommended if you set up a bank feed link to your bank accounts.

FreshBooks vs. Xero: Accounts Payable

FreshBooks A/P management performed well in our tests. Our review of FreshBooks’ accounts payable administration is straightforward and to the point. Vendors can be created, invoices can be entered, regular costs can be set up, and payments can be recorded. These features are ideal for a freelancer or a company owner that manages their own operations.

A/P management, on the other hand, is one of Xero’s strongest features. It has both basic and complex functionality, such as tracking vendor credits and billings for independent contractors. We’re not shocked to find these capabilities on Xero since it’s a full accounting software that covers everything from vendor development to billing management.

When compared to Xero, FreshBooks is lacking in functionality. FreshBooks can get away with omitting features like purchase orders (POs) and vendor credits since they don’t provide inventory management. As a result, we take a situational approach here, considering FreshBooks and Xero’s A/P management to be the finest in their categories.

Takeaway: Because service-based freelancers or self-employed persons don’t need complicated A/P tools like inventory POs, we’ll propose FreshBooks to them. If you need to keep track of inventory POs and vendor billings, we suggest Xero.

Reporting in FreshBooks vs. Xero

FreshBooks and Xero both have excellent reporting tools, albeit FreshBooks’ reports are lacking a few small elements. A comparison of available reports may be seen in the table.

an A comparable Profit and Loss Statement cannot be generated.

FreshBooks and Xero both feature 14 of the 16 reports that we look for in accounting software. However, several of FreshBooks’ reports seem to be missing features. FreshBooks’ balance sheet, for example, only displays the parent accounts and leaves out critical features such as sub-accounts.

FreshBooks also allows you to examine unbilled costs and time, but you can’t make a report for it. Furthermore, entire capability is required from Xero’s reporting tools, such as seeing compact and thorough financial reports. Xero reports are comparable, particularly when it comes to the fundamental financial figures.

Takeaway: For reporting, FreshBooks and Xero are excellent options. In this crucial area, we suggest both of them.

FreshBooks vs. Xero: Which Is Easier to Use?

In terms of simplicity of use, FreshBooks and Xero are not on the same level. FreshBooks is far more easy and clear, which is to be anticipated given that the program is designed for persons with little or no accounting knowledge. To someone who has used accounting software applications for a long time, Xero’s complexity is ordinary. First-time users, on the other hand, may encounter a learning curve.

FreshBooks’ User-Friendliness

Dashboard for FreshBooks

Because YouTube adjust can find anything on the left-side menu, navigating around FreshBooks is simple. A drop-down menu will appear when you click on the menu categories, displaying relevant sub-categories. If you’ve never used FreshBooks before, the dashboard’s setup wizard (seen above) will walk you through the procedure.

FreshBooks isn’t scary to folks who have no accounting background in terms of user experience. The layout is simple and effective. FreshBooks’ navigational flow is simple to grasp, and it makes accounting accessible to non-accountants.

Xero’s User-Friendly Interface

Dashboard for Xero

For first-timers, Xero might be a little challenging. There are many things to discover in this full-featured accounting software tool. It’s merely a question of remembering where to get certain accounting information depending on the menu categories after you’ve figured out the navigational flow.

The user experience provided by Xero is likewise outstanding. Web pages aren’t crowded, and Xero makes extensive use of negative white space to allow the web page window to adapt while multitasking with two web browsers. It even uses a tabular structure in most of its modules, allowing users to quickly access crucial information without having to scroll around.

Takeaway: FreshBooks is more user-friendly than Xero. Users with prior accounting software knowledge, on the other hand, will find Xero to be simple to use. FreshBooks is the finest program to select if you don’t have inventory and have no accounting knowledge. However, if you’ve worked with accounting software before, you may want to look at Xero.

Integrations in FreshBooks vs. Xero

Xero has more third-party app integrations than FreshBooks. It features its own app store, where customers may link Xero to a variety of third-party programs. FreshBooks, on the other hand, interfaces with a number of popular small-business software, albeit its connection choices aren’t as extensive as Xero’s.

Integration with FreshBooks

FreshBooks integrates with a variety of third-party applications to help you optimize your accounting and project management operations. The following are the categories, as well as some of the applications that fall under them:

• R/A (Fundbox, CollBox)
• Analytical tools (Apipheny and Callexa)
• Services for bookkeeping (Bench and Mazuma)
• Scheduling clients (Acuity and Calendly)
• Tools for establishing connections (Zapier and Syncberry)
• Customer relationship management (CRM) is a term that refers to the management of customer relationships (HubSpot and Capsule)
• Customer service (Freshdesk and Zendesk)
• E-commerce is a kind of electronic commerce (Shopify and WooCommerce)
• Education is really important (Enlighten.me and Teachable)
• Management of events (Eventbrite and Universe)
• Charges (Everlance)
• Storage of files (Dropbox)
• Mail is delivered via ground (Mail Form)
• Inventory control is important (2Ship and Barcloud)
• Job postings (Indeed)
• Following up on leads (123 Form Builder and POWr)
• promoting (One Local and Sign Post)
• Expenses (Stripe and PayPal)
• Paystubs (Gusto and KeyPay)
• Management of a project (Google Workspace and Trello)
• Proposition (Bidsketch)
• Observations (OneLocal)
• Shipping & tracking (2Ship)
• Assistance with taxes (FreshBooks MTD)
• Communication within the team (Zoom and Slack)
• Keeping track of time (Boomr and Teamwork)
• Utility services (Todoist and WordPress)
• Management of a website (Squarespace)

Integration with Xero

The Xero App Marketplace has a variety of third-party applications that work smoothly with Xero’s ecosystem. The following are the categories, as well as some of the applications that fall under them:

• Tools for accountants (Syft and G-Accon)
• Expenses and bills (Dext Prepare and Xero Expenses)
• CRM (Customer Relationship Management) is (HubSpot and Mailchimp)
• Conversion Rates (MMC Convert)
• Integration that is unique to you (3Bit Solutions)
• Tracking of debtors (Chaser and Satago)
• Documentation (Hubdoc and Google Workspace)
• E-commerce is a kind of electronic commerce (Quaderno and Rocketspark)
• Services in the financial sector (InvoiceInterchange)
• Take a look at your inventory (SaaSOptics and DEAR Inventory)
• Invoicing and employment (Xero Projects and Workflow Max)
• Expenses (PayPal and Chargebee)
• Payroll & human resources (HR) (Carbonate and HReasily)
• At the point of sale (Bold Commerce and Cin7)
• Manager of the practice (Spotlight Reporting)
• Making a report (G-Accon for Xero)
• Keeping track of time (Fergus and Deputy)
• Apps for Xero HQ (Boma and SuiteFiles)

Takeaway: Xero has more app integrations than FreshBooks. This isn’t to say that FreshBooks isn’t better than Xero. Although Xero offers more app options, FreshBooks’ offered applications are still sufficient to provide extra features and functionalities.

Xero vs. FreshBooks: Mobile App

FreshBooks and Xero both provide applications for your phone, tablet, or mobile device that you can download from the App Store and Google Play. To use the app, you must have access to the internet. The software allows users to add, update, and delete data.

Because of its invoicing on-the-go capability, the FreshBooks app is a simple alternative for speeding up customer collections. FreshBooks also allows you to collect receipts for simple organization and documentation. The software also includes a timer for billable hours and a mileage tracker with GPS to keep track of your car expenditures.

Invoicing, bank reconciliation, cash flows, profit and loss are all included in the Xero app, as are the fundamental functions included in the cloud version. The app’s contact management and invoicing integration is a handy tool. You may also add contacts to the app, and Xero will immediately provide you with important information about the individual, such as the average days to pay and billing activity.

Takeaway: Both FreshBooks and Xero provide mobile applications that let you manage your accounts from anywhere at any time. FreshBooks, on the other hand, has a more robust mobile app than Xero. If you conduct the majority of your accounting work on your smartphone or tablet, we suggest FreshBooks.

Assisted Bookkeeping with FreshBooks vs. Xero

Assisted bookkeeping services are available via FreshBooks and Xero to aid small companies in keeping their records organized. These accounting services aren’t included in the membership price, and you’ll have to pay extra for them.

FreshBooks Bookkeeping Help

FreshBooks does not provide direct accounting assistance. Instead, it has teamed up with Bench, an online accounting service that assists in the search for a bookkeeper. Monthly price for Bench begins at $299 per month.

Assisted Bookkeeping with Xero

For bookkeepers and certified public accountants, Xero provides certification programs (CPAs). To acquire accounting help, you may engage independent Xero Advisors or connect with Bookkeeper360. The monthly cost of Bookkeeper360 begins at $125 per hour.

Customer Service: FreshBooks vs. Xero

FreshBooks and Xero both include a help center, customer service features, and instructional resources to assist users become acquainted with the program and use it.

Customer Service at FreshBooks

FreshBooks is well-known for its outstanding customer service. You may reach out to the company’s customer care hotlines, request a call, or send an email. There’s also self-help material for FreshBooks features and how-tos, as well as frequently asked questions (FAQs).

Customer Service at Xero

The customer assistance provided by Xero is minimal. You can only communicate with a chatbot, which will walk you through some typical customer issues or refer you to Xero’s support page’s self-help pages. Xero can only be contacted by email.

Takeaway: FreshBooks offers superior customer service over Xero. Despite the fact that Xero provides a wealth of self-help materials and tutorials, we prefer the convenience of speaking with a live person rather than interacting with a chatbot.

Conclusion

FreshBooks and Xero both have their own set of advantages and disadvantages. They both contain capabilities that might assist you and your company in correctly managing accounting activities. Your accounting demands and budget will determine which software is ideal for you.

For freelancers and service providers, FreshBooks is the ideal software. Its features include project management and bookkeeping, as well as tools to enable professionals run their businesses on their own. It also provides a more flexible price structure than Xero. It offers a unique plan to fit your demands if you want to grow your company.

In this area, Xero is a more well-known brand, and it’s the greatest option if you need specialised accounting software for your business. It has additional functionality than FreshBooks, such as financial reporting and analysis. If your specialized accounting requirements, such as inventory monitoring, aren’t met by FreshBooks, go with Xero.

The “xero pricing” is a question that many people ask. This article will compare the two accounting software companies and how they compare in 2022.

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