You can hire independent Xero Advisors or integrate with Bookkeeper360 to get bookkeeping assistance. Another minor drawback with Xero would be the inability to enter the ending balance of the checking account in the bank statement. For expediency, we’d prefer just to enter the bank statement balance and reconcile directly. Instead, Xero how to compute direct materials variances requires users to upload a bank statement before reconciliation. Even though FreshBooks doesn’t yet offer similar AI-driven tools, both platforms can connect to Zapier AI. This means you can build customized AI workflows to automate tasks, whether you’re team Xero or team FreshBooks.

And we do more than just invoicing and payments – we have award-winning support, are twice as easy to use, and cost half the price. FreshBooks didn’t fail miserably in A/P, but it does lack in some areas where Xero excels. For instance, it doesn’t have purchase orders (POs) and vendor credits, but these are forgivable since FreshBooks excludes inventory management as a feature. FreshBooks is best equipped to serve small business owners without much accounting experience.

1. Even after initial setup, the software must also let users modify information like company name, address, entity type, fiscal year-end, and other company information.
2. Xero may be harder to learn than a simpler invoicing platform like Square Invoices or Zoho Invoice.
3. Moreover, we’d also like to see customization options to enable users to generate reports based on what they want to see.

Best Free Accounting Software of 2024

Read our 2024 Xero review to find out if it’s the right solution for your business. FreshBooks is known for its intuitive interface that’s easy to navigate. If you’re looking for a simple solution to organize your business accounting in one system, it won’t take long to get started with the basics and send your first invoice. With the Lite plan, you’re able to send unlimited invoices to up to five billable clients. That number jumps to 50 billable clients with the Plus plan and then an unlimited number for the Premium plan. It gives you an overview of the outstanding revenue and total profit of your company.

​​With FreshBooks Plus, this limit increased to 50 clients, and with Premium, there’s no client limit at all. You can also connect your bank account and credit cards to your FreshBooks account to automatically track your expenses. Plus, use bank reconciliation to ensure your accounts are accurate and up to date. Automatic Recurring Invoices in FreshBooks combined with Recurring Payments makes it simple for clients to pay and for you to accept payments for products or services rendered—hands-free. Recurring Payments works together with Recurring Templates to automatically bill clients every time an invoice is generated and sent. While Xero’s plans start at a cheaper price, QuickBooks offers more features across its plans.

QuickBooks Online

This ensures that businesses are matched with accountants that suit their specific needs, and gives them access to the financial and accounting reports they need. The safety of your private data is our top priority, that’s why it’s protected by 256-bit SSL encryption—the gold standard in internet security. You can even connect your bank accounts for automatic bank reconciliation trusting your data will always be private and secure. FreshBooks is a cloud accounting solution that uses industry-leading secure servers.

When you might choose FreshBooks instead

An internet connection is should you get a small business line of credit 10 questions to ask needed to use the app, and users can add, edit, or remove data through the app. Hence, Xero is the clear winner if you want all the essential A/P tools and features, including purchase order and vendor credit tracking. FreshBooks is more of a niche pick, specifically for businesses that don’t deal with inventory. Meanwhile, Xero’s banking and cash management system allows—but doesn’t require—a bank feed connection. You can set up different cash accounts, reconcile book and bank statements, and print checks. NerdWallet independently reviews accounting software products before determining our top picks.

FreshBooks is more intuitive (especially for small business owners)

It will make tax time vat and reverse vat calculator easier by providing the required reports that your tax preparer needs to accurately file your taxes. Apart from FreshBooks’ user-friendliness for those who aren’t accounting experts, it also appeals to freelancers through its time tracking and client management tools. All plans offer unlimited time tracking and allow you to bill clients for the time you track. Xero offers more than 80 reports, including standard financial reports, and lets you add tracking categories to monitor performance in different areas of your business. You can generate traditional financial reports, but they aren’t available with all plans. 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.