Xero is better suited for a wide variety of small businesses, especially those looking to grow their operations. Here's a breakdown of FreshBooks versus Xero, including how they compare on important accounting software features.
Maximum number of users. Maximum number of financial accounts. Recommended limit of accounts to optimize performance. Sharing with accountants. You can invite up to 10 accountants per business at no additional cost with the Plus and Premium plans. The accountant user role includes access to your dashboard, reports and accounting, as well as limited access to invoices, payments and expenses.
The Lite plan does not offer accountant access. With all plans, you can invite your accountant to join Xero as a new user via email, at no additional cost.
You can choose their user role to determine their level of access to your account. You can upgrade your plan as your business grows. The lack of bank reconciliation in the Lite plan, as well as restrictions on the number of clients and team members, can make scaling with FreshBooks more expensive, however.
The three Xero plans allow you to grow your business with your accounting software. Although the Early plan restricts your quotes, invoices and bills, the other plans do not impose these limits. Ease of use. Excellent with an 8. Both FreshBooks and Xero have straightforward, user-friendly dashboards that give you an overview of your financial data and allow you to navigate your account.
You may find that you prefer one type of dashboard over the other; however, it should be relatively simple to get started with either of these solutions, even without prior accounting knowledge.
Plus, both Xero and FreshBooks provide online resources that can walk you through setting up your account and understanding your dashboard. FreshBooks dashboard. With Xero, all plans include bank reconciliation capabilities. Xero gives you the ability to automatically match and categorize transactions, reconcile transactions using the Xero app and receive alerts about unreconciled transactions in your dashboard.
And with the Growing and Established plans, you can use the bulk reconciliation tool to group several transactions at once. Comparatively, FreshBooks doesn't offer bank reconciliation with its least expensive option, FreshBooks Lite. This plan also doesn't include double-entry accounting reports e. Although FreshBooks offers these features once you upgrade to the Plus plan, Xero provides reconciliation capabilities for all its customers. Both Xero and FreshBooks offer a robust library of online resources that you can use to learn more about the software and search for answers to questions you may have.
If you want to work directly with a customer service representative, FreshBooks and Xero are a little different, but each provide competitive options. FreshBooks offers customer support via email and phone, with extended hours during the week. You can contact support by raising a case similar to filing an IT ticket on the Xero website and work with a representative to resolve your issue.
You might prefer one of these customer service options over the other. FreshBooks does give you this option, but you have to call within a certain time frame. If you want to add multiple users to your accounting software, Xero stands out compared with FreshBooks. Xero offers unlimited users with all three of its plan options.
You can add new users via email and assign them one of seven different user roles to designate access to your account. If you want to further customize a user profile, you can also give users additional permissions to certain functions within Xero. With FreshBooks, you can add multiple users to your account only if you purchase the team members add-on, regardless of your plan. This is all included in your subscription.
Depending on your line of work, you may be billing your clients by the hour. As such, your clients will want to have a detailed account of exactly how you are spending your time.
Track all of your time within FreshBooks, then convert that time to an invoice with a simple click of the button. Or you could simply use it as your personal productivity tracker. This is one of my favorite features of FreshBooks. With a couple of clicks, FreshBooks will generate powerful reports that give you deep insight into your business.
Your data is a gold mine. FreshBooks is the tool that will help you do that. Our modern world is drowning in apps. The best ones are the apps that are built to communicate and collaborate with others. Thankfully, FreshBooks knows this, and has built their platform to play well with others. With the launch of the completely new FreshBooks came the release of an all-new mobile app as well.
The mobile app has been vastly improved. Nearly anything you can do on the desktop version can also be done in the mobile app. Create and send invoices, record payments, track and import expenses, manage projects and track your time. The app is available for both iOS and Android.
No word yet on a Windows version but, honestly, who cares? Freshbooks used to have a free version that would only allow you to bill about 5 clients, but they seem to have gotten rid of it with the launch of the new FreshBooks. Now, they offer a full day free trial of the Plus version.
Honestly, I never used the free version. I went straight to the paid model. FreshBooks has three pricing plans to choose from. The difference in plans simply comes down to how many clients you have:.
This pricing is on par with the rest of the industry. Ah yes, communication. Something we all seemed to do so much better before we had all these… communication tools. And FreshBooks makes some pretty bold claims with regards to their phone support. They say they will always answer the phone within 4 rings.
FreshBooks lets you set up auto-categorization of expenses, assign recurring expenses, manage multicurrency expenses, import expenses from your banks automatically, and more. In addition, its mobile app allows you to snap a photo of receipts and store them in the cloud.
Track the time spent on a specific project with daily breakdowns of your working hours. You may add detailed time entry notes, bill for tracked hours automatically, and track time on the go with its mobile app.
You may also track time directly from your favorite project management tools like Trello, Teamwork, Asan, and Basecamp. You may preview estimates before sending, view and respond to client feedback, send estimates in your desired currency, and more. Manage your projects and deliverables better with the ability to assign a rate or hours to a particular client, assign due dates, invite team members to a project, and see a project status quickly.
You may also control user access and manage projects wherever you are with its mobile app. FreshBooks provides seven reports that cover the basic accounting aspects of your business.
These reports include sales tax summaries, profit and loss, invoice details, aging accounts, time entry details, expense details, and payments collected. A balance sheet report is also available in the Premium and Plus plans. FreshBooks has an aesthetically pleasing and intuitive interface that is easy to use and navigate. Creating an account only takes a few minutes. From the dashboard, you can access all the important features and financial reports you need instantly. In terms of customer service, FreshBooks encourages users to contact them by phone, a rarity among companies.
However, users can also talk to a representative via email. A support page is available to provide users with helpful resources on how to get the most out of your software. While perhaps not the best for any particular feature or niche, there are other popular accounting software worthy of consideration.
FreshBooks may lack some important features like managing your inventory or tracking income by class, which are present in slightly more expensive software like Xero and QuickBooks Online, but its powerful invoicing features, affordability, and ease of use make it worthy of consideration for your business. Sign up for a free trial with no credit card required to see if FreshBooks is the right software for you.
Find Timothy On LinkedIn. Tim Yoder is a subject matter expert at Fit Small Business focusing on small business bookkeeping, accounting, and tax content. He received his Ph. He most recently spent two years as the accountant at a commercial roofing company utilizing QuickBooks Desktop to compile financials, job cost, and run payroll. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.
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