Are you looking for the best accounting software for your business? Xero and FreshBooks are two top choices, but which one gives you more value for your money?
FreshBooks offers an affordable starting price with essential features for freelancers. Xero, on the other hand, provides powerful tools for growing businesses but at a higher cost.
Imagine streamlining your invoicing, expense tracking, and reports without worrying about hidden fees. Xero’s scalability and FreshBooks’ simplicity could be the perfect match for your business goals.
Check out our detailed comparison of Xero vs FreshBooks and choose the best plan that fits your business. Click here to explore the options and find your perfect match!
Introduction to Xero and FreshBooks
Xero: Xero is an accounting software designed for small to medium-sized businesses. It offers various features such as invoicing, bank reconciliation, and inventory management, along with more advanced tools for larger enterprises.
Feature Comparison and Final Recommendation
Here’s a simplified table comparing the pricing:
Xero Features in Plans
| Feature | Starter Plan | Standard Plan | Premium Plan |
|---|---|---|---|
| Users | 1 user | 5 users | Unlimited users |
| Invoices | Send invoices & quotes | Send quotes & 20 invoices | Send invoices & quotes |
| Bills | Enter bills | Enter 5 bills | Enter 5 bills |
| Bank Reconciliation | Yes | Yes | Yes |
| Capture Bills with Hubdoc | Yes | Yes | Yes |
| Advanced Financial Tools | No | Yes | Yes |
FreshBooks Features in Plans
| Feature | Lite Plan | Plus Plan | Premium Plan |
|---|---|---|---|
| Users | 1-5 clients | 50 clients | Unlimited clients |
| Invoices | 5 invoices | 50 invoices | Unlimited invoices |
| Time Tracking | Yes | Yes | Yes |
| Expense Tracking | Yes | Yes | Yes |
| Project Tracking | No | Yes | Yes |
| Client Retainers | No | Yes | Yes |
Pricing Overview
Xero Pricing
- Starter Plan: $29/month
- Features: Send invoices and quotes, enter bills, reconcile bank transactions, capture bills with Hubdoc, and more.
- Standard Plan: $46/month
- Features: Send quotes and 20 invoices, enter 5 bills, and additional advanced tools.
- Premium Plan: $69/month
- Features: Includes all Standard Plan features plus more advanced capabilities for larger businesses.
FreshBooks Pricing
- Lite Plan: $10.50/month (50% off for 6 months, was $21.00)
- Features: Send invoices to 5 clients, track expenses, create and send estimates, and generate tax-time reports.
- Plus Plan: $19.00/month (50% off for 6 months, was $38.00)
- Features: Send invoices to 50 clients, track expenses, create estimates, proposals, and client retainers.
- Premium Plan: $32.50/month (50% off for 6 months, was $65.00)
- Features: Send invoices to unlimited clients, track expenses in real time, generate tax-time reports, and more advanced tools for project profitability and customization.
Which Is Best According to Cost:
- For lower pricing and simpler needs, FreshBooks Lite is the best value, especially for freelancers or very small businesses.
- For growth and scalability, Xero’s Growing Plan offers a comprehensive set of tools at a higher price but adds more value for growing businesses.
Feature Comparison in Pricing Plan
FreshBooks:
- The Lite Plan offers the basics: invoicing, tracking expenses for 5 clients, and generating tax-time reports. Ideal for freelancers or very small businesses.
- The Plus Plan allows more flexibility (50 clients) and adds project tracking and time tracking, making it ideal for growing small businesses.
- The Premium Plan is best for businesses that require unlimited client support, project tracking, and customizations at a higher price point.
Xero:
- The Early Plan is quite basic, suitable for startups with one user and limited invoicing capacity.
- The Growing Plan adds more power (unlimited invoices, multiple users) and is best for growing businesses that need scalability.
- The Established Plan offers a full suite of advanced features (multi-currency, payroll), making it suitable for more established companies with a larger number of users.
Additional Costs and Hidden Fees
- Add-ons: You’ll need to pay extra for additional features like advanced reports, tracking more clients, and adding extra users.
- Transaction Fees: Fees for processing payments through FreshBooks may be additional, depending on your payment gateway.
- Add-ons: Extra costs for payroll, multi-currency transactions, and advanced integrations.
- User Limitations: Although the pricing plans allow multiple users, adding more users or advanced features like payroll could require you to upgrade your plan.
Xero vs. FreshBooks: Cost-Effectiveness
- FreshBooks is cost-effective for small freelancers and startups who only need the basics for invoicing and expense tracking.
It’s less expensive for solo entrepreneurs or small teams but lacks some advanced accounting features.
- Xero offers a more scalable solution for businesses looking to grow.
While the Early Plan is cheaper than FreshBooks, Xero’s Established Plan is more expensive but offers much more advanced features.
Which Is Best for Your Business?
For Small Businesses or Freelancers, FreshBooks Lite or Plus is the ideal choice due to its lower cost and simpler features, making it perfect for those with basic accounting needs.
However, for a Growing or Medium-Sized Business that requires more advanced features like unlimited users, multi-currency support, and better integration options, Xero’s Growing or Established Plan would be worth considering, despite its higher price.
In conclusion, FreshBooks is the most cost-effective option for budget-conscious users seeking simplicity, while Xero offers greater functionality for businesses that need scalability and advanced tools as they expand.
❓FAQs
Which is cheaper, Xero or FreshBooks?
FreshBooks offers lower starting prices, especially for freelancers and small businesses.
Does Xero offer a free trial?
Yes, Xero offers a 30-day free trial for new users to explore its features.
Can FreshBooks handle unlimited clients?
FreshBooks can handle unlimited clients with the Premium plan, which costs $32.50/month.