FreshBooks VS Xero - Jun 2024

Shlomi Lavi / updated: Jun 18, 2024

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Functionality

FreshBooks and Xero both offer comprehensive accounting and invoicing solutions designed for small to medium-sized businesses. Both platforms provide essential features like invoicing, expense tracking, bank reconciliation, and time tracking, ensuring users can manage their finances effectively.

Xero stands out with its strong focus on cloud-based accounting, offering advanced features like multi-currency support, project tracking, and payroll management. FreshBooks, on the other hand, is particularly strong in invoicing and time tracking, making it an ideal choice for freelancers and service-based businesses.

FreshBooks excels in providing an intuitive and user-friendly interface, especially for those who may not have extensive accounting knowledge. It focuses on simplifying the accounting process, which is highly appreciated by its users. Xero, while also user-friendly, offers a broader range of features that may require a steeper learning curve.

Both FreshBooks and Xero offer mobile applications to manage finances on the go. However, FreshBooks mobile app is particularly praised for its ease of use and robust invoicing features. Xeros mobile app is also highly functional, providing access to most of its accounting features.

Project management is an area where Xero shines with detailed project tracking and billing functionalities. FreshBooks also offers project management features, but they are more focused on time tracking and billing rather than comprehensive project oversight.

Pros and Cons

FreshBooks is highly regarded for its user-friendly interface and strong invoicing capabilities. It simplifies the accounting process, making it ideal for freelancers and small business owners who need to manage their finances without getting bogged down in complex accounting tasks.

However, FreshBooks has some limitations, including fewer integrations compared to Xero and less robust inventory management capabilities. Additionally, while it is excellent for service-based businesses, it may not provide all the features needed by larger businesses with more complex needs.

Xero excels with its robust cloud-based platform, multi-currency support, and extensive integrations with over 800 third-party apps. It also offers advanced features like payroll management and project tracking, making it suitable for a wider range of businesses.

On the downside, Xero can be more expensive than FreshBooks, with monthly subscription fees. Additionally, its broader range of features might be overwhelming for users looking for a simpler solution, and some users report a steeper learning curve.

Pricing

FreshBooks offers four pricing plans: Lite ($15/month), Plus ($25/month), Premium ($50/month), and Select (custom pricing). For one user, the cost starts at $15 per month. For 10 users, it ranges from $250 to $500 per month depending on the plan. For 100 users, the cost would require custom pricing under the Select plan.

Xero offers three main pricing plans: Starter ($25/month), Standard ($40/month), and Premium ($54/month). For one user, the cost starts at $25 per month. For 10 users, it ranges from $400 to $540 per month depending on the plan. For 100 users, the cost would be around $5,400 per month for the Premium plan.

User Interface

FreshBooks features a highly intuitive and user-friendly interface that is designed to be simple and easy to navigate. This makes it particularly attractive to freelancers and small business owners who may not have extensive accounting knowledge.

Xeros interface is clean and professional, designed to provide a seamless experience across desktop and mobile devices. While it is also user-friendly, its broader range of features can make it appear more complex compared to FreshBooks.

Integration

FreshBooks integrates with popular tools like PayPal, Stripe, G Suite, and Slack, making it easy to connect with the tools many small businesses already use. Its integration options, while solid, are fewer than Xeros.

Xero offers extensive integration capabilities, connecting with over 800 third-party applications. Key integrations include Stripe, PayPal, HubSpot, Shopify, and various CRM and project management tools, making it highly adaptable to different business needs.

Scalability

FreshBooks is scalable for small to medium-sized businesses, particularly those in the service industry. It can handle growing transaction volumes and multiple users, though it may not offer the extensive enterprise-level features needed for very large organizations.

Xero is highly scalable, suitable for businesses of all sizes. Its advanced features and extensive integrations support complex business needs, making it a viable option for both small businesses and large enterprises.

Security

FreshBooks employs standard security measures, including data encryption and regular backups, ensuring data protection. While it does not have as many security certifications as Xero, it is considered secure for small business use.

Xero offers robust security features, including two-factor authentication, SSL encryption, and regular data backups. It has received several security certifications, such as ISO/IEC 27001:2013, demonstrating its commitment to data security and privacy.

Reporting and Analytics

FreshBooks provides essential reports such as profit and loss statements, expense reports, and tax summaries, which are particularly useful for small businesses and freelancers. The reporting capabilities are straightforward and cater to basic business needs.

Xero excels in reporting and analytics, offering over 50 customizable reports. Commonly used reports include Profit and Loss, Balance Sheet, and Cash Flow statements. Xeros reporting tools are more advanced, providing deeper insights and analysis for strategic decision-making.

Support and Maintenance

FreshBooks offers customer support through email, phone, and live chat, with a strong focus on assisting users quickly. The support team is known for being responsive, and the platform provides extensive online resources and documentation.

Xero provides comprehensive support options, including 24/7 email support, live chat, and an extensive online help center. Its SLA ensures timely resolution of issues, and the extensive documentation and community forums offer additional assistance.

Training and Implementation

FreshBooks is relatively easy to implement, often taking less than a week for most businesses. It provides video tutorials, webinars, and a help center to assist users in getting started. There is no additional cost for basic training, and most users find the platform intuitive to use.

Xero typically requires 2 to 4 weeks for full implementation, depending on the complexity of the business. It offers a range of training resources, including webinars, online courses, and tutorials. While basic training is included, advanced training sessions may incur additional costs.

Flexibility

FreshBooks supports business growth within its target market, with flexible pricing and scalable features. However, it may not cater to the needs of very large businesses or those requiring advanced international features.

Xero is highly flexible, accommodating businesses of all sizes and needs. Its extensive feature set and integrations support growth and adaptation, with no upper limit on the number of users.

Data Migration

FreshBooks provides tools and assistance for data migration, making it relatively straightforward for users to switch from other accounting systems. The process is generally smooth and well-supported.

Xero offers comprehensive data migration tools and support, ensuring a seamless transition from other systems. The level of assistance provided can vary, but overall, users find the migration process efficient and manageable.

Mobile Access

FreshBooks mobile app is designed for ease of use, offering robust invoicing and time tracking capabilities. The app is well-rated for its simplicity and practicality, making it ideal for freelancers and small business owners.

Xeros mobile app provides a robust user experience, with seamless integration with the desktop platform. It offers a wide range of features, ensuring users can manage their finances efficiently from anywhere with an internet connection.

Cloud-based or On-premise

FreshBooks is entirely cloud-based, providing real-time access and updates from any device with an internet connection. This model ensures seamless collaboration and data synchronization across all users.

Xero is also entirely cloud-based, providing real-time access and updates from any device with an internet connection. This ensures that businesses can operate efficiently and stay updated with the latest financial data.

Vendor Reputation

FreshBooks, founded in 2003, is well-established in the market, particularly among freelancers and small business owners. It has a strong reputation for its user-friendly approach to accounting and invoicing.

Xero, founded in 2006, is well-established in the global market, with over 2 million subscribers. It is renowned for its innovation and comprehensive cloud-based accounting solutions, making it a trusted choice for businesses worldwide.

Industry Certifications

FreshBooks has been recognized with awards such as the Stevie Awards for Sales and Customer Service and the TrustRadius Top Rated Award for Accounting and Budgeting Software, highlighting its excellence in customer support and user satisfaction.

Xero has received numerous industry accolades, including the FinTech Breakthrough Award for Best Small Business Accounting Solution and PCMags Editors Choice Award, reflecting its excellence in accounting software.

User Reviews

FreshBooks generally receives positive reviews for its ease of use, robust invoicing features, and excellent customer support. Users appreciate its focus on simplifying the accounting process. It scores around 85 out of 100 in user sentiment.

Xero is highly praised for its comprehensive features, ease of use, and robust integrations. Users appreciate its scalability and advanced reporting capabilities. It scores around 90 out of 100 in user sentiment.

Technical Requirements

FreshBooks, being entirely cloud-based, requires a stable internet connection and a web browser. It has no specific hardware requirements, making it easy to implement without extensive IT infrastructure.

Xero, also entirely cloud-based, requires a stable internet connection and a web browser. It has no specific hardware requirements, making it easy to implement and maintain without significant IT resources.

Implementation Timeline

FreshBooks typically takes less than a week to implement, thanks to its straightforward setup and user-friendly design. Support and resources are available to assist with the process.

Xero generally requires 2 to 4 weeks for full implementation, depending on the complexity of the business. It offers various support packages to ensure a smooth and efficient transition.

Vendor Stability and Compliance

FreshBooks, with its focus on small businesses and freelancers, is a stable and reliable provider. It complies with various industry standards, ensuring data security and regulatory adherence.

Xero, with its global presence and long history, is a stable and reliable provider. It complies with various international accounting standards and regulations, making it suitable for businesses operating in multiple countries.